Hogan Lovells business restructuring and insolvency practice partners Ron Silverman, Robin Keller, and Shaun Langhorne recently joined Debtwire senior legal content specialist Richard Goldman to discuss some “game-changing” revisions to Singapore’s insolvency regime. During the discussion, the panel addresses how Singapore, in an effort to market itself as an international forum for debt restructurings, transformed its restructuring laws from a creditor-based tool premised on English insolvency statutes into a debtor-friendly system more akin to Chapter 11 of the U.S. Bankruptcy Code. The panel also breaks down some key concepts that, while common to U.S. restructurings, were completely foreign to Singapore insolvency proceedings, including automatic moratoriums against creditor self-help, postpetition DIP or rescue financing, cramdown availability, and enhanced disclosure requirements. Finally, the panel provides notable considerations that practitioners and investors should take into account when navigating this yet-to-be tested regime.
These days, the threat of counterparty insolvency looms over the energy sector: whether it is a natural disaster or precipitous decline in the price of oil, perhaps no industry is more susceptible to the financial decline and potential default of contracting parties. Continue Reading Energy disputes: Countering counterparty insolvency
The Singapore parliament recently passed a bill bringing in U.S. Chapter 11-inspired changes to its debt-restructuring framework, including provisions allowing (i) courts to approve financing with priority ahead of existing senior secured facilities; (ii) courts to approve a scheme even if there are dissenting creditor classes; and (iii) international assistance proceedings.
These provisions borrow heavily from the existing provisions in the U.S. Bankruptcy Code.
In light of these changes and the impact on future restructurings, we hosted a webinar on the current and coming use of U.S. Chapter 11 and Chapter 15 proceedings in Asian restructurings.
Some of the topics discussed included:
- Why Asian debtors might look to a Chapter 11 solution over other procedures such as Schemes of Arrangements;
- How the equivalent provisions in the U.S. Bankruptcy Code are applied and the key concepts parties will need to be familiar with; and
- The likely need for U.S. counsel to provide expert testimony in Singapore proceedings regarding the application and interpretation of the new U.S.-based provisions.
Brazilian Chapter 15s (PART II)
Although almost every chapter 15 case is filed at least in part to take advantage of the automatic stay to protect property located in the U.S., some cases are filed both to protect U.S. assets and prevent lawsuits from specific creditors.
Brazilian Chapter 15s (PART I)
Brazilian insolvencies have increased in recent years as a result of the economic recession, political instability, and corruption. Nine Brazilian debtors filed chapter 15 petitions in 2014 and 2015 combined compared with only nine in total prior to 2014. Below are examples of how Brazilian debtors have used chapter 15 as a way to effectuate their overall restructuring.
Berau Capital Resources Pte Ltd (“Berau”), a special purpose vehicle incorporated to raise funds on behalf of an Indonesian mining and coal company, initiated proceedings in the High Court of the Republic of Singapore pursuant to section 210(10) of the Companies Act on July 4, 2015.
On July 10, 2015, Berau filed a petition for recognition of the Singapore proceeding in the Bankruptcy Court for the Southern District of New York (the “New York Bankruptcy Court”) under Chapter 15 of the Bankruptcy Code. In a decision makes it more likely that foreign companies with New York law governed securities will be able to utilize Chapter 15 even if they otherwise have no U.S. connections, the New York Bankruptcy Court granted recognition to Berau’s Singapore proceeding and held that not only had Berau satisfied Bankruptcy Code section 109(a) because it had established an attorney retainer account in New York, but that Berau’s indenture governed by New York law and containing a New York choice of forum clause constituted Berau’s property in New York that also satisfied Bankruptcy Code section 109(a). Continue reading