This article was first published in December 2023 by Law360.
English schemes of arrangement have long been used to restructure the debts of both English and foreign companies. This has made the UK a center of cross-border restructurings.
The scheme's more powerful cousin, the restructuring plan, with its ability to cram down entire classes of dissenting creditors, has bolstered the UK's position in the global restructuring market.
If you have ever filed a claim in a bankruptcy case, you have also probably received an offer from a third-party claims purchaser to purchase your claim. Before deciding to sell the claim, there are pros and cons that must be carefully considered.
Key Issues
There are several advantages to selling your claim:
A Section 363 sale is a sale of a company's assets pursuant to Section 363 of the Bankruptcy Code. The Bankruptcy Court will approve a 363 sale if the debtor can demonstrate a "substantial business justification" for the sale.
Key Issues
In general, Section 363 bankruptcy sales proceed as follows:
On Thursday 9 November, Macfarlanes hosted a webinar which focused on the role of directors and in particular navigating those stresses and strains placed upon them in the uncertainties of the current markets.
The webinar was given by an expert panel comprising of finance partner and head of Macfarlanes’ restructuring and insolvency group, Jat Bains, finance partner and qualified insolvency practitioner, Paul Keddie, and litigation partner, Lois Horne.
The panel discussed the following three principal themes.
This article, part of our Creditor’s Rights Toolkit [link] series, serves as an essential guide for vendors navigating the complex landscape of dealing with financially distressed or bankrupt customers. It provides a detailed exploration of the options available to vendors who are proactive and quick to act when they learn of their customer’s financial woes.
On 13 October 2023, the Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, discontinued the disqualification proceedings which it had initiated against five former non-executive directors (NEDs) of Carillion plc, the construction and outsourcing giant that collapsed into liquidation in 2018.
Your customer, who has always paid on time, has started to fall behind on payments and maybe has even started to short pay invoices. When you inquire about what is going on, your customer has a million excuses but assures you that everything is fine. On the one hand, you want to continue to do business with this long-standing customer. On the other hand, you are worried about the growing accounts receivable and a potential bankruptcy filing by your customer. How can you protect your business?
Key Issues
Any restructuring where there are multiple tiers of debt and lenders with different interests and views can be tricky. Lenders will try to anticipate these difficulties by entering into an intercreditor agreement (an ICA) setting each lender’s ranking and rights to enforce. Typically, an ICA will allow the senior lenders at least the option of taking the lead on an enforcement or a restructuring.
This week:
Successor liability is a catchall term for a group of legal theories that, in certain circumstances, allow a creditor to recover amounts owed by its obligor from a person or entity who succeeds to the assets or business of that obligor. Typically, claimants cannot pursue successor liability against a purchaser in a bankruptcy sale because most sales are made "free and clear" of such claims under Section 363(f) of the Bankruptcy Code. However, there are some limited exceptions to this general rule.