After years of Spanish non-performing loan (NPL) sales, a significant hurdle preventing purchasers from enforcing the underlying loans has now been removed.
As we send this final edition of Global Insight for 2018, Rick and I would like to thank you for your continued support of our multi-award-winning Global Restructuring Group. Undeterred by a back-drop of trade tariffs and Brexit, governments and professionals around the world have continued to try to develop laws and protocols to facilitate the best possible recoveries for creditors from cross-border financial distress. Since the dramatic events of 2008, jurisdictions have sought to bolster their insolvency laws, and many, to supplement them with pre-insolvency restructuring options.
Corporate reorganizations often involve waivers of inter-company debt. In general – although perhaps more obviously outside the group context – the waiver of a debt can be seen as producing a profit for the debtor company. Where this is reflected in profit and loss for accounting purposes, a taxable profit may arise in the hands of a UK resident debtor. Typically, however, debt waivers in the context of corporate reorganizations are not problematic.
On 29 October 2018, HM Treasury published a consultation paper on a breathing space scheme and a statutory debt repayment plan, which were both part of the government’s 2017 manifesto commitments.
On 01 November 2018, the President of Ukraine signed the Law "On Amendments to Certain Legal Acts of Ukraine on Resumption of Lending" (the “Law”) adopted by the Verkhovna Rada of Ukraine on 03 July 2018. The Law eliminates most of legislative gaps that existed in the loan and mortgage legal environment of Ukraine.
In this connection the Law introduced several significant changes that can be considered as rather positive for borrowers, inter alia, it:
The purpose of bankruptcy is twofold: (1) to provide the party filing for bankruptcy—the “debtor”—with a fresh start, and (2) to fairly distribute the debtor’s non-exempt assets to creditors in accordance with the priority scheme set forth in the U.S. Bankruptcy Code. This may sound relatively simple, but accomplishing these dual objectives can be difficult. One of the challenges in all bankruptcy cases is determining the scope and extent of assets that constitute “property of the estate” which are available for distribution to creditors.
What is a CVA?
A CVA is an insolvency and rescue procedure under the Insolvency Act 1986, allowing a company in financial distress to make legally binding arrangements with its unsecured creditors. Typically, this involves rescheduling or reducing the company’s debts or even amending certain contractual terms.
On July 31, 2018, the International Swaps and Derivatives Association published the ISDA 2018 US Resolution Stay Protocol. The US Protocol is intended to enable parties to ISDA Master Agreements and similar "Protocol Covered Agreements" (collectively, PCAs) to contractually recognize the cross-border application of special resolution regimes applicable to global systemically important entities and their affiliates.
In this alert, we provide a broad overview of the US Protocol and relevant resolution stay rules, then describe the effect and operation of the US Protocol.
The purpose of bankruptcy is to provide for an orderly process by which a debtor’s assets can be fairly divided and distributed among creditors.
It is also meant to ensure that debtors can start fresh. Not all of a debtor’s assets are available to creditors—the Bankruptcy Code allows a debtor to keep certain assets safe in bankruptcy through various asset exemptions available under both state and federal law. One such exemption is Michigan’s bankruptcy-specific homestead exemption.
The Fed and the FDIC, in an August 30 joint press release, announced that they are extending the filing deadline for Prudential Financial Inc. and four major foreign banking organizations to submit their resolution plans. Prudential Financial, a designated nonbank SIFI pursuant to Dodd-Frank, will now have until December 31, 2019, to submit its living will, a year later than previously required (and following previous extensions).