Judicial comments cast doubt on the ability to compromise US law-governed debt effectively based on Chapter 15 recognition alone.

Judicial comments cast doubt on the ability to compromise US law-governed debt effectively based on Chapter 15 recognition alone.

Venezuela’s initiative is unlikely to set the stage for a restructuring of international obligations in the face of US sanctions.

Key Points:

• US sanctions will prohibit US persons from engaging in a restructuring of Venezuela and PdVSA debts that includes the issuance of “new” long term debt.

• Creditors should expect that enforcement action will follow a default. The outcomes of that enforcement action will affect all stakeholders, whether or not they participate.

Restructuring Announcement

Cross-border debtors gain another tool to use against dissident creditors seeking to disrupt foreign restructuring proceedings.

Introduction

Relief for lenders and administrators as UK Supreme Court reverses “super-priority” status of pensions liabilities in insolvency ranking.

On April 1, 2012 Drydocks World LLC (DDW) and its subsidiary Drydocks World — Dubai LLC (DDW Dubai), a Dubai- and Asia-based ship building and repair company that is wholly owned by Dubai World, became the first company to commence a reorganization proceeding in the Special Tribunal¹ (the Tribunal) created by Dubai Decree No. 57 for 2009 (Decree 57) and avail itself of Decree 57’s integrated legal framework.

The Court of Appeal handed down its judgment on 14 October 2011 unanimously upholding the first instance decision that a Financial Support Direction (FSD) issued by the Pensions Regulator to an entity after it has commenced insolvency proceedings will rank as an expense of the administration, therefore affording it super-priority over floating charge holders and other unsecured creditors. This decisions has significant implications for lenders to groups with UK defined benefit pension plans if any of their security is taken as a floating charge.

On December 15, 2010, Judge James Peck of the US Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) approved Lehman Brothers Special Financing Inc.’s (LBSF) motion (the Motion) for approval of a settlement among LBSF, BNY Corporate Trustee Services Limited (BNY), Perpetual Trustee Company Limited (Perpetual) and others relating to certain note issuance and swap transactions with Saphir Finance Public Limited Company (Saphir) under a program known as the Dante Program.

Summary

Since April 2005, the UK Pensions Regulator (the Regulator) has had the power to take action, in the form of financial support directions (FSDs) or contribution notices (CNs), against parties that are "connected or associated" with a company that operates a UK defined benefit pension plan. This will typically include all entities in the same group as the employer.

Introduction