Japan Inc has embarked upon the overdue process of unbundling its conglomerate structures. Businesses that are being put up for sale include distressed oversees operations, particularly in the automotive sector. Managing the businesses while they are in distress, preparing them for sale, and eventually selling them, comes with a variety of legal and practical complications. The legal landscape will vary by jurisdiction, but the following aspects generally need to be considered in some shape or form regardless of the applicable law.
This panel discussion at INSOL London 2022, moderated by Debra Dandeneau, Chair of the Global Restructuring & Insolvency Group at Baker McKenzie, explored how rescue financing works in different parts of the globe and provided insights on some issues that alternative capital providers typically face. The panellists also brought a wide variety of experience and views to creating an ideal system that promotes restructuring and rescue financing.
Some of the key takeaways and insights were:
Cryptoassets continue to be in the spotlight with prices no longer heading ‘to the moon’, the recent high-profile failure of an algorithmic stablecoin and the difficulties experienced by various service providers. This all forms the backdrop to the UK Government’s publication of proposals with respect to managing the failure of systemic digital settlement asset firms.
Overview
On 27 May 2022, the Honorable Mr. Justice Harris sanctioned a scheme of arrangement introduced by Rare Earth Magnesium Technology Group Holdings Limited, which was incorporated in Bermuda, to restructure its debt. The Reasons for Decision handed down on 6 June 2022 contain detailed discussions on, among other things, the use of schemes in cross-border insolvencies.
On 18 March 2021, the UK Government published its white paper on restoring trust in audit and corporate governance. On 31 May 2022, the Government published its response to the consultation.
Introduction
Through the EU Directive on Restructuring and Insolvency of 20 June 2019 (EUR 2019/1023, “Directive“), the European Union has imposed an obligation on its member states to offer a more attractive and flexible restructuring scheme in their respective local law. The initial deadline to do so had been 17 July 2021. Only a handful of countries (most notably Germany and The Netherlands) had implemented the Directive within the initial deadline, whilst the other countries made use of the possibility to ask for a one year extension.
The High Court (Mr Justice Trower) today gave its judgment sanctioning Amigo’s ‘New Business Scheme’. A team of us at Freshfields were pleased to help Amigo with this. Here we outline the technical innovations that, despite significant legal and regulatory uncertainty, delivered the best available outcome for Amigo’s redress creditors and the prospect of Amigo lending again for the benefit of those creditors and future customers. We also identify two approaches that addressed the practical challenge of implementing a complex legal process with retail creditors.
Introduction
In brief
On 6 May 2022, the Honorable Madam Justice Linda Chan granted a petition for the winding-up (in Hong Kong) of Up Energy Development Group Limited, which was incorporated in Bermuda.
In brief
Snapshot on the status of implementation of the EU Restructuring Directive in selected Member States and the new English scheme
Introduction