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Restructuring & Insolvency Charities & Philanthropy Compliance & Regulatory Enforcement Construction Corporate & Commercial Employment Group Action Litigation Immigration Information Technology Insurance Litigation Intellectual Property International Litigation & Dispute Resolution Private Client Property Property Litigation Restructuring & Insolvency Tax Restructuring & Insolvency Edwin Coe is well placed to advise on all aspects of restructuring and insolvency, with a highly experienced team and a consultant who is dual qualified as an Insolvency Practitioner. Whether you are an individual facing personal Misfeasance insolvency, a company requiring advice on corporate Restructuring processes restructuring, or an Insolvency Practitioner acting as an office holder, we are able to advise on all Unlawful dividends aspects of insolvency, bankruptcy and liquidation. We also regularly undertake licensing and We regularly undertake work in the following areas: disciplinary work for Insolvency Practitioners, ranging from individual practitioners to firms of Administrations and receiverships accountants of all sizes. Bankruptcies and liquidations Where necessary we are able to call upon the Civil fraud knowledge and expertise of lawyers working in ‘In the insolvency Confiscation and restraint proceedings complementary areas within the firm, such as Director claims banking, property, employment, litigation and field their reputation insurance, to assist clients with a wide variety of is very good indeed. Directors disqualification proceedings complex issues. Whether we act on a conditional Whenever there is a Director loan accounts fee basis, a fixed fee or time cost basis, we promise Individual and company voluntary value for money. complicated case we arrangements always use them.’ LPA receiverships Chambers UK 2018 Examples of our work We have handled: issues which arose in respect of keeping the Acting for the Trustee in Bankruptcy in a workforce together without incurring the large and complex case involving debts of personal liability of the Administrators. more than £40 million, in respect of an illegal Acting for the Administrators of a firm of pyramid scheme. A number of separate solicitors, providing advice in relation to the proceedings have been commenced alleging partnership deed and practising constraints fraud for in excess of £10 million. imposed by the partners’ professional Acting for the Administrator of a national chain obligations. The administration gave rise to the of menswear clothing shops based in major sale of the business as a going concern. retail outlets. This case involved complex issues Acting for the LPA Receiver of a tenanted regarding the disposal of the Company and its commercial property regarding various assets. issues relating to his appointment, disputes Acting for the Chief Executive of a high-profile with occupiers, marketing and strategy for hotel group in administration, in relation to repayment of the Appointor’s debt. serious allegations made by the Administrator Acting for the Petitioning Creditor and the concerning his conduct as a Director. Joint Liquidators of a UK residential housing development company in pursuing its former edwincoe.com Acting for the Administrators regarding the sale of a major technology group, and directors for fraud, bribery and misfeasance. providing advice on complex employment Acting for a bankrupt who was charged Acting for a third party in determining the limit under the Insolvency Act 1986 for failing to of a liquidator’s powers to compel the delivery ‘They lead the field with disclose his assets, in particular the existence of information and documentation under of Swiss bank accounts and gold ingots. The section 236 of the Insolvency Act 1986. a strong specialist team case involved assisting the bankrupt’s criminal Acting for the Trustee in the bankruptcy of of both partners and lawyers in understanding the Insolvency three debtors who together operated an illegal Act but also leading negotiations with the associates.’ pyramid scheme called Planline. The matter bankrupt’s Trustee in Bankruptcy in order to involved undertaking detailed examinations Chambers UK 2019 compromise the bankrupt’s affairs, partly with of numerous antecedent transactions to place a view to mitigating the criminal charges. assets out of reach of creditors, pursuing Acting for liquidators of a multimillion investigations to recover assets in Italy, the pound fraud investigation against the former Baltics and Switzerland and working closely ‘Ali Zaidi strikes a good directors of an AIM listed natural resources with the FSA and SFO. balance between being company following the transferring of shares Acting for the liquidator of a distributor in in subsidiary companies for questionable claims against directors and shareholders pragmatic and knowing consideration. This matter is being run in close regarding dividends and property transactions the law.’ co-operation with the Serious Fraud Office which depleted the company’s assets. The (SFO) and the Financial Services Authority (FSA). case was settled at a mediation. Chambers UK 2019 Acting for liquidators of a multimillion pound Acting in the matter of a bankrupt estate the land banking scheme, which misled investors deficiency in which is c.