On 28 January 2022, the government of the Republic of South Africa promulgated the Financial Sector Laws Amendment Act, No. 23 of 2021 (the "FSLAA"). However, not all of its provisions have come into force. To date, sections 2, 3, 12 and 58 of the FSLAA have come into effect. The FSLAA aims to, amongst other things, introduce South Africa‘s first comprehensive deposit insurance scheme that will ensure that depositors are paid their funds when a bank fails.

Historically, the French restructuring system has always been perceived as a debtor-friendly system. In recent years, however, changes to the French legislation have favoured creditors' interests and the courts have favoured a number of lender-led restructures, enabling lenders to take control of the debtor from its existing shareholders.

Lock-up agreements typically involve the company's creditors committing in advance to vote at the relevant class meeting in favour of the contemplated scheme. Lock-up agreements serve an important commercial purpose of either securing support or giving an indicator as to likely support for the scheme before the parties incur the time and expense in finalising the negotiation process of the scheme.

In order to encourage the promotion and specialized attention of corporate restructurings and insolvency proceedings, by agreement of the Plenary of the Federal Judiciary Council of Mexico, two district courts specialized in commercial bankruptcy matters (concursos mercantiles) have been created, located in Mexico City.

Courts in Commercial Bankruptcy Matters

On 1 November 2021, the Federal Decree Law No. 35 of 2021 (the "Decree") (amending certain provisions of the Federal Decree Law No.9 of 2016 concerning Bankruptcy (the "UAE Bankruptcy Law")) came into force. The publication of the Decree follows a significant decision relating to directors' duties by the Dubai Court of First Instance in the matter involving the bankruptcy of Marka Holdings PJSC ("Marka") (the "Marka Case").

Overview

The European distressed market has been quiet this year. This is a function of ongoing government support, supportive sponsors and lenders, and a huge amount of liquidity in the market. Many companies which we and our clients identified as potential restructuring candidates have managed to complete successful refinancing transactions and have avoided the restructuring negotiation table.

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

On October 20, 2021, Democratic senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wisc.), Sherrod Brown (D-Ohio), and Jeff Merkley (D-Oregon), and Independent senator Bernard Sanders (I-Vermont), introduced to the United States Senate proposed legislation S. 3022, the Stop Wall Street Looting Act of 2021 (the “SWSLA”),¹ as a reworked version of legislation previously proposed in 2019.

In what appears to be an attempt at wholesale reform of the private equity industry and bankruptcy practice, the SWSLA proposes to:

Third-party, or nondebtor, releases have continued to attract attention from both commentators and legislators in the wake of recent cases such as Purdue Pharma LP, Boy Scouts of America and USA Gymnastics. Most recently, Senators Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.) and Richard Blumenthal (D-Conn.), and Representatives Jerrold Nadler (D-N.Y.) and Carolyn B.