In May 2009, the Treasury published a discussion paper entitled Developing effective resolution arrangements for investment banks. In this discussion paper the Treasury set out its initial thinking on the steps necessary to improve the regime around the failure of investment firms.

The Supreme Court of Canada’s decision in (Re) Indalex has changed the landscape for both lenders and borrowers in Canada who sponsor registered defined benefit pension plans. For lenders, carefully drafted loan documentation and effective planning can enhance the protection of a secured lender’s position in the face of the broadened scope of a deemed trust applicable to a borrower’s defined benefit pension obligations.

Everyone loves a bargain – accordingly, there is a lot of interest when liquidators and other insolvency practitioners put a business up for sale. Purchasers jostle like shoppers in the Myer stocktake sale, trying to position themselves as the perfect purchaser. At the same time they try to convey their concern about the value of the business or assets – everyone expects a discount for a distressed business.

In the case of In the matter of Construction Confederation and In the matter of the Insolvency Act 1986 [2009] EWHC 3551 (Ch), the trustees of the Construction Confederation Staff Pension Scheme have obtained an order for winding up of the sponsoring employer, an unincorporated association.

The property industry has seen a dramatic decline in capital values over the last two years with peak to trough falls of approximately 44 per cent compared to a peak to trough decline of approximately 27 per cent during the recession of the early 1990s. This, together with the effect of the challenging economic climate, has led to a number of high profile insolvencies of property owners, developers and occupiers. Given the uncertain economic outlook, it is likely that these trends will continue.

What are the options for companies in financial difficulty in Taiwan?

If the company is listed on the Taiwan stock exchange, then the company may pursue a formal reorganisation as set forth under Article 282 of the Company Act.  

If a listed company (as referred to above) is unable to pursue reorganisation, and in respect of all other companies, a company will enter into a formal bankruptcy procedure under the Bankruptcy Act in order to implement an equitable and orderly repayment scheme amongst its creditors.  

The 4th session of the committee of governmental experts on Intermediated Securities met in May 2007 to continue negotiation of the draft Convention. The Convention deals primarily with the rights of account holders in relation to intermediated securities - securities held through financial intermediaries.

What might be the funding risk?

A member state exit is likely to result in increased liquidity problems and less available funding as financial institutions manage their exposure to the Eurozone. Businesses may find that traditional sources of finance (loans, bonds etc) are less easy to obtain or raise.

Intra group funding may also be problematic if there are intra-company loans to subsidiaries located in risk member states and those subsidiaries are having difficulty meeting their payment obligations under such loans.

In (Re) Indalex, the Supreme Court of Canada (SCC) affirmed the super-priority of the security granted to a debtor-in-possession (DIP) lender, over a deemed trust created under provincial pension legislation, in the context of a Companies’ Creditors Arrangement Act (CCAA) proceeding. The SCC’s analysis leaves open further issues.

Shareholder claims and corporate bankruptcies are on the rise.