In our recent note “Treatment of senior unsecured debt in European leveraged finance transactions: the need for an intercreditor agreement”, which can be viewed here, we addressed the increase in flexibility in European financings to incur senior unsecured debt and the risk that the lack of any agreed intercreditor arrangement may impair senior secured lenders’ ability to realise recoveries from a European Credit

Can’t get no satisfaction? Sometimes you can! Would you prefer to have security to cover a debt or the cash in the bank, challenges?

The interest rate mis-selling scandal took another twist recently when a landmark legal case was dismissed by the High Court. Had the case been successful it would have challenged the banks’ £2.1bn compensation scheme set-up to settle inappropriate interest rate swaps – however the decision only brings temporary relief for the banks.

Background

With the cyclical fluctuation in oil and gas commodity prices, the UKCS has had its fair share of E&P companies going insolvent. As the UKCS matures, the profile of companies that invest in the region is changing. Many smaller parties, potentially with less access to capital, are now building positions.  The commercial exposure is that some companies will not be able to meet cash calls, creating headaches for their co-venturers.

In the recent case of Bank of Cyprus UK Limited v Menelaou, the Supreme Court showed the flexibility of the equitable remedy of unpaid vendor's lien.

Facts of the case

On 7 October 2015, the Financial Conduct Authority launched a ‘Call for Inputs’ on competition in the mortgage sector. The Call for Inputs provides an opportunity for interested parties to help the FCA identify potential areas where competition may not be working well and could be improved.

In the case of Bibby Factors Northwest Limited v HFD Limited and MCD Group Limited the Court of Appeal has ruled that there is ordinarily no duty on a company whose debt has been purchased (the Debtor) to inform the purchasing company (the Funder) of any pre-existing contractual arrangements it has with the company assigning the debt (the Assignor).  If the Funder wants this information it must directly request it.

Implications

From 1 January 2016, deposits made by private individuals and small businesses to any authorised firms are protected by the Financial Services Compensation Scheme to a limit of £75,000 (previously £85,000).

The Ministry of Justice is consulting on a revised draft Pre-action Protocol for Debt Claims (Debt Protocol) after an earlier version was lambasted by representatives of the credit industry as being totally disproportionate. The new version attempts to strike a more proportionate balance between the needs of creditors, debtors and debt advisors.

In Deutsche Bank AG v Sebastian Holdings Inc and another (2015), the High Court declined to set aside an order under CPR Part 71 that a non-resident foreign officer of a judgment debtor provide information needed to enforce the judgment.  There is no requirement that there be "exceptional circumstances" for such an order to be made. 

Background