We are delighted to present the CMS guide to Restructuring, Insolvency and Distressed Debt Trading.
You are busy people. There is too much information. To try to help you identify the issues that are most important to you, we present a round-up of ten of the most significant cases and events in 2011, including Supreme Court decisions on contractual interpretation, the removal of expert witness immunity and the status of arbitrators, together with the coming into force of the Bribery Act 2010 and the new ICC Rules.
According to S&P Global fixed income research, EUR 3.7 trillion of rated European company debt is due to mature between mid-2017 and the end of 2022.This gives rise to anticipation that, in the coming years, the European financial markets will be increasingly driven by refinancing, restructuring and investment in distressed assets. Respondents to the survey “Changing tides: European M&A Outlook 2017” prepared by CMS in cooperation with Mergermarket in September 2017 have also remarked on this trend.
November 2017 saw the first successful pre-packaged bankruptcy of a wind farm operator following the introduction of this procedure to Polish bankruptcy law in January 2016. Thanks to a decision made by the bankruptcy court in Warsaw, the assets of the 6 MW wind farm in Korzęcin can now be taken over by a publicly listed company operating in the renewable energy sector.
On 9 April the Polish Parliament adopted a bill implementing the so-called “second chance” policy for businesses, pursued at the EU level.
The Act introduces a clear separation between restructuring proceedings and bankruptcy proceedings. As the latter are commonly perceived as stigmatising, the initiation of bankruptcy can hinder successful restructuring. The new Act introduces four new types of restructuring proceedings, i.e.:
Less than four years after the last fiscal amnesty, on 5 August, the Romanian government published a fiscal amnesty ordinance (No. 6/2019) that sets the framework for restructuring the debt of taxpayers with outstanding tax obligations and for the cancellation of accessory obligations.
A draft government ordinance amending the Romanian insolvency law was published on September 12. The bill is intended to increase recoverability of state receivables from insolvent companies and to reduce the debtor’s control over the proceedings.
One of the main changes relates to denying the existing right of the insolvent debtor to nominate an insolvency practitioner to be appointed as official receiver. Under the current procedure, it was mandatory for the insolvency court to follow debtor’s proposal, if the creditors did not make a proposal of their own.
Pursuant to the issuing by the Romanian government of Government emergency ordinance no. 91/2013 on the Insolvency Code, Ordinance that has been declared unconstitutional by the Romanian Constitutional Court in October 2013, Romanian Parliament adopted a new Insolvency Law (“New Law”), maintaining some of the valuable provisions of the unconstitutional Ordinance.
On 26 August 2015, the Board of the Romanian Financial Supervisory Authority (“FSA”) analysed the status of the Romanian insurance undertaking ASTRA SA, considering the report of the special administrator, KPMG Advisory.
According to the FSA, on 30 June 2015, ASTRA SA had: (i) a negative available solvency margin of approximately RON 871 million (approximately EUR 197 million), (ii) a liquidity ratio of 0.03, and (iii) a capital shortage of approximately RON 968 million (approximately EUR 220 million).
On January 25, 2016, the Romanian court handling the bankruptcy proceeding of Astra SA extended the deadline to file court claims against Astra SA to 17 February 2016. The initial deadline for filing was 18 January 2016. Creditors of Astra SA may wish to avail themselves of this extended deadline to file such claims in order to recover some or part of the amounts owed to them by Astra SA in the bankruptcy/liquidation proceedings.