HM Treasury has issued a press release stating that the Government welcomes the European Commission's approval of the restructuring of the Royal Bank of Scotland and State Aid approval for the Asset Protection Scheme.

View Government welcomes approval of RBS restructuring, 14 December 2009  

The FSA has released a further update on Keydata Investment Services Limited. The update reads as follows:

"On 18 November 2009 the Luxembourg financial services regulator, the Commission de Surveillance du Secteur Financier (the CSSF) applied to the Luxembourg court for Eric Collard of KPMG ADVISORY s.a.r.l to be appointed as administrateur provisoire (provisional administrator) of Lifemark S.A. (Lifemark).

On 9 November, the PPF published proposals for the 2011/12 pension protection levy year which aim to improve the way the insolvency risk for sponsoring employers is assessed. The proposals reflect industry feedback and a review of methodology and insolvency probabilities carried out by Dun & Bradstreet (D&B).

The key changes include:

DSB Bank (DSB), a small Dutch lender, has been declared bankrupt on 19 October 2009. Other Dutch banks will now have to guarantee DSB's deposits. The Dutch central bank said on 19 October 2009 that it had activated the national deposit guarantee system to deal with the bankruptcy, and that it expects eligible depositors to be reimbursed by Christmas. The banks will have to pay into the guarantee system in proportion to their market share.

The British Bankers’ Association has released the following statement on bank restructuring:

In an October 13, 2009 decision involving bankrupt homebuilder TOUSA, Inc. (“TOUSA”), the United States Bankruptcy Court for the Southern District of Florida (the “Court”) avoided as fraudulent transfers certain liens given and debt obligations incurred by several of TOUSA’s subsidiaries to a syndicate of lenders who provided $500 million of new loans to TOUSA. In addition, the Court ordered those lenders, and others that received the proceeds of the new loans, to repay hundreds of millions of dollars to the bankrupt estates of these subsidiaries.

The insolvency of UK insurance companies is, fortunately, a fairly rare event. Even in the current difficult times - and despite speculation about the solvency of some insurers - we have yet to see a UK insurance company actually go into liquidation.

On 14 October 2009 the Government announced a major change to the way in which company buy-backs of debt will be taxed. The change may be relevant to any corporate debt buy-back where debt is being purchased at less than face value, including the exercise of a post-enforcement call option in a securitisation.

The global financial crisis has resulted in many loans trading at below par value. This presents borrowers with an opportunity to purchase their own debt and, therefore, extinguish the debt at a reduced cost.

The recent Scottish Court Opinion on Scottish Lion’s proposed solvent scheme of arrangement,1 in which it was held that to sanction a solvent scheme there must be a “problem requiring a solution” and, in effect, unanimous creditor approval, was followed by a short hearing on Wednesday 14th October in which Lord Glennie said that he would dismiss the petition for the scheme.

On September 15, 2009, in an order read from the bench, the Honorable James M. Peck, Bankruptcy Judge in the United States Bankruptcy Court for the Southern District of NewYork, and the presiding judge in the Chapter 11 proceedings of Lehman Brothers Holdings Inc. (“LBHI”) and other associated Lehman Brothers United States entities, held a key provision of the standard ISDA Master Agreement unenforceable in a bankruptcy context.