July 2018
2018 Summer review M&A legal and market developments
In this issue...
Contractual provisions.............................................................1 Company law...........................................................................4
Listed companies....................................................................7 Good faith................................................................................9
Authors: Philip Broke, Veronica Carson
European Leveraged Finance Alert Series: Issue 6, 2018
One: Regulatory framework for Lending in Spain
In its April 2018 decision, the BGH ruled on the question whether the directors of a company that has been granted debtor in possession status by the respective insolvency court can become personally liable for a breach of a duty of care vis-à-vis the creditors like an insolvency administrator. The underlying legal question was the subject of a controversial academic discussion in the past.
In Citibank NA v Oceanwood Opportunities Master Fund(1) the High Court confirmed the validity of a senior noteholder's directions under a note structure governed by the laws of multiple jurisdictions. In doing so, it highlighted the common ground between the London and New York markets with regard to the common law principles of contractual construction and demonstrated the efficiency of the speedy trial procedure in the Financial List.
Carillion, the UK’s second largest construction company, entered compulsory liquidation on 15 January 2018, with estimated debts of £1.5bn and a pension deficient of c£800m, following three profit warnings in 2017. The company employs 20,000 people in the UK and 43,000 people worldwide. It is thought that some 30,000 companies may be affected by the liquidation.
2018 will be a year of change, challenges and opportunities for banks and financial services providers.
In Bespark Technologies Engineering Ltd v JV Fitness Ltd the High Court recently took the opportunity to remind liquidators of their duty to give full and frank disclosure when making an ex parte (without notice) application to the court.(1) A failure to do so could have serious consequences, including a refusal to approve the appointment of a liquidator or an order for his or her removal. The duty to be full and frank applies to all ex parte applications, so there are general lessons to be learned.