The making of a bankruptcy order alone will not deprive a judgment creditor of a final charging order where it is obtained before the bankruptcy order is made.

The Treasury has published the Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009, which will come into force on 1 October 2009. They will amend the Financial Markets and Insolvency (Settlement Finality) Regulations 1999, following changes in insolvency law.  

The Investment Banking Insolvency Panel of the FMLC has responded to Treasury’s consultation on developing effective resolution arrangements for investment banks. The response is wide-ranging and looks at clarity, transparency and access before setting out views on client assets and insolvency processes.

The European High Yield Association (a trade association representing participants in the European leveraged finance market) is calling for new restructuring laws, warning that the existing regime makes it more likely that a company in financial difficulties will collapse.  

Libby Elliott looks at the proposals, which are designed to create a formal procedure for restructuring distressed companies.  

The need for change

On 4 March 2009, the Office of Public Sector Information published the Bank Insolvency (England and Wales) Rules 2009 (the Rules) and accompanying explanatory memorandum. The Rules came into force on 25 February 2009 and give effect in England and Wales to the new bank insolvency procedure under Part 2 of the Banking Act 2009.

Treasury has published two orders made under the Insolvency Act 1986 and the Banking Act 2009. The orders are:  

Yesterday, the U.K. government published a report entitled "Developing effective resolution arrangements for investment banks" which sets forth, primarily in response to the September 2008 collapse of Lehman Brothers Holding, Inc. (in particular its U.K. arm, Lehman Brothers International (Europe)), the U.K.

Historically, the United Kingdom has not had a specialised bankruptcy regime for dealing with the failures of financial institutions. Rather, these were handled under the same rules that applied to ordinary corporations.

Yesterday, Iceland’s Prime Minister announced that the government has decided not to bring suit against the UK authorities for the Freezing Order issued against Landsbanki by the UK authorities on October 8, 2008, on the basis of their Anti-Terrorism, Crime and Security Act.

In the current economic climate, there are a number of key issues facing borrowers in the event of lender insolvency or default.

Committed facilities/term loans

Provided they are fully drawn and the borrower is not in breach itself, the impact in the short term may not be too severe.