NautaDutilh

Introduction of senior non-preferred debt in the Netherlands

3 April 2018

FCS Financial Law

KEY TAKEAWAYS

A new EU Directive adopted in December 2017 will enable EU banks, large investments firms and relevant group companies (e.g. holding companies) to issue so-called 'senior non-preferred' debt instruments.

Such senior non-preferred debt will rank senior to regulatory capital instruments (CET1, AT1 and Tier 2) and other subordinated debt, but junior to the institution's senior debt (such as deposits and ordinary creditors).

Many tax-exempt organizations can now change their state of organization and retain their current tax exemption.

Two key changes made to Australian insolvency law enhance restructuring efforts in Australia and could improve outcomes for US investors.

The court awarded OpCo Noteholders in excess of $320 million in Make-Whole Amount and post-petition interest, confirming that make-whole is an enforceable liquidated damage claim.

Introduction

Luxembourg recently adopted a number of legislative reforms aimed at modernising the rules applicable to commercial companies. In relation to the restructuring and insolvency of Luxembourg-based entities, Parliament is discussing the long-awaited Bill 6539 (the so-called 'Insolvency Bill').

In the meantime, a number of reforms which could affect the restructuring and insolvency of commercial companies have been adopted, including:

A bill containing an entirely new Insolvency Code was presented to the House of Representatives on 20 April 2017. The need for a robust insolvency framework has received substantial attention due to the ongoing economic and financial crisis. Many European countries have recently modernised their insolvency legislation or are in the process of doing so.

In the framework of the digitization of the Belgian judiciary, a central Solvency Register (www.regsol.be) will be available as of 1 April 2017.

Henceforth, creditors must file their claims electronically. The register will be accessible - subject to different procedural formalities - to magistrates, including substitute judges, clerks of court and public prosecutors as well as bankrupt parties, their creditors and counsel.

In a judgment of 24 March 2017 (in Dutch), the Supreme Court of the Netherlands upheld the longstanding requirement that for a debtor to be declared bankrupt, there need to be at least two creditors.

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Court holds that TIA § 316(b) prohibits only non‐consensual amendments to an indenture’s core payment terms.