The Internal Market Directorate is discussing with stakeholders whether the debt write-down or bail-in tool would help a managed reorganisation or winding down of a financial institution that faced imminent failure. This discussion takes place in the context of the ongoing work on an EU framework for managing crises in the banking sector. The debt write-down or bail-in tool would complement the special resolution powers that need to be available for authorities to stem risks to financial stability and limit the recourse to taxpayer’s money.
PwC, the administrators in the Lehman Brothers administration in the UK, have made several applications to the Court seeking directions on their approach to the distribution of clients’ money and assets. On 29 February 2012 the Supreme Court gave judgment on issues that are central to the interpretation and application of the rules for the protection of client money made by the Financial Services Authority. The issues raised are ones that have divided judicial opinion.
On 21 March 2012, following an in-depth investigation, the European Commission announced that it has approved the UK government’s plans to relieve the Royal Mail of excessive pension costs and to provide restructuring aid consisting of a debt reduction of £1,089 million. Read more.
The EU insolvency law has resulted in insolvent debtors shopping for a better jurisdiction in which to become bankrupt. This article examines why and how.
Why?
The EC Regulation on Insolvency Proceedings 2000 (the ECIR), came into effect in May 2002, providing a framework for the national jurisdictions to work together by recognition of each states insolvency mechanisms. However the EC Regulation does not harmonise substantive differences in insolvency law between the subscribing nations.
On 30 March 2012, the European Commission published a consultation on the future of European insolvency law.
The cornerstone of European insolvency law is Regulation (EC) No 1346/2000, known as the Insolvency Regulation. The Insolvency Regulation has been in force since 31 May 2002 and applies whenever a debtor has assets or creditors in more than one member state. It sets out provisions in relation to jurisdiction, recognition, applicable law and the coordination of insolvency proceedings opened in several member states.
We are delighted to present the CMS guide to Restructuring, Insolvency and Distressed Debt Trading.
ICMA’s European Repo Council has responded to the Commission's consultation on CSDs. Its main concerns focus on:
In the European Union, Stat e interventions in the market in the form of subsidies or other economic advantages are generally prohibited, but companies can receive aid from Member States if the aid is approved by the European Commission.
The global crisis and the rights of foreign creditors of Sovereign States
The global financial crisis has been well documented in the press, with one recent headline in The Times reading “Like Iceland, Ireland can refuse to pay up”. Claims that States face bankruptcy not unnaturally raise the alarm bells for the financial markets. Can States be sued if they default in payment? RPC recently enforced a claim against assets of an EU State, as discussed below...
Bankrupt States: A misnomer