UK Restructuring

A YEAR IN RETROSPECT UKEmployment Restructuring SectionContent Header

Contents

Introduction Birmingham London

Manchester Yorkshire UK team

2 UK Restructuring Introduction

Introduction

Robert Russell 2020; a year of change and challenge, a year of UK Head of Restructuring growth for DLA Piper’s UK Restructuring Team. +44 (0)161 235 4147 It was an incredibly busy year. It was challenging in so many ways, but [email protected] at DLA Piper we ended in a position of strength as the largest specialist Restructuring team in the UK. At partner level we welcomed David Manson from Paul Hastings, James Davison from Addleshaw Goddard, legal directors Sarah Archer and Pippa Hill joined us from Jones Day and Gowlings respectively along with Senior Associate Phil Povey from Paul Hastings. In September five newly qualified lawyers joined the practice as we continue to invest in our future talent and with a strong pipeline of mandates, we will continue to grow to support our clients in these uncertain times. Across retail, casual dining, manufacturing, travel, aviation, and healthcare we executed market leading mandates delivering outstanding outcomes for key stakeholders. We hope that this document gives you a flavour of the year we had. We look forward to supporting you in 2021.

Best wishes, Rob

3 UK Restructuring SectionBirmingham Header

Birmingham

Overview food-to-go products based in the East Midlands and the acquisition of the Key contact 2020 marked a continued evolution of the Birmingham Restructuring Team. Urban Eat brand has provided Samworth Brothers Limited with the means to The team was bolstered by the promotion of Deborah Brown to Legal Director develop that proposition further. Huw Dolphin and the recruitment of home-grown talent in the form of Jatin Lodhia, a former Partner Restructuring trainee into the team in September. The team also continues The multi-million-pound deal for the Urban Eat brand focussed mainly on the UK +44 121 262 5970 to be supported by experienced Associate, Aino Vuorio who completed a intellectual property connected to the brand. Following completion of the [email protected] successful secondment to HSBC’s Legal Team. transaction, the Urban Eat brand has celebrated its 10 year anniversary and has become cemented into the Samworth Brothers Fresh Food for Now offer, which We continue to service our well established client base internally and manufactures and supplies market leading names in the food-to-go market. externally and won some key mandates as a result. These included advising the senior lender on the administration of numerous companies in the Separately from the Urban Eat brand acquisition, the team was subsequently Deltic Group. We also acted on several restructuring assignments in sectors retained in June to assist with the acquisition of selected high value plant and experiencing distress as a result of the COVID-19 pandemic and adverse machinery from the Adelie Food Group’s site in Southall. This investment would global trading conditions such as food manufacturing, hospitality and enable Samworth Brothers Limited to enhance its production facilities at its leisure and manufacturing. existing sites in order to drive production capacity.

Articles and thought leadership HOSPITALITY AND LEISURE Corporate Insolvency and Governance Act 2020 – Considerations for Suppliers The team was instructed by a clearing bank which was the principal lender to of Goods and Services a key customer operating within the late-night leisure sector. Deltic Group was the UK’s largest nightclub operator running 52 bars and nightclubs across the Advising Samworth Brothers on brand acquisition UK. The business was one of the hardest hit by the introduction of government measures in March to control the coronavirus pandemic, including the enforced Matter highlights closure of the majority of its sites during 2020.

CONSUMER GOODS, FOOD AND RETAIL In December 2020, the directors of the Deltic Group appointed administrators The team, led by Huw Dolphin, was initially instructed by Samworth Brothers over a number of the Deltic Group companies and the team acted for the bank Limited to advise and assist with the acquisition of the Urban Eat brand from in connection with facilitating the disposal of the majority of the operator’s bars the Adelie Food Group and its appointed administrators (Deloitte) in May this and clubs, saving around 1,300 jobs. year. Samworth Brothers Limited is one of the UK’s largest suppliers of

4 UK Restructuring Birmingham

This deal represented a positive outcome for the business and its employees, MEDIA, SPORT AND ENTERTAINMENT film and TV productions. The client has required advice to the board on how given the buyer’s commitment to the sector and the safeguarding of long-term We have acted throughout the pandemic for a client dramatically affected business should be conducted during periods of great uncertainty, a review of prospects for employees. by a major downturn in business activity, both domestically and worldwide. various subsidiary businesses and subsequently using insolvency regimes to Our client supplies equipment and expertise to events, exhibitions and restructure and streamline the group. UK Restructuring London

