Once perceived as a relatively moribund restructuring market, where stressed and distressed borrowers and lenders ended up stuck in interminable refinancing cycles faced with court proceedings that, at least in perception, prioritized local creditor interests, today’s landscape could not be more different.
The English High Court has sanctioned a restructuring plan in respect of EUR 3.2 billion of bonds issued by the German real estate business, Adler Group. The main objective of the plan was to avoid Adler's imminent insolvency by facilitating access to EUR 937.5 million of new money funding and thereby providing a stable platform from which Adler Group can pursue a solvent wind-down by asset sales over time in recovered market conditions. This represents a novel use of the restructuring plan procedure, which has previously been seen exclusively as a corporate 'rescue' tool.
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.
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):
Co-author: Ben Gibson, Barrister, Victorian Bar
Case Name:Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2
Issues: Voidable transactions and unfair preferences: abolition of the peak indebtedness rule, the existence of a continuing business relationship.
The abolition of the peak indebtedness rule will likely reduce the quantum of unfair preference claims where there is a running account and render some claims unviable for further pursuit.
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.
Introduction for Insolvency & Restructuring Case Summaries 2021-2022 It gives us great pleasure to introduce our Insolvency & Restructuring Case Summaries 2021-2022.
This is the first year that we have published a collated version of the Case Summaries in addition to our regular insolvency InFocus updates. The Case Summaries have been produced in response to feedback that this would be a useful resource.
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.