It is an age old problem for creditors who are faced with debtors who ask for more time to pay their debts. The Civil Procedural Rules (CPR) 14.9 and 14.10 allow for a debtor, following the admission of their debt, to request time to pay. It is open for a claimant to choose whether or not to accept a defendant’s proposals; if the claimant does not accept the defendant’s proposals, it is for the court to determine the time and rate of payment. The court’s discretion conferred by CPR 14.10 to extend time for payment has not, until now, been examined.

Corporate insolvencies are set to rise over the coming months and years as the effects of the cuts in Government expenditure begin to infiltrate the private sector.

In the European Union, Stat e interventions in the market in the form of subsidies or other economic advantages are generally prohibited, but companies can receive aid from Member States if the aid is approved by the European Commission.

Since 2005, pushed by the insolvencies and rescues of large Italian corporations such as Parmalat, Cirio and Alitalia, the Italian legislature has introduced effective tools aimed at preserving the debtor’s assets and ensuring the successful reorganisation of a debtor’s business to the benefit of all the parties involved.

Improved Rights for Unsecured Creditors of Insolvent Companies

Tax authorities have perceived recently that international corporate groups are going through internal business restructurings in large part or in whole to achieve income tax savings.

The German Government has introduced a reform of the German Insolvency Code (Insolvenzordnung– InsO) in order to further facilitate business restructurings in Germany.

In Germany, the restructuring of companies or groups in financial crisis is subject to significant tax risks.

It has become common in financings for companies to utilise a capital structure with multiple layers or tranches of debt.

One thing companies often overlook in a restructuring plan is the role of communications.