Fundamental restructuring of insolvent companies—in any sector— is a fight for survival.
Given the global nature of the industry, it is perhaps no surprise that shipping companies and their advisors have sought appropriate court protection to alleviate creditor pressure and a possible break-up of the business where a consensual restructuring is not possible.
PwC, the administrators in the Lehman Brothers administration in the UK, have made several applications to the Court seeking directions on their approach to the distribution of clients’ money and assets. On 29 February 2012 the Supreme Court gave judgment on issues that are central to the interpretation and application of the rules for the protection of client money made by the Financial Services Authority. The issues raised are ones that have divided judicial opinion.
German Insolvency Law – a Leap Forward
Creditors have often complained that German insolvency law does not give them sufficient influence in insolvency proceedings. On 1 March 2012 new amendments to the German bankruptcy code came into force which go some way towards ameliorating this concern and make a host of changes which should improve German insolvency law to facilitate an insolvency culture which facilitates reorganisation rather than liquidation of assets.
Clarification on the jurisdiction of the English courts to sanction schemes of arrangement for overseas companies
Providing further evidence that schemes of arrangement (“schemes”) are an increasingly useful tool in the restructuring of overseas companies, on 20 January 2012, the High Court sanctioned a scheme proposed by PrimaCom Holding GmbH (“PrimaCom”), a German incorporated company, with its centre of main interests (or “COMI”) in Germany and whose affected creditors were domiciled outside the UK.
The object of this article is to analyze a controversial issue which is considered in recent times by the Mercantile Courts as a current incident involved in the Bankruptcy Proceedings and more specifically, to analyze the Judgement issued by the Court of First Instance no. 9 and Mercantile Court of Cordoba dated April, 19th 2010, in which the aforementioned incident is involved.
This incident is essentially based on establishing the treatment that should be granted to the additional guarantees provided by third parties in bankruptcy proceedings.
On September 13, 2011, the Federal Deposit Insurance Corporation (the “FDIC”) approved a final rule (the “Final Rules”) to be issued jointly by the FDIC and the Board of Governors of the Federal Reserve System (the “Board”) intended to implement section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) which requires each non-bank financial company supervised by the Board and each bank holding company with assets of US$50 billion or more (each, a “Covered Company”)1 to report periodically to the Board, the FDIC and the Financial Stability Oversig
On the bill of the Federal German Government for an Act Serving the Further Facilitation of the Reorganization of Enterprises (ESUG)
A senior creditor can obtain significant leverage over a chapter 11 debtor if it is able to vote not only its claim but the claims of junior creditors in connection with the solicitation of a plan of reorganization. Obtaining such leverage, however, has proven problematic in the past. Among other things, courts have been reluctant to enforce pre-bankruptcy assignments or waivers of voting rights contained in intercreditor agreements, holding that such assignments or waivers may violate the Bankruptcy Code and rules. In Avondale Gateway Center Entitlement, LLC v.
Recently the German Federal Government introduced a reform of the German Insolvency Code by adopting a draft bill of an Act to Further Facilitate the Restructuring of Businesses (the “Bill”). The Bill primarily focuses on the facilitation of insolvency plans as a tool for restructurings and to eliminate certain obstacles of the German insolvency law. If enacted as proposed, the Bill would simplify the purchase of shares of an insolvent company and would give investors more influence and flexibility in in-solvency plan proceedings.
INSOLVENCY PLANS
The English law scheme of arrangement (or “scheme”) has re-emerged as a favoured tool of choice for those engaged in complex financial restructurings, in particular where a consensual solution may not be capable of implementation. This bulletin focuses on the key terms of the most high profile recent schemes, including those of WIND Hellas, La Seda, European Directories and Cattles, and identifies current hot topics and market trends.
Background