This issue considers the most important provisions of the resolution adopted at the Plenary Session of the Supreme Commercial Court of the Russian Federation (the “SCC”) No. 88, dated 6 December 2013, “On Accrual and Payment of Interest on Creditors’ Claims in Insolvency” (the “Resolution”)1. The Resolution resolves a number of important practical issues and creates new regulations governing, in particular:

On January 10, 2014, the Federal Executive Branch of México published in the Official Gazette the legal amendments to México’s Commercial Bankruptcy Law (Ley de Concursos Mercantiles, or LCM), effecting the most comprehensive set of changes to the LCM since its enactment over 13 years ago, and establishing new rules for bankruptcy proceedings in México with the intent to improve the position of creditors dealing with the insolvency of local companies.

Fundamental restructuring of insolvent companies—in any sector— is a fight for survival.

Given the global nature of the industry, it is perhaps no surprise that shipping companies and their advisors have sought appropriate court protection to alleviate creditor pressure and a possible break-up of the business where a consensual restructuring is not possible.

A senior creditor can obtain significant leverage over a chapter 11 debtor if it is able to vote not only its claim but the claims of junior creditors in connection with the solicitation of a plan of reorganization. Obtaining such leverage, however, has proven problematic in the past. Among other things, courts have been reluctant to enforce pre-bankruptcy assignments or waivers of voting rights contained in intercreditor agreements, holding that such assignments or waivers may violate the Bankruptcy Code and rules. In Avondale Gateway Center Entitlement, LLC v.

The English law scheme of arrangement (or “scheme”) has re-emerged as a favoured tool of choice for those engaged in complex financial restructurings, in particular where a consensual solution may not be capable of implementation. This bulletin focuses on the key terms of the most high profile recent schemes, including those of WIND Hellas, La Seda, European Directories and Cattles, and identifies current hot topics and market trends.

Background

A new form of bankruptcy procedure, Accelerated Financial Safeguard (sauvegarde financière accélérée, “AFS”) was adopted by the French Parliament on October 22, 2010.

Court Acceptance of Petition for Corporate Reorganization

1. Introduction

On 25 August 2010, the German government published a draft of an Act for the Restructuring and Orderly Liquidation of Credit Institutions, for the Establishment of Restructuring Fund for Credit Institutions and for the Extension of the Limitation Period of Corporate Law Management Liability (Restrukturierungsgesetz, the “German Restructuring Act”). It is anticipated that the German Restructuring Act will soon be introduced to the German parliament and be passed quickly.  

In light of recent reports released to the market, a lender in the leveraged loan market would be forgiven for indulging in some cautious optimism. New-issuance in July aggregated to €9.5 billion - a 13-month high. The year-to-date leveraged buy-out volume of €10 billion (38 deals) compares favourably with the €2.2 billion of volume (13 deals) for the same period in 2009. Against this backdrop, however, lenders should consider the recently released statistics from the Insolvency Service, and other economic data, which suggest that the economic outlook remains uncertain.

Not necessarily so, according to the recent rulings of Southern District of New York Bankruptcy Judge Allan Gropper in the US$27 billion General Growth Properties Chapter 11 bankruptcy—at least with respect to the issue of substantive consolidation.