Before 1st October 2021, French law did not provide for the possibility to cram down shareholders, other than under Article L. 631-19-2 of the French Commercial Code, which sets conditions which are so stringent that it is not used in practice.

Directive 2019/2023 has let EU member states decide whether shareholders should be a class of “affected parties” subject to cross-class cram down or whether other measures should be implemented to avoid shareholders preventing, or making it difficult, in an unreasonable manner, the approval of a restructuring plan.

There has been much debate in recent years around the use made of certain UK restructuring tools – the company voluntary arrangement and, more recently, the new restructuring plan – to restructure commercial property leases. Commercial tenants argue that compromise is necessary to address high fixed costs that are no longer sustainable, but landlords have often been critical of the approach taken. This debate has become more acute in the context of the pandemic, as many High Street businesses subject to mandatory closure have built up significant rent arrears that need to be addressed.

Over the last 12 months, global markets have been amazingly resilient, indeed even buoyant, aided in large part by governments around Europe and the world providing seemingly unlimited funding and extensive financial stabilisation measures, such as quantitative easing.

This, coupled with protective legislation for companies to prevent insolvency filings and to ensure continued trading – for example, moratoriums, relaxations on insolvency filing obligations and restrictions on creditor actions – has given businesses significant breathing space and prevented widespread failures.

Covid-19 has had a staggering impact on the U.S. economy in just eight months. Businesses large and small are struggling to stay afloat, with over 3,600 Chapter 11 bankruptcy filings in the first half of the year.[i] By the third quarter of 2020, the number of Chapter 11 bankruptcies of companies with assets over $1 billion had doubled from the same period in 2019[ii] and the U.S. GDP had fallen 2.4%.[iii] Given the uncertainty surrounding the pandemic, economists predict that a full economic recovery is likely to take years.[iv]

We reported in our previous blog published on 15 June 2020 (“The Corporate Insolvency and Governance Bill – a pensions perspective”) that a number of pensions concerns had been raised about the Corporate Insolvency and Governance Bill (the Bill). As a result, the Bill was subject to significant amendment and debate from a pensions perspective in the House of Lords.

The COVID-19 pandemic has wreaked havoc on the global economy. The equity markets, the travel and tourism industry, and retail establishments of all stripes have been hit hard. In addition to manufacturing, shipping, and other operational and supply chain disruptions, companies will need to address their borrowing requirements. Likewise, lenders, bondholders and alternative capital providers will need to consider what their rights and obligations are under their financing documents.

Over the Bank holiday weekend, the UK government announced that it intends to introduce new legislation to implement certain measures (detailed below) as soon as parliamentary time permits.

Court holds that distributions made pursuant to priority payment provisions contained in CDO transactions are protected by Section 560 of the Bankruptcy Code

District Court decides that in a broker-dealer liquidation governed by SIPA, where a trustee seeks to recover funds paid to the defendant under Sections 548(a) and 550(a) of the Bankruptcy Code, which impose liability for fraudulent conveyances where the defendant lacked good faith in receiving the funds: (i) the defendant’s good faith is evaluated under a subjective willful blindness standard, and (ii) to survive a motion to dismiss, the trustee bringing the fraudulent conveyance claims must plead facts sufficient to establish the defendant’s lack of good faith.

Welcome to our guide for directors and prospective directors of subsidiary companies in Austria.