£1.2 billion. Advising about the true investment value and the on the trustee’s application to suspend expectation of future development of the sites. discharge, obtaining discharge and then This matter involves hundreds of creditors in advising on compliance with the statutory which the liquidators are seeking to recover duties to assist and attend. several million pounds and is being pursued in close co-operation with the FSA. Advising the administrators in the matter of a failed hotel room investment vehicle. Advising Acting for a trustee in bankruptcy of a dealer in on the sale of the charged land for £10 million, residential and commercial properties, where and the extent to which the security provides there was ongoing complicated litigation with for the consideration to be released to the other investors in those properties. We had to chargee. Advising on the investors’ claims, identify which matters were worth pursuing and their interests in land, and the anti-deprivation which ones were not, in order to avoid our client principle. incurring liability for other parties’ legal costs. Our Team For further information please contact a member of the team on +44 (0)20 7691 4000 or e-mail a team member direct: [email protected] For individual profiles Ali Zaidi Simeon Gilchrist please visit our website: Head of Litigation and Insolvency Partner www.edwincoe.com t: +44 (0)20 7691 4074 t: +44 (0)20 7691 4166 Edwin Coe LLP 2 Stone Buildings Lincoln’s Inn London WC2A 3TH David Fendt Sophia Bompas Chris Berry t: +44 (0)20 7691 4000 Senior Associate Associate Consultant e: [email protected] t: +44 (0)20 7691 4138 t: +44 (0)20 7691 4184 t: +44 (0)20 7691 4051 edwincoe.com Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing..
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  • UK (England and Wales)
    Restructuring and Insolvency 2006/07 Country Q&A UK (England and Wales) UK (England and Wales) Lyndon Norley, Partha Kar and Graham Lane, Kirkland and Ellis International LLP www.practicallaw.com/2-202-0910 SECURITY AND PRIORITIES ■ Floating charge. A floating charge can be taken over a variety of assets (both existing and future), which fluctuate from 1. What are the most common forms of security taken in rela- day to day. It is usually taken over a debtor's whole business tion to immovable and movable property? Are any specific and undertaking. formalities required for the creation of security by compa- nies? Unlike a fixed charge, a floating charge does not attach to a particular asset, but rather "floats" above one or more assets. During this time, the debtor is free to sell or dispose of the Immovable property assets without the creditor's consent. However, if a default specified in the charge document occurs, the floating charge The most common types of security for immovable property are: will "crystallise" into a fixed charge, which attaches to and encumbers specific assets. ■ Mortgage. A legal mortgage is the main form of security interest over real property. It historically involved legal title If a floating charge over all or substantially all of a com- to a debtor's property being transferred to the creditor as pany's assets has been created before 15 September 2003, security for a claim. The debtor retained possession of the it can be enforced by appointing an administrative receiver. property, but only recovered legal ownership when it repaid On default, the administrative receiver takes control of the the secured debt in full.
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  • Dealing with Secured Lenders1
    CHAPTER TWO Dealing with Secured Lenders1 David Hillman2 Mark Shinderman3 Aaron Wernick4 With investors continuing to pursue higher yields, the market for secured debt has experienced a resurgence since the depth of the fi nancial crisis of 2008. For borrowers, the lenders’ willingness to make these loans has translated to increased liquidity and access to capital for numerous purposes, including (i) providing working capital and funding for general corporate purposes; (ii) funding an acquisition-related transaction or a recapitalization of a company’s balance sheet; or (iii) refi nancing a borrower’s existing debt. The increased debt loads may lead to fi nancial distress when a borrower’s business sags, at which point management will typically turn to its secured lenders to begin negotiations on the restructuring of the business’s debt. Consequently, the secured lenders usually take the most active role in monitoring the credit and responding to problems when they fi rst arise. Secured loans come in many different forms and are offered from a range of different investors. The common feature for secured debt is the existence of a lien on all or a portion of the borrower’s assets. Following is a brief overview of the common types of secured lending: Asset-Based Loans. The traditional loan market consisted of an asset based lender (traditionally a bank or commercial fi nancing institution) providing revolving loans, term loans, and letters of credit secured by a fi rst priority lien on accounts receivable, inventory, equipment, and 1. Special thanks to Douglas R. Urquhart and Roshelle Nagar of Weil, Gotshal & Manges, LLP for their contributions to earlier editions of this chapter.
