Major restructuring destinations each provide distinct mechanisms for rehabilitating companies in distress. Our table sets out the similarities and differences in the processes available in Australia, England & Wales, Hong Kong, Singapore, and the USA.

Object of schemes of arrangement

Over the past decade, or so, we have seen situations in Chapter 11 cases where groups of creditors contracted with debtors for the exclusive right to provide new money on extremely favorable terms, with significant "backstop" fees paid in connection therewith, and other creditors in the same class were excluded from participating in such investments. E.g., Peabody Coal, CHC Helicopter, Pacific Drilling, Momentive and most recently, LATAM Airlines and TPC Group.

This table provides a high level overview of the restructuring and insolvency processes available in Australia, comparing their purposes, effects, advantages and disadvantages.

Australia has a moratorium on the reliance upon ipso facto on insolvency (insolvency termination clauses in contracts which allow counter parties to terminate due to the fact of insolvency). It is complex and there are numerous carve-outs as outlined in the chapter.

"Ipso facto" clauses

Objective

In the context of an insolvent or near insolvent company, a receiver will be appointed, in the ordinary course, by a secured creditor seeking to have the assets which are the subject of its security realised to enable the payment of its claim. The appointment, most often, will be made under the agreement by which the security is granted or might be made under one of the property law statutes which authorise the appointment of a receiver by the court for the purpose of enforcing a security.

Object

Liquidation involves the collection of the company's assets, the realisation of those assets and the distribution of the proceeds of their sale to the company's creditors.

Process of appointing liquidator

Introduction

Informal workout agreements can renegotiate, delay, reduce or waive pre-existing debts owed by a company. For the debtor company, the main purpose of entering into an informal workout is to obtain agreements from its creditors to relinquish rights and refrain from enforcing certain debt covenants. The following are some commonly used informal workout mechanisms:

Settling any remaining uncertainty in how professionals’ hourly rates will be considered for approval in bankruptcy courts in the Eastern District of Virginia, on October 18, the Bankruptcy Court for the Eastern District of Virginia approved the professional fee applications in the Nordic Aviation bankruptcy cases, including the rates of each of the professionals as appropriate market rates. In particular, the Bankruptcy Court noted that, “[m]uch ink has since been spilled differentiating so-called ‘local’ rates from ‘national’ rates. The distinction is much ado about nothing.

Este mes apenas se han publicado resoluciones que consideremos reseñables, sólo tres de tres audiencias provinciales nos han parecido dignas de atención. A cambios las tres hacen pronunciamentos muy interesantes.

Audiencias Provinciales

Compensación de pagos entre un hotel y su operador por derivarse de una misma relación contractual.