The COVID-19 global crisis has brought cross border insolvencies into focus as companies consider the challenges that may arise where assets are situated across a number of jurisdictions and where an insolvency event may occur. Drawing on our experience of cross border restructurings, and the issues that should be considered, we look at the key issues to consider when assessing if you should implement a restructuring where an Irish company is involved and which restructuring tool to avail of.
Directors are facing difficult decisions in the current climate but, while the impact of COVID-19 will continue to be felt, it does not follow that companies should be forced out of business. Our publication 'Saving viable businesses – a look at restructuring options in the current environment' serves as reminder of rescue procedures available under Irish law.
Businesses in all sectors are facing very challenging times arising from the outset of, and reaction to, the Coronavirus (COVID-19). With the challenges in some instances being unprecedented, directors of affected companies need to be cognisant of their duties especially around decisions they are looking at making to get through current difficulties
Yeni Gelişme
Koronavirüs (COVID-19) salgın hastalığının Türkiye'de yayılmasını önlemek amacıyla hükümet tarafından alınan tedbirler kapsamında Cumhurbaşkanı tarafından İcra ve İflas Kanunu'nun ("İİK") "Fevkalade Hallerde Tatil" başlıklı 330. maddesinde kendisine verilen yetkiye dayanarak verilen "İcra ve İflas Takiplerinin Durdurulması Hakkında Karar", 22.3.2020 tarihinde yürürlüğe konmuştur.
Karar Ne Diyor?
1. Nature of process
Chapter 11 used to effect operational restructuring, deleverage balance sheet, and/or commence asset sale of the business as a going concern
Insolvency Act process primarily used to effect a pre-packaged sale of the business or assets effected by administrators (i.e. external qualified appointees).
I. DEFINITIONS
"Banking Law" means the Banking Law of Turkey No. 5411.
"BRSA" means the Banking Regulatory and Supervisory Authority of Turkey.
"Creditors" means Turkish banks, financial leasing companies, factoring companies and financing companies and Foreign Credit Institutions and International Organizations.
Recent Development
The Financial Restructuring Framework Agreement ("PreviousFA") drafted by the Banks Association of Turkey was revised to be divided into two separate framework agreements for large scale (the "Large Scale FA") and small-scale (the "Small Scale FA") debtors.
What's New?
Overview
The recent approval by the Irish High Court of a scheme of arrangement that restructured US$1.65bn of liabilities of Ballantyne Re plc (Ballantyne) confirms Dublin as one of the most effective restructuring venues in the EU. The detailed decision of Justice Barniville (available here) offers significant precedential value and is a clear endorsement that Irish schemes can be used to implement complex cross border restructurings. The Irish statute governing schemes is very similar to that of England and Wales.
Essence of the Ballantyne scheme:
Cash flow is the life blood of the construction industry, goes the mantra. Construction projects often have long supply chains. When cash stops flowing down the chain, businesses can fail. There is all too much recent evidence of this.
Someone in the chain (say, a main contractor) could seek to provide in a contract that it does not have to pay the party below (subcontractor) until it has been paid by the party above (employer). This is a 'pay-when-paid' clause.
If a transaction by a company amounts to an "unlawful distribution", and the company subsequently goes into liquidation, will an action for recovery of the benefits of that distribution, brought against the directors who authorised the transaction, be statute-barred if it is commenced by the liquidator of the company more than 6 years after the distribution was made?