The English High Court has sanctioned a restructuring plan in respect of EUR 3.2 billion of bonds issued by the German real estate business, Adler Group. The main objective of the plan was to avoid Adler's imminent insolvency by facilitating access to EUR 937.5 million of new money funding and thereby providing a stable platform from which Adler Group can pursue a solvent wind-down by asset sales over time in recovered market conditions. This represents a novel use of the restructuring plan procedure, which has previously been seen exclusively as a corporate 'rescue' tool.
Recently, the Supreme Court of the United Kingdom released its judgment in BTI 2014 LLC v Sequana SA1. This marks the first occasion on which the nature, scope and content of directors' duties to creditors when a company is nearing insolvency (the "Creditor Duty") has been considered by the Supreme Court.
Last week, the Supreme Court of the United Kingdom released its judgment in BTI 2014 LLC v Sequana SA. This marks the first occasion on which the nature, scope and content of directors' duties to creditors when a company is nearing insolvency (the "Creditor Duty") has been considered by the Supreme Court.
On 12 June 2019, after a tense meeting with landlords and creditors, the company voluntary arrangements (CVAs) proposed by the Arcadia Group Ltd (Arcadia) were approved by the requisite majority of creditors, allowing the group to restructure its balance sheet and stave off, at least for the time being, a liquidation or administration proceeding.
Arcadia's decline
Sports Direct International plc's last-minute offer to buy substantially all of the assets of House of Fraser out of administration is the latest example of a pre-packaged administration being used to rescue a failing business and continue it as a going concern.
The House of Fraser pre-pack sale to Sports Direct, the British retail group headed by Mike Ashley, was announced almost immediately after House of Fraser entered into administration, and included a transfer of its UK stores, the brand and all of its stock and employees.