The National Security and Investment Act 2021 ("NSIA" or "the Act") came into force in the UK on 4 January 2022. NSIA expands the UK Government’s powers to scrutinise certain acquisitions and investments on national security grounds. NSIA applies where a target entity is within one of the 17 sensitive sectors set out in the Act and has activity in the UK. The UK Government’s power applies to transactions which complete in the period following 12 November 2020.
The Supreme Court recently denied certiorari in Picard v. Citibank, in which the petitioner sought review of a Second Circuit decision on a seemingly obscure point of law: the pleading burden for “good faith” under Section 550 of the Bankruptcy Code. The Second Circuit’s decision is part of, and highlights, a larger, systemic problem in the evolution of bankruptcy law over the last decade—the multiplication of trustee-friendly interpretations of the Bankruptcy Code that, when combined, leave innocent subsequent transferees unfairly vulnerable to meritless clawback suits.
The pandemic has brought much uncertainty to the hotel sector — Intermittent national and regional lockdowns, work from home mandates and restrictions around domestic and international travel have left hoteliers in the unenviable position of keeping the lights on but without the occupancy or footfall of pre-2020. Government measures have no doubt helped, especially the ability to furlough large sections of the workforce, but as these measures are tapered down, some hotels – particularly city centre and airport hotels which rely on business travel — will struggle.
On 25 January 2022, the Financial Conduct Authority (FCA) published draft guidance on how it will approach ‘compromises’ by regulated firms. The guidance is expressed to cover restructuring plans, schemes of arrangement and CVAs.
A number of key decisions from the English courts in 2021 illustrate the litigation trends that are likely to have implications for the financial services industry in 2022 and beyond (see below “Cases to watch in 2022”).
Market misconduct and mis-selling
In the first of a series of claims issued by ECU Group Plc in relation to alleged wrongdoing in the foreign exchange markets by a number of banks, the High Court held that:
In Parts 1, 2 and 3 we covered some easy traps to fall into when trying to execute a distressed financing tr
In our last blogpost (here) we reported how the court had, for the first time, exercised its power under s. 901C(4) Companies Act 2006 to exclude a company’s members and all but one class of its creditors from voting on a restructuring plan under Part 26A. The facts of this case are set out in more detail in that blogpost.
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New developments regarding Spanish pre-insolvency restructuring tools
14 January 2022
The bill for the Amendment of the Spanish Insolvency Law that transposes Directive 2019/1023 has been published in the Spanish Congress Official Gazette (the Bill), setting out structural reforms in pre-insolvency and insolvency regulations to achieve the following goals:
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Novedades en la Ley Concursal espaola en los procesos de refinanciacin
14 de enero 2022
El Boletn Oficial de las Cortes Generales - Congreso ha publicado el Proyecto de Ley de Reforma de la Ley Concursal que traspone la Directiva 2019/1023 (el Proyecto de Ley) que acomete una reforma estructural en el mbito preconcursal y concursal con numerosas novedades y con los siguientes objetivos:
Summary
For the first time, the court has exercised its power under s. 901C(4) Companies Act 2006 to exclude a company’s members and all but one class of its creditors from voting on a restructuring plan under Part 26A. The court was satisfied that only one class of creditors had a genuine economic interest in the company and noted that “this was not a marginal case”.
Key drivers for the court’s decision (see more detail below) were: