Hogan Lovells’ London restructuring team led by partner Alex Kay has acted as lead transaction counsel and advisor to the ad hoc committee of Noteholders in the successful, landmark US$1 billion restructuring of Mriya Ago, the Ukrainian agricultural conglomerate.

Completion of the restructuring is the culmination of a multiyear process which has resulted in the first example of creditors taking control of a Ukrainian corporate. Continue Reading Successful completion of financial and corporate restructuring of Mriya Agro

Hogan Lovells’ London restructuring team led by partner Tom Astle assisted our clients, lenders of a €1.06bn priority funding loan, with distressed Croatian retail giant Agrokor’s proposed restructuring settlement plan which was voted for unanimously at a meeting of key creditors in Zagreb this week on 19 June 2018.

Having an agreed settlement plan is a breakthrough stage in the process and paves the way for one of the biggest restructurings in the world so far this year. The settlement plan will now be put to the wider creditor vote, requiring 66⅔ by value to approve, before being submitted to the Commercial Court of Zagreb for approval prior to 10 July 2018.

Continue Reading Distressed Croatian retail giant Agrokor d.d moves step closer to restructuring

New York Bankruptcy Judge Sean H. Lane determined that the Australian debtors in a Chapter 15 foreign recognition proceeding satisfied the U.S. property requirements of Section 109(a) of the Bankruptcy Code on the basis of attorney retainers and claims against insiders located in the U.S.

Continue Reading Chapter 15 foreign recognition granted on the basis of attorney retainer and claims against insiders located in the United States

Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Recast Insolvency Regulation“) applies to insolvency proceedings opened after 26 June 2017. Ordinance of 2 November 2017 (the “Ordinance“) amended the French Code de commerce to reflect the Recast Insolvency Regulation by inserting a new Title IX into Book VI. Continue Reading Insolvency Proceedings: ordinance adapting the French Code de commerce to the EU Regulation of May 2015 on insolvency proceedings

 

In January 2018 the English High Court considered whether it had jurisdiction under the Cross-Border Insolvency Regulations 2006 (CBIR) to extend a temporary stay on the commencement of enforcement action in respect of English law debt obligations owed by a foreign debtor so that in effect the stay became permanent, or whether such a permanent stay would breach the long established rule in Gibbs[1](which provides that the discharge of an English law governed debt under the insolvency laws of a foreign jurisdiction outside of England and Wales is not a valid discharge of such debt).  Ultimately, the court found that ordering a permanent stay would substantively affect the creditors’ rights and amount to a discharge of the English debts, in breach of the rule in Gibbs, and that the CBIR could not be used to modify that rule.

[1] Antony Gibbs & Sons v La Societe Industrielle et Commerciale des Mataux (1890) 25 QBD 399 Continue Reading “Stayin’ Alive” – English Court confirms CBIR doesn’t override the rule in Gibbs

On 8 February 2018, the Hong Kong Court of First Instance (the “Hong Kong Court“) ruled in Re Supreme Tycoon Limited [2018] HKCFI 277 that the common law power to recognise and assist foreign insolvency proceedings extends to voluntary liquidations. This is the first authority on this issue in Hong Kong. Continue Reading Hong Kong Court confirms common law recognition and assistance for foreign voluntary liquidations

On 9 November 2017, in a rare example of a contested recognition hearing, His Honour Judge Paul Matthews granted recognition of Agrokor’s extraordinary administration (EA) as a foreign main proceeding under the Cross-Border Insolvency Regulations 2006 (CBIR).

Agrokor d.d. is the holding company for a group of companies specialising in agriculture, food production and related activities in Croatia.  Before its financial difficulties, the group’s annual revenue was estimated to amount to around 15% of Croatia’s GDP.  On 6 April 2017, the Law on Extraordinary Administration Proceeding of Companies of Systemic Importance for the Republic of Croatia (the Law, also known as Lex Agrokor) became effective.  On 10 April 2017, following an application by Agrokor, an order for extraordinary administration (EA) was made in respect of Agrokor itself and 50 of its affiliates. In July 2017, Agrokor applied to the English court for recognition of the EA as a foreign proceeding under the CBIR.  A proceeding will be a foreign proceeding if it is “…a collective judicial or administrative proceeding in a foreign State…pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation”  The recognition application was challenged by one of Agrokor’s largest creditors, who had also brought arbitration proceedings in the English courts, on a number of grounds, all of which were dismissed by the court.

A Hogan Lovells team led by partner Tom Astle is acting for an adhoc committee of bondholders, and providers of a c€1bn super senior DIP facility to the Agrokor Group.

Continue Reading English recognition for Agrokor insolvency: not a tick-box exercise

In our previous blog post, we examined the decision of the New South Wales Court of Appeal to uphold the composition of classes of creditors in the Boart Longyear restructuring by way of scheme of arrangement.

Following an extensive second court hearing to approve the schemes of arrangement (which involved multiple days of hearings, several adjournments, and a court-ordered mediation), amended versions of the Boart Longyear schemes have now been approved by the Australian courts.

The decision emphasises the importance of the court’s overall “fairness” discretion in approving a scheme, irrespective of whether classes of creditors have been properly constituted. Importantly, differential treatment within a class of creditors that may not be sufficient to justify the creation of a separate class may nonetheless create sufficient unfairness to cause the scheme to ultimately fail. Significantly, the court was clear in its final judgment that the schemes as initially drafted would not have passed the “fairness” test and would have been rejected.

Continue Reading Update – Boart Longyear schemes of arrangement approved

This article first appeared in Without Prejudice in August 2017

What can the UK and South Africa learn from each other by comparing the business rescue regime with administration?

South Africa’s relatively recent business rescue regime (introduced in 2011) has exploded into a popular process for “affected persons” facing a company in financial distress. It shares some aspects with the administration procedure in England and Wales (UK). Lessons can be drawn from both the similarities and the differences between the two procedures that may benefit restructuring and insolvency practitioners both in the UK and South Africa.  Continue reading.

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