Indentures often contain make-whole premiums payable upon early redemption of the debt, and term B loan agreements often include "soft call" protection in the form of prepayment premiums during the early life of the loan. If the debt issuer becomes subject to a chapter 11 proceeding after the debt issuance, the question then arises as to how this payment obligation is to be treated: Does the make-whole or prepayment premium constitute unmatured interest due as a result of the debt acceleration, which would be disallowed, or is it liquidated damages?
Limited liability is not complete protection for directors and they must carefully consider their actions and, indeed, failures to act in order to avoid “piercing the corporate veil”. Directors may be ordered to contribute to the assets of the company even where they have not acted dishonestly.
Corporate Debt Restructuring through a Company Voluntary Agreement
In the current economic climate most businesses will experience temporary or longer term cash flow pressure resulting in stressful trading and creditor pressure.
The implications of taking an appointment over an insolvent business which is regulated by environmental law can be far reaching. Environmental regulation has become more stringent and the sanctions for breach can leave the IP exposed to liability, including (amongst other things) costs sanctions.
The main environmental regimes referred to in this update are the contaminated land and water pollution regimes.