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  • Restructuring Risk in Credit Default Swaps: an Empirical Analysis∗
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  • Creating a Framework for Sovereign Debt Restructuring That Works 1
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    Restructuring Services Keeping pace with markets kpmg.ch/restructuring We work shoulder-to-shoulder with your company's management, stakeholders and lenders at every level. Our multidisciplinary team of restructuring professionals delivers result-oriented measures to protect, create and maximize value throughout all stages of a corporate crisis from concept development to implementation and monitoring. 2 Restructuring Services Content What we do 4 Our core services 5 Who we are 6 Strategy 8 Operational restructuring & performance improvement 9 Turnaround management 10 Financial restructuring 11 Lender Advisory 12 Stakeholder/Investment Advisory 13 Business closure & insolvency services 14 KPMG TrAction 15 Credentials 16 Restructuring Services 3 What we do We deliver a broad range of multidisciplinary advice on strategy, turnaround management & financial restructuring, performance improvement and reorganization. KPMG supports its clients in all phases of a corporate crisis from concept design to implementation. We offer you a multidisciplinary team with the right combination of experienced advisors from corporate restructuring, corporate finance, mergers & acquisitions (M&A), legal, tax and business consulting. Our approach is always tailored to your individual circumstances and requirements. We help you review and realign your business strategy, improve your performance and deal with all involved stakeholders and distress situations. Strategy (business model) Crisis-independent services Strategy review and Stakeholder/ development Lender
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  • Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak by Shavonda Brandon, Vaasavi Unnava, and Rosalind Z
    Expanding Debt Restructuring Options for Mortgage Lenders in Response to the COVID-19 Outbreak By Shavonda Brandon, Vaasavi Unnava, and Rosalind Z. Wiggins Original post here. With the outbreak of the COVID-19 virus, many countries have instituted some form of right to mortgage forbearance and protection from foreclosure or eviction. Homeowners may request a forbearance of payment for a negotiated or predetermined fixed period. At the end of the forbearance period, lenders work directly with borrowers to recoup the payments missed, by finding alternative payment schedules. Lenders may change the outstanding principal, interest rates, or term of the loan to help the borrower. Loan Classification Governments providing forbearance support to borrowers have taken steps to protect lenders who otherwise might experience a dramatic increase in their troubled debt. Typically, such restructuring constitutes a troubled debt restructuring for the lender. When debts are designated as troubled, they are categorized as a loss on balance sheets and a lender must adhere to strict reporting, tracking, and accounting requirements that are administratively costly. Several governments have changed accounting practices so that lenders may avoid classifying restructured mortgages as troubled. The United States provides such amnesty for mortgages modified pursuant to the CARES Act. Peru has pursued a similar strategy, with the Superintendence of Banks notifying financial institutions that any modifications to loan terms due to the COVID-19 pandemic would not change the classification of the loans. Russia allows banks to restructure loans without impacting their classification, so long as regulatory requirements continue to be satisfied. Regulatory Requirements Outside of loan classification, countries have modified regulatory requirements to provide greater flexibility in lending.