London

Overview COVID-19 UK: What next for distressed companies and their stakeholders? Key contact 2020 was about growth for the London Restructuring Team. In anticipation of increased distress in our market, we committed to building our existing five Partner UK Corporate Insolvency and Governance Act: Temporary restrictions on Chris Parker and twenty fee earner team with a series of hires. Whilst COVID-19 delivered that winding-up petitions and statutory demands London Head of Restructuring distress it’s fair to say it looked a little different than we anticipated. +44 20 7153 7402 Matter highlights [email protected] In January we strengthened the team with the recruitment of two new Legal HEALTHCARE Directors Pippa Hill and Sarah Archer (from Gowlings and Jones Day respectively). There were few bigger mandates than the administration of the former In the spring we bolstered our existing Special Situations team led by David Ampaw FTSE100 NMC Health Plc. Acting for the administrators since March, with the arrival of Partner David Manson and Senior Associate Philip Povey (from Chris Parker, together with Jonathan Richards and Peter Manley, led a team of Paul Hastings). In September former Restructuring trainees Natalie Peacock over 100 DLA Piper lawyers across multiple practice groups and jurisdictions and Ben Stafford qualified into the team. This leaves us as one of the largest in dealing with the collapse which followed allegations of a multi-billion dollar Restructuring teams in the city and consequently we have the capacity and fraud perpetrated against NMC. This included our US team obtaining Chapter experience to deliver on the largest of mandates. That experience and capacity has 15 recognition in Delaware, and the successful conclusion of a bespoke proved invaluable when paired with our deep sector expertise across the DLA Piper USD 25 million financing facility for the administration. platform, both in London and across the globe. We have worked with our highly rated sector teams, such as Healthcare, Aviation and Financial Services to deliver Aside from NMC we continue to work on the biggest healthcare mandates for on a series of high profile and complex cross border mandates. providers, regulators, governments and creditors. This includes names such as Four Seasons (Chris Parker and Pippa Hill) and BMI hospitals (David Ampaw). The International contentious Restructuring team have also been busy, as part of DLA Piper’s Law& strategy, assisting the development and launch of Aldersgate AVIATION Funding Limited, an entirely independent company which provides DLA Piper’s DLA Piper has long been well known and highly regarded in the aviation sector clients with access to GBP 150 million of committed capital for litigation and which allows us to bring that deep sector expertise to stressed and distressed arbitration claims. We are already seeing an increase in fraud and insolvency situations. Coming out of 2019, where we had leading roles on mandates such claims and would be delighted to speak to you in more detail about this. as the Bristow Group Restructuring (Chris Parker) and the Aviation Insolvency Review (Peter Manley), it was always going to be a busy year in this sector. Articles and thought leadership COVID-19 entirely exacerbated that situation. The New UK Restructuring Plan – The “Super Scheme”

Reintroduction of UK Crown Preference from 1 December 2020

6 UK Restructuring London

Particular highlights in this space include advising: FINANCIAL SERVICES RETAIL Much of what we do touches the financial services sector but noteworthy Chris Parker, James Davison and Rowan Aspinwall are advising John Menzies PLC in relation to the agreement and implementation of a revised mandates include advising: Gourmet Burger Kitchen and subsequently it’s administrators in the banking covenant structure between the Group and its lenders, which provided recent sale of the GBK restaurant business via an administration. additional flexibility to support the Group, as the aviation industry recovers UniCredit in relation to the successful restructuring and disposal of a distressed from the impact of the COVID-19 pandemic (Neil Riley). loan exposure face value over EUR 300 million, the bank’s largest single David Ampaw advised the administrators of FOREVER 21 UK Limited (F21) exposure. A cross jurisdictional team led by David Ampaw, supported by on the UK aspects of a global Chapter 11 restructuring, another example of On an appointment of receivers over a private aircraft owned by a Cayman Dietmar Schulz (Partner, Germany) and John Miliken, successfully structured a high street retailer struggling against rising competition from online rivals. registered company and the subsequent sale of the plane for circa. and negotiated a transaction which achieved full derecognition of the loan F21 was an originator of so called “fast fashion” and celebrity tie-ups but was USD 20 million (Tim Dawson and Sarah Archer). and swap exposure in the books of this global key client notwithstanding affected by its fixed costs in real estate and inability to keep up with trends. partial synthetic settlement. Frank Roth (Partner, Germany) also provided Multiple stakeholders/creditors including ground handlers, suppliers and crucial support given the nature of the asset infrastructure with a government Neil Riley and Pippa Hill acted for the administrators of a group engaged in airports in connection with the Thomas Cook Airlines insolvency. concession illustrating our global sector expertise in action. This is part of a retail and specialist firearms trading, in respect of sales of its subsidiaries and series of distressed trade transactions for UniCredit managed by David totalling business and assets. over half a billion Euro in the last year alone.

