December, 2023 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS ⁎ Supreme Court: Rents receivable can be assigned by a debtor to a creditor as actionable claim. ⁎ Supreme Court: The constitutional validity of provisions of IBC pertaining to the personal guarantors upheld. ⁎ NCLAT: An operational creditor who is a participant in meetings of the CoC has no right to seek a copy of the information memorandum.
Sovereign debt restructurings are complex processes that involve negotiations with a sovereign’s creditors to alter the terms of existing debt, aiming to restore fiscal sustainability and ensure long-term economic stability.
In the current difficult business environment, lenders will be weighing up their options in respect of defaulting borrowers – for some lenders that might include attempting to own the underlying business through a credit bid. Where debt is trading at a discount, a credit bid can also be a cost-efficient opportunity for an opportunistic buyer to acquire assets. So, what is a credit bid and what issues might such parties need to consider in using one?
What is a credit bid?
Key developments of interest over the last month include: IOSCO publishing its final Policy Recommendations for Crypto and Digital Asset (CDA) Markets; the UK government publishing a response to its previous consultation and call for evidence on proposals for the future financial services regulatory regime for digital assets as well as the FCA and Bank of England publishing proposals on the UK stablecoins regulatory regime; the European Parliament's ECON Committee publishing draft reports on the proposed PSD3 and Payment Services Regulation; and the UK government publishing a Future of Paym
Mislabelling a debt instrument as a promissory note can result in unintended consequences
Promissory notes and loan notes are often used in group reorganisations to paper a loan relationship, but because the terms are frequently used interchangeably, there is scope for misuse and misunderstanding.
Ken Baird, Katharina Crinson, Guilhem Bremond, Michael Broeders, Charlotte Ausema, Jan-Philip Wilde, Ana López, Silvia Angós, Mark Liscio and Samantha Braunstein, Freshfields Bruckhaus Deringer
This is an extract from the 2024 edition of GRR's the Americas Restructuring Review. The whole publication is available here.
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
Elizabeth McColm, Brian Bolin and Mitchell Mengden, Paul Weiss Rifkind Wharton & Garrison
This is an extract from the 2024 edition of GRR's the Americas Restructuring Review. The whole publication is available here.
Monitoring Winding up Petitions
While not an everyday occurrence, a company being issued with a winding up petition is an eventuality that all providers of finance, whether on a secured or unsecured basis, will prepare for.
From a contractual perspective, facility agreements will include specific monitoring information covenants as part of the core relationship housekeeping, supported by a hard backstop of event of default triggers, with rights for debt acceleration, and (if applicable) security enforcement operating in tandem from that point.
On 30 October 2023, HM Treasury (HMT) published three documents setting out how the UK government plans to regulate cryptoassets going forward: