A challenging economic environment and Covid-19 are behind a looming wave of contentious insolvency in the Middle East. The legislative framework in the UAE now provides the tools to creditors to face the challenge.
Few things go together as naturally as fraud and insolvency. The pattern is now well rehearsed: scams pile up unnoticed while money flows in the good times, but when recession hits, increased scrutiny from lenders, counterparties and the tax man – not to mention insolvency practitioners – means fraud is far more likely to be discovered.
Pre-packaged administration sales (where a sale of key assets is agreed prior to the appointment of administrators and then implemented by the administrators immediately following their appointment), have been a widely-used and highly successful tool to rescue businesses, or parts of businesses, that may otherwise have languished in administration interminably.
Following the end of the flexibilities afforded by The Corporate Insolvency and Governance Act 2020 (CIGA) in relation to the conduct of general meetings and following the publication of guidance by The Chartered Governance Institute (ICSA) we have reviewed notices of Annual General Meetings (AGMs) to be held after 30 March 2021. We set out some common themes around how companies are organising their AGMs in light of the guidance issued and the current restrictions in place.
European Real Estate Finance: Market Update – Q1 2021 March 2021 Authors: Jeffrey Rubinoff, Dr. Thomas Flatten, Thierry Bosly, Hadrien Servais, Carl Hugo Parment, Fernando Navarro, Christophe Goossens, Julio Peralta, Angel Calleja, Aurélie Terlinden, Alexandra Stolt, Amitaben Patel & Brendon Vyas Further information on the response to COVID-19 can be found here, and we also have a German-language article, available here, looking at the impact on commercial leases. LIBOR Discontinuation Much has happened in the world of LIBOR Discontinuation since our last update.
The Kingdom of Saudi Arabia overhauled its corporate insolvency framework in 2018 with the introduction of a new bankruptcy law. In this client alert we examine the new Bankruptcy law in detail.
Executive Summary
The Covid-19 pandemic has had a severe impact on the economy. This has given rise to an increasing number of claimants with claims against insolvent businesses.
In these circumstances, a third-party claimant would usually notify the company’s insolvency practitioner of its claim. The claimant is then required to pursue its recovery as part of the insolvency process alongside other creditors.
The Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act)1
The economic impact of the COVID-19 pandemic led to a wave of creditor schemes of arrangement ("schemes") and restructuring plans ("RPs") in the second half of 2020, which shows no sign of abating in 2021. For the uninitiated, the scheme (a long-established tool) and the newer RP process are court led UK restructuring options that a company can use to bind a minority of creditors into a restructuring. An RP can also be used to "cram down" an entire dissenting creditor class into a deal where certain conditions are met.
The UK’s new “restructuring plan” was enacted in June 2020.1 This highly-anticipated regime introduced (for the first time into English law) a tongue twisting “cross-class cram down” (CCCD) mechanism by which a restructuring plan can (at the court’s discretion) be imposed on an entire class of dissenting creditors or members.
Until recently, only two companies had successfully used the restructuring plan regime.2 In both instances, CCCD was not considered as the required voting thresholds (i.e. 75%) were met.
In 2020, commercial chapter 11 bankruptcy filings climbed to their highest levels in recent years, as COVID-19 disruption sparked sharp declines in GDP and volatile stock market swings. Notably, the pandemic accelerated the restructurings of some companies that were already on the precipice of financial distress, particularly in the retail, energy, travel and hospitality sectors.