In Re Zipmex Pte Ltd and other matters [2023] SGHC 88, the Singapore High Court imported into the Singapore restructuring regime the US concept of an "administrative convenience class" in a scheme voting exercise. This concept allows debtors to obtain an approval from a large number of low value creditors without those creditors being involved in the voting exercise. This reduces the administrative burden on restructuring entities.
Earlier today, Southern District of Texas Bankruptcy Judge David R. Jones (the “Court”) issued an oral ruling on motions for summary judgment regarding the propriety of Serta’s 2020 “uptier” liability management transaction (the “Transaction”). As described below, the Court ruled that the term “open market purchase” in the governing credit agreements was unambiguous, and that the Transaction “very clearly” was an open market purchase.
On Friday March 10, 2023, the Bank of England moved to put the UK arm of Silicon Valley Bank into insolvency after it applied for £1.8bn of liquidity as its parent company was collapsing. The situation remains fluid, and the following Q&A reflects our understanding as of Sunday, March 12.
UK resolution authority and powers
On March 10, 2023, the Bank of England published the following statement regarding Silicon Valley Bank UK Limited (SVB UK):
European leveraged finance markets paused for breath in 2022, due to rising interest rates, volatile geopolitics and a tightening of financial markets across the board—but what can we expect in 2023?
Overall leveraged finance activity in Spain declined in 2022, driven primarily by a severe drop in high yield bond issuance—as was the case in virtually all markets. Having weathered the worst of COVID-19, many companies had already taken steps to bring their debt under control. However, the new year brought with it new challenges, from rising inflation to events in Ukraine.
Restructuring Plans and Chapter 11: A Transatlantic Perspective
Key Takeaways
1
The restructuring plan regime - including, for the first time under English law, cross-class cram down - was introduced in June 2020. Our experience with restructuring plans proposed to-date has been that the English courts have (for the most part) implemented this new tool flexibly, pragmatically and commercially.
2
In recent years, Indonesian companies have shown both a greater willingness to use foreign restructuring processes, as well as a greater need to do so given the increasingly sophisticated financing structures and investor bases seen for Indonesian businesses. Some of the notable Chapter 15 protection cases include those involving the Duniatex Group in 2020, PT Bakrie Telecom Tbk in 2018, PT Bumi Resources Tbk in 2017, and Berau Capital Resources Pte Ltd (a Singapore SPV of PT Berau Coal Energy Tbk) in 2015.
Rises in energy costs, disruption to global supply chains, the situation in Ukraine, soaring inflation and higher interest rates are pushing several major European economies towards recession. Borrowers and issuers in the leveraged loan and high yield markets are feeling the impact and the benign refinancing conditions of 2021 are long gone. The natural consequence is rising default rates – S&P's global corporate default count for 2022 surpassed 2021's year-to-date tally during September.
On 12 January 2019, the Italian Government enacted Legislative Decree No. 14 (so called "business crisis and insolvency code (codice della crisi d’impresa e dell’insolvenza)", which entered into force on 15 July 2022 (the "Insolvency Code").
The Insolvency Code provides for, inter alia, the following:
Recently, the Supreme Court of the United Kingdom released its judgment in BTI 2014 LLC v Sequana SA1. This marks the first occasion on which the nature, scope and content of directors' duties to creditors when a company is nearing insolvency (the "Creditor Duty") has been considered by the Supreme Court.