Lending to a foreign company? If you choose English law to govern your facility documents and provide for the English court to have exclusive jurisdiction, an English scheme may be a viable means of restructuring the debt later, if the need arises.

ICMA’s European Repo Council has responded to the Commission's consultation on CSDs. Its main concerns focus on:

The Commission is consulting on the details of a framework for dealing with failing banks. Following October's Communication on a crisis management framework, the Commission wants to make a legislative proposal on technical measures for dealing with relevant institutions in summer 2011. The consultation looks at how to give authorities across the EU powers and tools to restructure or resolve all types of institutions in crisis. It covers:

The Commission is consulting on the application of the current Community guidelines on State aid for rescuing and restructuring firms in difficulty. It has provided Member States and other interested parties with a questionnaire, on which it asks for responses by 2 February 2011.

Summary

On 1 July 2009, UNCITRAL adopted the Practice Guide on Cross-Border Insolvency Cooperation. The Practice Guide provides a useful reference source on some practical aspects of cooperation and communication to deal with many of the conflicts and tensions between stakeholders and jurisdictions inevitable in cross-border cases. To ease these tensions, it is often essential for creditors and, importantly, the courts concerned to reach agreement about how the process will be handled.

International context

The Banking Bill recasts key aspects of bank supervision and insolvency. With such wide-ranging changes to digest, financial institutions and other companies could be forgiven for ignoring the seemingly obscure clauses relating to financial collateral. But these provisions could remove legal uncertainty for those taking collateral particularly in traded markets (like energy trading) where banks are not always the main players.

On 22 November 2016, The European Commission announced a proposal for a new, more consistent approach to business insolvency across the member states of the EU. It is hoped that the proposed directive will create greater efficiencies in the insolvency process, enhance financial stability and provide greater certainty to investors and companies operating across the EU.

The recent case of Simpson v Commission of Inland Revenue (HC, 17/5/2011; Dobson J, Wellington, CIV 2010-485-1860) concerned the issue of whether receivers are personally liable to account for goods and services tax (GST) on the sale of six properties effected by them.

The US Federal Deposit Insurance Corporation (FDIC) and the Board of Governors of the Federal Reserve System (FRB) have jointly approved a proposed rule requiring certain companies to periodically submit Resolution Plans (also referred to as “living wills”) and Credit Exposure Reports (the “Proposed Rule”) to the FRB and FDIC.1

On 23 February, the European Commission (“Commission”) opened an in-depth investigation, to verify whether the measures notified in the context of the restructuring of the Czech national flag carrier Czech Airlines are in line with the EU rescue and restructuring aid guidelines. The measures comprise a loan of CZK 2.5 billion (around €94 million) granted by the State-owned undertaking Osinek under allegedly preferential conditions, its later de-collateralisation and transformation into equity capital and a potential guarantee for the purchase of an airplane.