Staffline PLC in relation to the agreement and implementation of its refinancing with its lenders, which provided a platform to focus on their turnaround plan which includes margin improvement measures, cost reduction initiatives and working capital improvements (Neil Riley and Sarah Archer).

7 UK Restructuring Manchester

Manchester

Overview Matter highlights Key contacts 2020 began in a very busy fashion for the North West Restructuring team as RETAIL we were engaged in a number of expedited pre-pack administrations and A team led by Rob Russell advised Gordon Brothers Brands on the acquisition Robert Russell sizeable distressed refinancing transactions throughout January and February. of the Laura Ashley brand from its administrators PwC. Gordon Brothers’ Brands UK Head of Restructuring These deals closed just in time to see a COVID-19 related national lock-down division values, acquires, restructures, and invests globally in underleveraged, +44 161 235 4147 take effect in March and a flurry of new instructions land as companies and distressed, or dormant intellectual property to help revive and reimagine some of [email protected] stakeholders sought urgent specialist support across a diverse range of the world’s most iconic brands. sectors – all impacted to a greater or lesser extent by the unprecedented situation faced by the country. Chris Roberts The multi-million pound deal for the Laura Ashley Brand included the worldwide Partner intellectual property, the brand archive and all related materials and assets. This year saw the richly deserved promotions of Katy Seago to Legal +44 161 235 4265 As new owners of the brand, Gordon Brothers has placed a strong emphasis on Director and Rob Lyons to Senior Associate – a testament to their hard work, [email protected] building the brands e-commerce presence, developing more strategic wholesale commercial and technical expertise and ever increasing experience. relationships and expanding the portfolio of licensees and franchisees globally. Following completion of the transaction, Gordon Brothers with our support have Our market leading team has been bolstered and we approach 2021 with also managed to agree a strategic licence agreement with the retailer NEXT, determined confidence knowing it will likely prove busier than the last with to supply Laura Ashley branded homeware products throughout the UK. many businesses facing up to the financial challenges of recovering from the pandemic as government support measures tail off. The firm is retained by Gordon Brothers to continue to assist them with their brand development and enhancement strategy. Articles and thought leadership Key issues to consider when undertaking distressed M&A In addition, we are advising EY as administrators of Intu Merry Hill Limited and Deloitte as administrators of the Arcadia group of companies. UK Corporate Insolvency and Governance Act 2020

UK Corporate Insolvency And Governance Act 2020: Termination Clauses In Supply Contracts

What does the UK Corporate Insolvency and Governance Act 2020 mean for ABL?

