Nearly a year ago, the Italian Parliament passed Law 155/2017 giving the Government twelve months to adopt a root and branch reform of the rules governing business distress and insolvency procedures, taking into account European legislation (EU Regulation 2015/848, Commission Recommendation 2014/135) and the principles of the United Nations Commission on International Trade Law.  On 11 October 2018 the Italian Government issued the long-awaited draft of the legislative decree establishing the new Code for Distress and Insolvency (Codice della crisi d’impresa e dell’insovenza, the “New Code“).

The demise of insolvency?

At the heart of the New Code is the concept that the notion of “bankruptcy” (fallimento) is a thing of the past, to be replaced by “judicial liquidation” (liquidazione giudiziale), which becomes the last resort, available only when the debtor has failed to propose any other suitable solution. Seeking to ensure the best interest and satisfaction of creditors, the New Code prioritises procedures aimed at overcoming the crisis by keeping the business as a going concern (even if under new ownership).

Continue Reading Business Restructuring and Insolvency in Italy – a revolution in the making?

Substantial reforms to Regulation (EC) 1346/2000 on insolvency proceedings were made under Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the “Recast Insolvency Regulation“).  The Recast Insolvency Regulation applies to insolvency proceedings commenced on or after 26 June 2017.   Following changes to the insolvency laws in a number of Member States, the European Commission has adopted new Annexes A and B, which contain the details of the insolvency proceedings and insolvency practitioners falling within the scope of the Recast Insolvency Regulation. Continue Reading Adoption of new Annexes A and B to the Recast Insolvency Regulation

The European regulation of 20 May 2015 on insolvency proceedings (the “Insolvency Regulation”) came into force a year ago, significantly modifying European insolvency law. An ordinance published in November 2017 started the process of adapting French law to reflect the requirements of the Insolvency Regulation. A decree of 5 June 2018 (the “Decree”) modifying the regulatory part of Book VI of the French Code de Commerce is the final piece in the jigsaw.

Continue Reading Next steps for French insolvency proceedings

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

The Singapore Companies Act (Amendment) Act 2017 (the ”Act”) significantly overhauls Singapore’s corporate rescue and restructuring framework. In doing so, Singapore has adopted a number of key features from Chapter 11 of the US Bankruptcy Code.  This client alert highlights the main amendments of the Act that corporate debtors, lenders and distressed investors should be aware of.  In particular the Act now provides: 

1. better accessibility to Singapore’s corporate rescue and restructuring framework for foreign companies;

2. US Chapter 11 style rescue/DIP financing;

3. enhanced moratoriums with extra territorial effect;

4. increased disclosure, cram-downs and prepacks; and

5. for the adoption of UNCITRAL Model Law. 

There is no doubt that the introduction of this Act greatly improves the legal framework for debt restructurings in Singapore. We envisage that this Act will put Singapore firmly on the map as a key centre for international debt restructurings providing debtors, lenders, alternative capital providers and distressed investors access to internationally recognised and highly familiar restructuring tools and techniques.  The amendments discussed in this client alert came into effect on 23 May 2017.  Read our alert, Singapore Insolvency and Restructuring Reforms

 

Over the past several years, the international financial community has witnessed a significant increase in cross-border restructurings of Chinese companies. These restructurings have involved large enterprises with billions of dollars of revenues and indebtedness. The increase in cross-border financings, and therefore restructurings, is tied to the huge debts that Chinese companies, banks and municipalities have been accumulating since the financial crisis of 2008-2009. As central banks have held interest rates at record lows and bought up government debt to stabilize the financial system, investors have increasingly turned to corporate debt issued in emerging markets as a source of higher returns. Chinese companies have capitalized on this appetite for foreign investment and have borrowed $377bn from 2010 to 2014, according to the Bank for International Settlements.

A new wave of foreign investment seems just over the horizon. A regulatory shift was promulgated by the People’s Republic of China’s National Development and Reform Commission (NDRC) circular on administration and filing of foreign debt, which came into effect on 14 September 2015. The NDRC rule is just the most recent in a series of changes that China’s regime has gone through over the last two years that facilitate cross-border Chinese financing and investment.

Continue Reading Restructuring foreign investments in Chinese companies

Rather surprisingly on 16 February 2017 the German Parliament finally executed a long discussed reform of the German insolvency code aimed to soften the law on voidable transactions. The law now needs to pass the federal council (Bundesrat) before it can become effective.  Continue reading

On 28 November 2016 the European Commission (the Commission) issued a proposal (the Proposal) for a Regulation on a framework for the recovery and resolution of central counterparties (CCPs).

According to the Commission’s factsheet issued at the same time as the Proposal, CCPs increase stability in financial markets and are critical in helping reduce risks in the wider economy.  The recovery and resolution framework put forward in the Proposal will reduce the risk of a CCP failing, ensure the continuation of a failing CCP’s critical functions and provide national resolution authorities with tools for the resolution of a failing CCP.  This will help maintain financial stability, reduce the risk of contagion to other parts of the financial markets and prevent the cost of any resolution being borne by taxpayers.

Continue Reading (Financial) Safety First – proposal for an EU Regulation on the recovery and resolution of CCPs

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

Significant innovations have been introduced in Italy by Law Decree no. 83 of 27 June 2015 (entitled Urgent Measures on Insolvency, Civil and Procedural Matters and the Organization and Functioning of Judicial Commissioners (the “Decree”).
The recently enacted provisions are the result of engagement between various institutions and organisations, with the noteworthy contribution of Ernesto Apuzzo, the partner leading the Business Restructuring and Insolvency practice at Hogan Lovells, who participated in the work of the organizing committee coordinated by the Italian Ministry of Economy for devising the several elements of the reform.  Continue reading