WE CONSIDER BELOW THE SHARE CHARGE ENFORCEMENT OPTIONS FOR PRIVATE CREDIT LENDERS, WHO MAY NOW COME TO PREFER 'APPROPRIATION' AS THE LESS FORMAL, MORE IMMEDIATE 'LOAN-TO-OWN' TOOL TO SOLVE FOR BORROWER JV DISPUTES, BREAK SHAREHOLDER DEADLOCKS, AND AS A PROACTIVE MEANS TO PRESERVE VALUE IN A CREDIT.

GIVEN THE RECENT NEWS REGARDING SILICON VALLEY BANK, RICHARD OMAN LOOKS AT THE IMPACT THAT LENDER INSOLVENCY HAS ON LOAN FACILITIES AND WHAT BORROWERS AND LENDERS NEED TO CONSIDER.

BACKGROUND

KARL CLOWRY, SEÁN MCGUINNESS, AND AZIZ ABDUL LOOK TO THE LESSONS FOR SHAREHOLDERS, CREDITORS AND ADMINISTRATORS FROM THE FIRST CREDITOR LED RESTRUCTURING PLAN.

The Good Box Co Labs Limited (in Administration) case demonstrates once more the viability of the process for the mid-market and continues a trend of RPs being used by a determined creditor / shareholder constituency to rescue an equity investment within an existing corporate group. In short, the mid-market RP is still a highly situational, albeit flexible, tool."

Protecting your business from exposure to supplier and customer insolvency

As we move through Q1 of 2023, significant shifts are occurring in the Global financial and economic landscape which are of significant consequence for business. The marked upward shift in the cost (and reduced availability) of finance, largely unseen for over a decade, combined with high energy and natural resource/raw material costs and challenges and currency fluctuations has the potential to sharply to expose financial distress in businesses in many countries and global supply chains.

UK Restructuring A YEAR IN RETROSPECT 2 Contents Introduction Birmingham London North West Yorkshire UK team UK Restructuring Employment UK Restructuring Section Header Section Header Contents 3 Robert Russell UK Head of Restructuring +44 (0)161 235 4147 [email protected] 2022 – Unpredictable circumstances It would be fair to say that 2022 was not an easy year.

We have emerged from the COVID-19 pandemic amidst war, political instability, strikes and double-digit inflation rates that haven’t been seen since the early 1980s. With interest rates likely to continue to rise during the first half of 2023 and pay increases falling short of inflation, consumer confidence remains low. Companies’ margins are being squeezed by rising interest rates and when combined with increased debt burdens, supply chain difficulties and labour shortages it is no surprise that the number of insolvencies across the UK is increasing.

The end of 2022 and the start of 2023 has seen a steady uptick in restructuring activity, not only for companies with complex capital structures but also small-to-medium sized enterprises seeking to take advantage of powerful restructuring tools (such as the UK’s Part 26A Restructuring Plan or Super Scheme).

The case of Goodbox Co Labs Limited (in administration) (Goodbox) is the first example of an individual creditor unilaterally seeking to access the Super Scheme.

DO YOUR DIRECTORS HAVE SUFFICIENT TOOLS AVAILABLE TO ALERT THEM TO CIRCUMSTANCES THAT COULD INDICATE FINANCIAL DIFFICULTIES IN A COMPANY AND ASSIST THEM IN ANY FUTURE RESTRUCTURING DECISIONS?

Good Financial tools will enhance Directors' understanding the company's financial position and alert them to any early signs of potential financial difficulties.

FINANCIAL DIFFICULTIES

The restructuring of Hong Kong Airlines has been approved. It is the first time that a parallel English Restructuring Plan and Hong Kong Scheme of Arrangement have successfully been used to restructure Hong Kong, PRC and English law-governed debts.

For the background to the restructuring and details of the plan and scheme, please see our article here.

There has been no shortage of distressed airlines over the last 2.5 years as the COVID-19 pandemic and its economic reverberations wreaked havoc across the aviation sector and travel industry alike. Virgin Atlantic Airlines, Norwegian Air, Garuda, Malaysia Airlines (its leasing wing MAB Leasing Limited), AirAsia X and SAS are just some of the airlines to have gone through, or are in the process of, debt restructurings or deployment of asset and liability management strategies.