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Tightening trade restrictions and concerns swirling around intellectual property rights are creating new risks for conglomerates faced with financial stress, especially when it comes to selling their assets. Continue Reading New trade and legal policy rules affecting conglomerates can impact restructurings

The Pension Schemes Bill [HL] 2019-20 (Bill) was re-introduced before Parliament on 7 January 2020. Among its proposed amendments to the Pensions Act 2004 (Act) are new criminal  offences for failing to comply with a contribution notice, avoiding employer debt, conduct risking accrued scheme benefits, an expansion of the moral hazard powers and an extension of the ‘notifiable events’ framework. The Government’s stated intention is to “ensure that those who put pension schemes in jeopardy feel the full force of the law“.  Unfortunately, scope of the amendments is such that if enacted without amendment, they are very likely to deter responsible directors from attempting to restructure financially distressed employers facing significant exposure to defined benefit pension scheme liabilities. Continue Reading Rocking the boat – Pension Schemes Bill proposals may risk destabilising future restructurings

Almost a decade into the current bull market, many economic prognosticators are warning of a coming downturn. At the same time, political upheaval and uncertainty around the world is changing the landscape for cross-border trade—including mergers and acquisitions activity. Hogan Lovells partners Richard L. Wynne and David A. Gibbons recently discussed how that macro environment is impacting distressed M&A today, and what steps business leaders and dealmakers should be taking to prepare for a shift in the economic winds. Continue Reading Thinking ahead: Distressed M&A in uncertain times

Just in time for Chinese New Year, a Hong Kong court has taken a major step forward in the developing law on cross-border insolvency by recognising a mainland Chinese liquidation for the first time. In Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167, Mr Justice Harris granted recognition and assistance to mainland administrators in Hong Kong so they could perform their functions and protect assets held in Hong Kong from enforcement.

He also declined to follow English precedent dating back more than a century by granting a stay on creditor proceedings in Hong Kong, reasoning that it was in line with modern thinking and practice in cross-border insolvency that a debtor’s assets should be distributed as part of a single proceeding, as per the pari passu principle. Continue Reading A welcome red packet – Hong Kong court recognises mainland Chinese administrators for first time

Germany has notoriously broad voidability laws. As a rule of thumb, any payment by a third party has high voidability risks if the third party has no obligation to make the payment under the contract. Such payments qualify as incongruent (3 months hardening period, very few further requirements) and often qualify as gratuitous (4 years hardening period, without any further requirements). A recent decision of the German High Court has stirred hope that the Court may give some leeway to cash pool payments by group companies. However, on a closer look at the decision, it becomes clear that the boundaries for an exemption from voidability were set very narrowly.

Comment on the German High Court decision dated 12. September 2019 (file no.: IX ZR 16/18) by Christine Borries, LL.M. (Sydney) and Dr. Markus Huber, lawyers of the German Hogan Lovells insolvency and restructuring practice. Continue Reading German insolvency law: Group payments (sometimes maybe) not per se voidable?

With thanks to Anton Korobeynikov of Sayenko Kharenko for his contribution to this article

On 25 September 2019, the Ukrainian Parliament brought into force law No. 112-IX (the “Law“). The purpose of the Law is to correct deficiencies in existing legislation and further promote out-of-court financial restructurings in the jurisdiction. The adoption of the Law comes in light of the high volume of non-performing loans which still exist in Ukraine. Continue Reading A further step taken by Ukraine to simplify out of court loan workouts

In a recent decision, the Ontario Superior Court of Justice recognised the English law schemes of arrangement of the Syncreon group under the Companies’ Creditors Arrangement Act, RSC 1985, c C-36 (“CCAA“). This was the first time a Canadian court was asked to determine whether proceedings under Part 26 of the Companies Act 2006 (the “Companies Act“) could be recognised as “foreign proceedings” under Part IV of the CCAA. The schemes, which included third party releases in favour of the Canadian operating entity of the Syncreon group, were given full force and effect in Canada.   Continue Reading First English Scheme of Arrangement Recognised in Canada under the CCAA