In the recent case of Kevin Taylor v Van Dutch Marine Holding Ltd and others, the UK High Court decided that the exercise of existing rights by a secured creditor should not be regarded as a disposal by a defendant, and as a result, enforcement by a secured creditor is not an infringement of a freezing order. The High Court also clarified that it is not necessary for a secured creditor to bring an application for variation of the freezing order.

Continue Reading Secured creditors are not left out in the cold

On 13 July 2017 the High Court gave its judgment in UBS AG, London Branch v. GLAS Trust Corporation Limited [2017] EWHC 1788 (Comm), a case brought by UBS against the trustee for notes issued as part of a securitisation transaction by Fairhold Securitisation Limited (the “Issuer“). UBS disputed the ability of the trustee to absorb costs incurred by a group of noteholders pursuing a potential restructuring of the debt. The case will be of interest to trustees, investors and other stakeholders involved in the restructuring of finance transactions involving a trustee. The case provides some useful guidance on the test to be applied in determining whether expenses of a trustee have been “properly incurred“. Continue Reading Paying for a debt restructuring – can costs be adopted by the Trustee?

This article first appeared in the Summer 2017 edition of Recovery Magazine and is published here with their kind permission.

The Companies Act scheme of arrangement – now set out in part 26 of the Companies Act 2006 (CA 2006), has come a long way.  Long gone are the times when schemes of arrangement – never an Insolvency Act process – were merely seen as tools for implementing solvent reorganisations. Schemes of arrangement are nowadays one of the most favoured means for rescheduling, reorganising or otherwise compromising the liability of companies to their creditors in complex multijurisdictional restructurings.

English schemes are popular because of the breadth and flexibility of the legislative provisions and their low jurisdictional threshold. Additionally, the courts take a robust and pragmatic approach to the proponents and opponents of the part 26 process. This article summarises four examples of that pragmatism in action.  Click here to read the full article.

 

In order to promote a “rescue culture”, the Transfer of Undertakings (Protection of Employment) Regulations 2006 – better known as TUPE –  says that where the transferring business is the subject of bankruptcy or insolvency proceedings instituted “with a view to the liquidation of the assets of the transferor”, the employees will not transfer and any dismissals connected with the transfer are not automatically unfair.

The wording of this insolvency exemption is contained in the European Acquired Rights Directive from which TUPE is derived. In Federatie Nederlandse Vakvereniging v Smallsteps BV the European Court was asked to decide if a pre-pack sale – designed to prepare the business transfer in advance so as to allow a swift re-launch once the insolvency had been declared – fell within this exemption.  The decision was published on 22 June, click here to read our note on the case.

Considerations when Changing the Trustee on a Debt Transaction

In recent times there has been an increase in instances of trustees being changed on debt deals. As this phenomenon becomes more widespread, we look at some of the issues and processes that need to be taken into account when issuers, investors or trustees themselves are considering making a change. Continue reading

Across Europe, increased regulation, governmental reforms, higher capital requirements and new accounting standards on valuing non-performing loans (“NPLs”) continue to drive sales of non-core loan assets, including NPLs. That background, coupled with the fact that many investors across Europe have raised capital in order to acquire loan portfolios which now needs to be deployed, is likely to drive further transactions (as well as those in new markets and in relation to more complex asset classes).

The last half of 2016 saw considerable activity in Southern Europe in particular which is likely to continue in 2017 and spread to other jurisdictions in Europe. Equally, the rising trend in NPLs in South-East Asia indicates that deleveraging is likely to become more prevalent there as well in the short to medium term.

Our cross-group team has taken an in depth look at the market, brought together in a report on loan portfolio transactions and their related financings. The report highlights potential structuring and execution techniques and explains key initial considerations for potential investors in a number of key jurisdictions.  Click here for our Client note on loan portfolio transactions or alternatively click here to go to our interactive microsite where you can view country-specific analysis for the jurisdictions covered in our report.

In the English case Lehman Brothers International (Europe) v Exxonmobil Financial Services BV [2016] EWHC 2699 (Comm), the High Court considered the meaning of “close of business” for a commercial bank in London.  In a decision which demonstrates that where certainty is desired in commercial contracts, parties should specify a definite deadline and avoid ambiguous phrases such as ‘close of business’, the Court held that 7pm could be “close of business”.  Continue reading

On 22 November 2016 the EU Commission issued a proposal for an EU directive on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures across EU Member States.

The consultation follows on from the EU’s recommendations in 2014 and its consultation earlier in 2016, and forms part of the EU’s Capital Markets Union plan.. If adopted, the Directive will for the first time harmonise certain substantive aspects of Member States’ restructuring and insolvency laws and will have a significant impact on national insolvency regimes.

Continue Reading “Rescue Me” – New restructuring proceedings ahead for EU Member States

The Copenhagen Re case was an application to the Court to sanction a scheme for the transfer of insurance business pursuant to Part VII Financial Services and Markets Act 2000. In the main, Snowden, J’s ruling is a restatement of the well-recognised grounds upon which the Court will exercise its discretion to sanction a transfer scheme. The ruling nevertheless goes further, in that it is the first occasion where the Court has had to consider how to deal with the effect of a transfer scheme upon guarantees given by the transferor’s parent company in respect of policies written through the Institute of London Underwriters. Snowden, J held that he had the power under Section 112(1)(d) FSMA 2000 to modify the guarantees given to the ILU by Copenhagen Re’s parent.  The effect of the modification was that the original guarantee remained in place but on terms that the guaranteed obligations were modified by the court to become those of the transferee under the scheme, Marlon Insurance Company Limited.  Continue reading