8 UK Restructuring Manchester

PROFESSIONAL SERVICES MANUFACTURING opportunity to vertically integrate the operations. The sale saw all valuable We advised an ABL Lender on the acquisition by its client of one of the We were initially instructed by the Canadian headquartered KSR manufacturing assets realised for the benefit of the unsecured creditors who are expected largest group of recruitment companies in the UK, with an annual turnover group to advise the board of directors of their UK subsidiary on their to receive a significant dividend out of the insolvency. of GBP1.2 billion. The group serviced over 5,000 organisations across duties following a period of increasing financial distress faced by the a diverse range of sectors. subsidiary. Over the course of several months we advised and assisted This was a great outcome for the business, the local economy, and the the tier 2 automotive supplier with various contractual disputes, settlement c.150 employees whose positions were in significant doubt following Using the ABL Lender’s asset based lending facility combined with the various negotiations and creditor threats. the company’s administration. pre-pack administration purchases and solvent share purchases, the client (a significant operator in the recruitment sector) was able to acquire all viable The UK business operated as a manufacturing subsidiary within a global group The team was led by Chris Roberts and included Katy Seago, Vivak Vaish, businesses and assets; streamlining and simplifying a complicated group of companies that provide design, engineering and manufacturing capabilities. and Helen Hall (Legal Director, Employment). structure spanning several jurisdictions. Unfortunately the business was unable to continue to fund ongoing losses from the end of December 2019 and EY were engaged to provide strategic and HOSPITALITY & LEISURE This deal represented one of the ABL Lender’s largest lends to date and contingency planning advice with certain key customers about the proposed We advised Lloyds Bank Plc and EY as the subsequently appointed positions the borrower as one of the largest privately-owned recruitment insolvency of the company. The proposed administrators, with our assistance, administrators and liquidators of the Specialist Leisure Group. The group businesses in the UK. Most importantly, it saw over 45,000 jobs protected. agreed continued terms of supply with two significant global customers which comprised 16 companies owned the 117 year old Shearings coach which completed simultaneously with EY’s appointment as administrators on holiday, National Holidays and Wallace Arnold brands. The Group operated We had a pivotal role in advising on the structure of the deal and project 27 January 2020. over 40 hotels (Rob Russell). managing stakeholders to ensure the delivery of completion. The firm worked closely with the ABL Lender and the other parties’ legal teams to deliver the Trading was continued by the Administrators with the hope that once the OIL & GAS deal from first instruction to completion in an expedited three-week timetable. business was brought back on to a stable footing, a going concern sale could We are advising the boards of multiple companies within the DeepOcean group be achieved. After circa 6 months continued trade (COVID-19 temporary on its proposed Restructuring Plan. The team is led by Rob Russell and The team was led by Chris Roberts and consisted of Bethan Moore, Grace shutdown notwithstanding), the team successfully advised the Administrators David Manson, along with partners in Norway and the Netherlands. Imafidon, and Vivak Vaish, with broader support from the national DLA Piper on the sale of the business and assets of the UK subsidiary to a Tokyo listed ABL team. company that manufactures automotive components and saw merits in an

9 UK Restructuring Yorkshire

Yorkshire

Overview regulatory and data privacy matters, the marketing and sale of several valuable Key contacts The headline news for DLA Piper’s Yorkshire restructuring team in 2020 was the freehold and long leasehold properties and arrangements for the storage arrival of James Davison from Addleshaw Goddard in London, and the splash and sale of the remaining stock. Beales was a very significant part of the high James Davison he has made in the market since returning to his Yorkshire roots. James joined street in the towns and cities in which their department stores were located, Partner our Yorkshire team in July and has made an immediate impact, leading a so this mandate understandably attracted some significant local and national Leeds number of significant mandates, principally in the retail and consumer facing media coverage. We continue to advise KPMG in respect of the remaining +44 113 369 2088 sectors that have been hit the hardest by the pandemic. The Yorkshire team matters in these administrations. [email protected] has a proven record in these sectors and 2020 started with our appointment by KPMG as administrators of the Beales department store group; the GBK Having guided Gourmet Burger Kitchen through a company voluntary Duncan Mosley rescue deal and Clarks Shoes CVA have further cemented our market-leading arrangement in 2018, we had been delighted to see the group’s financial Partner credentials in this area. performance improving as we entered 2020. However, the impact of COVID-19 Sheffield on the group’s sales was significant and the uncertain trading environment saw +44 114 283 3261 We also extend our thanks and best wishes to Mark Jackson, who retired in shareholder support withdrawn. A large cross-office team, led by James Davison [email protected] March following an illustrious career at the firm spanning more than 30 years, and Chris Parker and including Rowan Aspinwall, Chris Baker, Clare Christopher, including a significant period as head of our UK Restructuring business. Ruth Ranton, Chloe Ball and Alexandra Greaves, worked alongside the group and its financial advisors, Deloitte, to find a new owner for the business Barney Smedley Yorkshire remains a key market for our business and we are investing in and ran a competitive bid process, ultimately leading to a successful sale to Partner growing our team in the region. We hope to be able to announce further news Boparan Restaurants Group, preserving more than 600 jobs. Leeds during Q1 in this respect. +44 113 369 2618 A cross-office team led by James Davison, supported by Rowan Aspinwall, [email protected] Articles and thought leadership advised Deloitte in connection with the rescue of Clarks Shoes’ UK business. UK Corporate Insolvency And Governance Act: Moratorium Clarks has been a family-owned business since it was founded in 1825 and has over 350 stores and thousands of employees in the UK. Despite an extremely Matter highlights challenging economic backdrop, the group secured investment of GBP 100 HOSPITALITY AND LEISURE million from Hong Kong-based investor, Lionrock Capital Partners, conditional We advised the directors of the companies operating the Beales department on the successful implementation of a company voluntary arrangement. stores in connection with their duties in light of the financial position of The CVA, which was approved by creditors on 20 November, moved many the group, while an accelerated options review was conducted. Having of the group’s leases onto turnover-based rents and reduced its operating determined that there was no solvent solution, the directors appointed costs significantly. When combined with broader restructuring measures, KPMG as administrators in January 2020. We have subsequently advised the CVA provides Clarks with a stable financial platform from which to deliver the administrators in all issues arising out of a trading administration cut its transformation strategy. short by COVID-19, including extensive advice on retention of title issues, 10 UK Restructuring UK team

