Key Points

Since the Dutch Act on Court Confirmation of a Private Restructuring Plan (“WHOA” or “Dutch Scheme”) entered into force on 1 January 2021, Dutch Courts have rendered over 200 judgments.

On 9 March 2023, (one of) the largest Dutch Schemes so far was successfully completed: the restructuring of Royal IHC and its subsidiaries (as announced in IHC’s press release). In this case, the Rotterdam Court made several important decisions enhancing the effectiveness and legal certainty surrounding the WHOA, including regarding:

On March 17, 2023, the parent of Silicon Valley Bank (SVB) filed for Chapter 11 protection in the Southern District of New York. Unlike SVB itself, its parent, as a bank holding company, was eligible for Chapter 11. In the wake of the recent SVB and Signature Bank failures, it is important for those with potential claims against the parents of failed banks to understand the distinct rules and issues in bank holding company bankruptcies.

The Bank of England (BoE) has announced that Silicon Valley Bank UK Limited (SVB UK) will be sold to HSBC UK Bank Plc (HSBC). This is being carried out under the aegis of the Special Resolution Regime (SRR) — a bespoke pre-insolvency regime applicable to failing banks¹ — set forth in the Banking Act 2009 (the Act).

This alert provides background on the failure of Silicon Valley Bank and explains significant recent developments, including the subsequent failure of Signature Bank and the U.S. government’s announcement that the Federal Deposit Insurance Corporation (FDIC) will make whole all depositors of both institutions. This alert also describes the new program simultaneously announced by the Federal Reserve to provide additional liquidity to the banking industry.

Run on Silicon Valley Bank

At the end of February 2023, the High Court sanctioned seven restructuring plans for companies in the Lifeways group. Lifeways is a group providing supported living and specialist residential, support and care services at properties throughout the UK.

The case raised several interesting aspects, particularly in relation to the conduct of creditor meetings for a restructuring plan where cross class cram down is sought, and whether there is a read across from scheme case law on this issue.

Last week HM Treasury published its much anticipated consultation paper on introducing a dedicated Insurer Resolution Regime (IRR) in the UK, which would implement key international standards.

On December 27, 2022, the IRS issued two notices providing key initial guidance for the new excise tax on corporate stock buybacks and the new corporate alternative minimum tax (CAMT). Both the excise tax and the CAMT were enacted as part of the Inflation Reduction Act that Congress passed in August 2022.¹

The Dutch Act implementing the EU Directive on Insolvency, Restructuring and Second Chance (the Restructuring Directive) enters into force on 1 January 2023 and will amend the current Act on Court Confirmation of a Private Restructuring Plan (the WHOA) to some extent. Below we have set out some of the material changes as a result of the implementation.

A preventive restructuring framework and second chance

On 7 December 2022, the European Commission published itsproposal for a directive of the European Parliament and of the Council harmonising certain aspects of insolvency law (COM(2022) 702; 2022/0408 (COD)) (the Proposal). Readers may be aware that the EU has already legislated in the area of insolvency.