1. Introduction
On 17 May 2011, the GC annulled a Commission decision requiring recovery of state aid from Polish steel producer Technologie Buczek (TB). The case concerned the actions taken by the Polish authorities in implementing a plan to restructure the steel industry. The GC found that the Commission had been correct to find that TB had benefited from a decision by the Polish authorities not to apply for bankruptcy but to allow the company to continue to operate without repaying its debts.
This newsletter discusses the draft legislative proposal for a Financial Institutions (Special Measures) Act (Wet bijzondere maatregelen financiële ondernemingen; "Intervention Act") that was recently published for consultation along with a draft explanatory memorandum and a document containing specific questions. The draft proposal would broaden the powers of the Dutch Central Bank (De Nederlandsche Bank; "DNB") and the Minister of Finance to intervene at financial institutions that are experiencing "serious problems".
In previous issues of TransAtlantic, we reported that the UK Pensions Regulator had issued contribution notices (CNs) and financial support directions (FSDs) against insolvent companies in the Nortel and Lehman Brothers groups. Click here for the June story on Nortel (see page 5); click here for the November story on Lehman (see page 7).
Introduction
The restructuring practice often calls for creative solutions, especially when the stakes are high and the debtor is in serious financial distress. Many restructuring lawyers have at times faced the question of whether it is possible for a debtor to transfer assets to a creditor subject to the condition precedent of the debtor being declared bankrupt.
The High Court has decided that financial support directions can be issued against insolvent companies as well as solvent ones.
The administrators of 20 insolvent companies in the Lehman Brothers and Nortel groups had argued that the Pensions Regulator’s Determinations Panel had no legal power to determine that it would be reasonable to issue FSDs against these companies. The High Court disagreed and decided:
On March 8 2010 the Amsterdam District Court dismissed an application by the administrators of the Dutch branch of Landsbanki hf to extend the term of the emergency regulations that had been declared applicable to the Dutch branch by the court on October 13 2008.(1) As a result, the regulations ceased to apply on March 13 2010.
Facts
Summary and implications
Almost exactly one year on from the Order* coming into force, many people remain unaware that it is no longer possible to appoint an administrative receiver over an overseas incorporated company.
Lenders and indeed insolvency practitioners should be aware that this is the case even when dealing with qualifying floating charges created before 15 September 2003 but alternative strategies, including administration, may be pursued to the same effect.
Administrative receivership
Summary and implications
The Government is proposing to give struggling companies a protected moratorium against enforcement action, to help them to negotiate a restructuring deal with their creditors.
The moratorium would be available to all companies which are preparing a CVA or scheme of arrangement. At present, a moratorium is only available to small companies* who are proposing a CVA.