Partners

David Ampaw James Davison Tim Dawson Huw Dolphin David Manson Duncan Mosley London Leeds London Birmingham Manchester Sheffield +44 20 7153 7199 +44 113 369 2088 +44 207 796 6640 +44 121 262 5970 +44 20 7153 7055 +44 114 283 3261 david.ampaw@ james.davison@ tim.dawson@ huw.dolphin@ david.manson@ duncan.mosley@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

Robert Russell Chris Parker Jonathan Richards Neil Riley Chris Roberts Barney Smedley Manchester London London London Manchester Leeds +44 161 235 4147 +44 20 7153 7402 +44 20 7796 6164 +44 20 7796 6260 +44 161 235 4265 +44 113 369 2618 robert.russell@ chris.parker@ jonathan.richards@ neil.riley@ chris.roberts@ barney.smedley@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

Legal Directors

Sarah Archer Rowan Aspinwall Deborah Brown Susannah Dingley Jared Green Pippa Hill London London Birmingham Sheffield London London +44 20 7153 7727 +44 20 7796 6785 +44 121 281 3773 +44 114 283 3423 +44 20 7796 6261 +44 20 7153 7044 sarah.archer@ rowan.aspinwall@ deborah.brown@ susannah.dingley@ jared.green@ pippa.hill@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

Sarah Letson Bethan Moore Katy Seago Edinburgh Manchester Manchester +44 20 7796 6639 +44 161 235 4095 +44 161 235 4279 sarah.letson@ bethan.moore@ katy.seago@ dlapiper.com dlapiper.com dlapiper.com

11 UK Restructuring

Senior Associates

Peter Manley John Milliken Rob Lyons Tony Potts Philip Povey Ruth Ranton London London Manchester Manchester London Leeds +44 207 796 6056 +44 20 7153 7097 +44 161 235 4035 +44 161 235 4006 +44 20 7796 6188 +44 113 369 2053 peter.manley@ john.milliken@ rob.lyons@ tony.potts@ philip.povey@ ruth.ranton@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

Samantha Reeves London +44 20 7796 6069 samantha.reeves@ dlapiper.com

Associates

Chloe Ball Euan Cameron Laura Carrier Malithi Fernando Alexandra Greaves Tom Hitchcock London London London London Leeds London +44 20 7153 7574 +44 20 7153 7581 +44 20 7796 6848 +44 20 7796 6744 +44 113 369 2225 +44 20 7796 6112 chloe.ball@ euan.cameron@ laura.carrier@ malithi.fernando@ alexandra.greaves@ tom.hitchcock@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

Grace Imafidon Jatin Lodhia Natalie Peacock Ben Stafford Vivak Vaish Aino Vuorio Manchester Birmingham London London Manchester Birmingham +44 161 235 4039 +44 121 262 5618 +44 20 7796 6816 +44 20 7796 6817 +44 161 235 4023 +44 121 262 5752 grace.imafidon@ jatin.lodhia@ natalie.peacock@ ben.stafford@ vivak.vaish@ aino.vuorio@ dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com dlapiper.com

12 DLA Piper is a global law firm operating through various separate and distinct legal entities. Further details of these entities can be found at www.dlapiper.com. This publication is intended as a general overview and discussion of the subjects dealt with, and does not create a lawyer-client relationship. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper will accept no responsibility for any actions taken or not taken on the basis of this publication. This may qualify as “Lawyer Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. www.dlapiper.com Copyright © 2021 DLA Piper. All rights reserved. | JAN21 | A07592-24