This past Saturday, October 11, 2014, marked an important day in the too-big-too-fail regulatory and industry initiative. The International Swaps and Derivatives Association, Inc. (ISDA) announced on Saturday that 18 major global banks (G-18) have agreed to sign a new ISDA Resolution Stay Protocol, developed in coordination with the Financial Stability Board, to support cross-border resolution and reduce systemic risk.
Given the current worldwide economic climate, the number of companies facing insolvency that have assets in multiple jurisdictions around the world has increased dramatically. It is not unusual in today’s global economy for a corporation to have commercial offices, production plants and/ or research facilities in many different countries. A company that is faced with the bleak picture of insolvency may be forced to make decisions on whether to seek protection under a number of different statutory structures.
From modest beginnings, the concept of Cross-Border Insolvency Protocols as a means of enhancing cooperation between administrations in international cases has become an established practice in major cases. From their origins in the International Bar Association’s Cross-Border Insolvency Concordat through the early Protocols in Maxwell Communication and Everfresh Beverages, Protocols have become a mainstay in international reorganizations and restructurings.
The Ninth Circuit Bankruptcy Appellate Panel has held that a bankruptcy trustee appointed in a non-U.S. bankruptcy case did not need authority from a U.S. court to take possession and control of a foreign debtor’s assets located in the United States, and transfer them.
A U.S. Bankruptcy Court (the “Bankruptcy Court”) recently enjoined a Hong Kong-based investor from exercising its shareholder purchase rights in an Asian joint venture.[1] The Bankruptcy Court’s order also prevents the investor from proceeding with litigation to enforce its rights in a Hong Kong court. Neither of the joint venture partners, or the joint venture itself, are debtors in a domestic or foreign insolvency proceeding. Nevertheless, the Bankruptcy Court ruled that injunctive relief was warranted because the investor’s actions were disrupting a sale process for the U.S.
The Reserve Bank of India (“RBI”) has issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“New Framework”) on June 07, 2019[1] in which the RBI has continued the core principles of its circular dated February 12, 2018 (“February 12 Circular”) and has added provisions encouraging both informal and formal restructuring in India.
Prime Minister Narendra Modi, elected in May 2014, will turn the corner again in May 2019 as he completes his first five year term. We visit some of the recent developments in his government’s legal and tax policies that have potentially mended a broken administrative process from the previous administration.
Last week we alerted clients to the need for a rapid assessment of their exposure to Satyam in the wake of the much-publicized acknowledgement of fraud and mis-reporting of financial results by the company’s founder and former Chairman.
About a year ago, I completed the most exhausting marathon of my life serving as the chief lawyer during the cross-border restructuring and chapter 11 of Waypoint Leasing, an Ireland-based helicopter leasing company. I joined Waypoint Leasing shortly after it started operations in the newly formed helicopter leasing industry. After the first few years of meteoric growth, the collapse in oil & gas prices hit the helicopter industry hard. We soon found ourselves dealing with bankrupt customers and eventually reached the brink of financial distress ourselves.
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