What do Ukraine, Sri Lanka, and Ghana have in common? They’ve all guaranteed bonds that once traded at a sizeable discount to their sovereign counterparts.

On July 6, Delaware Bankruptcy Court Judge Craig T. Goldblatt issued a memorandum opinion in the bankruptcy cases of TPC Group, Inc., growing the corpus of recent court decisions tackling “uptiering” and other similar transactions that have been dubbed by some practitioners and investors as “creditor-on-creditor violence.” This topic has been a hot button issue for a few years, playing out in a number of high profile scenarios, from J.Crew and Travelport to Serta Simmons and TriMark, among others.

Since our last blog on this topic, the English court has provided further guidance on certain key issues and novel features relevant to restructuring plans and schemes of arrangement in its recent judgments on Amigo Loans, Smile Telecoms, EDF & Man, Re Safari Holdings (Löwen Play) and Haya. This piece provides an overview of key points from these cases.

As Russia’s invasion of Ukraine continues, governments around the world are coordinating and responding with increasingly severe sanctions and export controls on Russian entities, institutions, and individuals. Insolvency practitioners first wonder whether sanctioned entities, or entities connected to sanctioned individuals, can enter into an insolvency procedure and, if so, how does the insolvency practitioner accept an appointment and get paid?

There are distinct advantages to investors sitting on the boards of their portfolio companies, not least their ability to look after their investment and work toward maximising their return. The human capital provided by investor directors can be invaluable in driving efficiencies and creating growth opportunities. The interests of investors, investor directors, and the company will generally be aligned in seeking the success of the business.

The National Security Investment Act 2021 (the “Act”) came into effect on 4 January 2022 and introduced a new UK investment screening regime focused on national security risks (the “NSI Regime”). It is similar to the Committee on Foreign Investment in the United States (“CFIUS”) regime. The Act is wide reaching; it provides the UK government with the power to review and intervene in transactions that may pose a UK national security risk due to a transfer of control of sensitive entities or assets.

On 10 March 2022, the UK High Court held the adjourned sanction hearing regarding Smile Telecoms Holdings Limited’s (“Smile”) second proposed restructuring plan. Despite Smile Telecoms’ first restructuring plan being sanctioned by the UK High Court back in March 2021, the African telecommunications company still faced liquidity shortages. This prompted the company to propose a second restructuring plan under Part 26A of the UK Companies Act 2006 (the “Companies Act”). The second restructuring plan would see the Smile Telecoms’ group senior secured lender, 966 CO S.a. r.l.

Government support during the pandemic and extremely strong credit markets saw exceptional fund raising levels in 2021, in spite of a slower Q4. Borrowers secured increasingly favourable terms from their lenders, with only a little pushback as the year progressed. Private credit continued to compete for greater market share and found interesting opportunities in smaller and more complex names. 2021 has proved to be a record year for financings and the continued availability of cheap capital, with reasonable stability and outperformance from riskier credits.

The restructuring plan has so far proven to be a powerful tool to facilitate restructurings of complex capital structures. Two recent cases provide further helpful guidance for advisers when formulating a restructuring plan and for investors who may be affected by its terms.

Amicus Finance plc (in administration) ("Amicus")

This week, the Ninth Circuit takes a close look at a sizable antitrust jury award, and explains what constitutes a tax “return” for purposes of bankruptcy law.

OPTRONIC TECHNOLOGIES, INC v. NINGBO SUNNY ELECTRONIC CO. LTD.

The Court held that sufficient evidence supported a jury verdict holding telescope manufacturers liable for antitrust violations.