The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 has been signed into law. The text of the Act remains unchanged from when we published a briefing on the Bill in December here.
At A Glance
Insurers with unwanted runoff blocks of business should consider the latest guidance from insurance regulators on potential transactional structures that could mitigate this issue.
Introduction
Keepwell deeds have been commonly used in financing arrangements entered into by business groups in Mainland China and foreign lenders because of the former limitation on repatriating proceeds raised overseas by Mainland companies, which had necessitated the use of foreign subsidiaries and a security structure.
Borrower beware: in times of distress, your credit documents may give your secured lenders an opportunity to “flip” control of your board
Distress happens, even at companies that once appeared financially solid. When it does, the company, its board (which may be controlled by a sponsor in a public or private equity scenario), and its lenders often enter into restructuring discussions in search of a consensual path forward, typically under the terms of a forbearance agreement.
Case: Darty Holdings SAS v Geoffrey Carton-Kelly (as additional liquidator of CGL Realisations Limited) [2023] EWCA Civ 1135
A Hong Kong court has refused to sanction a scheme of arrangement, saying that practitioners should explain the key terms and effect of any proposed restructuring in a way which can be easily understood by the creditors and the court.
In Re Sino Oiland Gas Holdings Ltd [2024] HKCFI 1135, the Honourable Madam Justice Linda Chan refused to sanction a scheme of arrangement, saying that creditors had been given insufficient information about the restructuring and the scheme that would enable them to make an informed decision at the scheme meeting.
Since the pandemic, during which insolvency rates were low due to Government measures, there has been a considerable rise in insolvencies in the UK and many other jurisdictions. High interest rates have significantly increased the cost of borrowing and many companies are saddled with mountains of debt that was taken out in better times and which are now difficult to repay. In addition, high inflation and energy costs, lower consumer confidence and volatile supply chains have all contributed to making the last few years very difficult for businesses.
Domestic Procedures
Domestic Procedures
Banned! Fraudsters!– Terms used by the Insolvency Service for directors who abused the government backed loan scheme which was put in place to help businesses struggling during the pandemic.