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  • Recent Trends in Second Lien Loans
    VEDDERPRICE ® Finance and Transactions Group Winter 2008–2009 Special Report “SECOND LIEN” LOANS Executive Summary. During the past few years, the financial markets have enabled borrowers to issue multiple layers of debt in sophisticated fi nancings, particularly in the case of highly leveraged companies. Thus, second lien fi nancing has not only become a recognized part of the capital structure of such fi nancings, but has experienced impressive expansion. The “market” terms that govern the second lien layer of debt evolved in light of increased involvement of nonbank investors (i.e., private equity sponsors, hedge funds, distressed debt funds, etc.). As the continued level of involvement of these nonbank investors remains uncertain and the credit markets tighten, the relationships between senior and junior secured lenders will change and certain provisions not typically found in recent intercreditor agreements may once again surface. This article discusses in detail the recent progression of second lien fi nancing structures and certain relevant intercreditor provisions (including payment subordination, enforcement actions, amendment rights and rights in bankruptcy) that may face increased scrutiny by fi rst lien and second lien lenders alike. WWW.VEDDERPRICE.COM VEDDERPRICE RECENT TRENDS IN SECOND LIEN LOANS Over the past several years, lenders have offered quarterly reviews, between 2003 and 2005, borrowers many alternative fi nancing vehicles as second lien loan volume spiked from $3.1 billion to options for fi nancing their acquisitions, corporate $16.3 billion. By 2006, LCD that reported the restructurings or operations. The creative and volume increased to $28.3 billion; in 2007, the complex fi nancing structures that resulted gave volume grew to nearly $30 billion, with more than rise to many different classes and types of lien 90% of the loans funded during the fi rst three priorities.
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  • A Primer on Second Lien Term Loan Financings by Neil Cummings and Kirk A
    A Primer on Second Lien Term Loan Financings By Neil Cummings and Kirk A. Davenport ne of the more noticeable developments in can protect their interests in the collateral by requiring the debt markets in the last year has been second lien lenders to agree to a “silent second” lien. Othe exponential increase in the number of Second lien lenders can often be persuaded to second lien fi nancings in the senior bank loan mar- agree to this arrangement because a silent second ket. Standard & Poor’s/Leveraged Commentary & lien is better than no lien at all. In addition, under Data Team reports that second lien fi nancings raised the intercreditor agreement, in most deals, the more than $7.8 billion in the fi rst seven months of second lien lenders expressly reserve all of the 2004 alone, compared with about $3.2 billion for all rights of an unsecured creditor, subject to some of 2003. important exceptions. In this article, we discuss second lien term loans All of this sounds very simple, and fi rst and second marketed for sale in the institutional loan market, lien investors may be tempted to ask why it takes with a goal of providing both an overview of the pages of heavily negotiated intercreditor terms to product and an understanding of some of the key document a silent second lien. The answer is that business and legal issues that are often at issue. a “silent second” lien can span a range from com- In a second lien loan transaction, the second lien pletely silent to fairly quiet, and where the volume lenders hold a second priority security interest on the control is ultimately set varies from deal to deal, assets of the borrower.
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  • Troubled Debt Restructurings
    Journal of Financial Economics 27 (1990) 315-353. North-Holland Troubled debt restructurings An empirical study of private reorganization of firms in default* Stuart C. Gilson The Unicersity of Texas at Austin, Austin, TX 78712, USA Kose John and Larry H.P. Lang New York University, New York, NY 10003, USA Received November 1989, final version received May 1990 This study investigates the incentives of financially distressed firms to restructure their debt privately rather than through formal bankruptcy. In a sample of 169 financially distressed companies, about half successfully restructure their debt outside of Chapter 11. Firms more likely fo restructure their debt privately have more intangible assets, owe more of their debt to banks, and owe fewer lenders. Analysis of stock returns suggests that the market is also able to discriminate er ante between the two sets of firms, and that stockholders are systematically better off when debt is restructured privately. 1. Introduction With, the proliferation of leveraged buyouts (LBOs) and other highly leveraged transactions, there has been growing popular concern that the corporate sector is being burdened with too much debt. Much of this concern *We would like to thank Edward Altman. Yakov Amihud, Sugato Bhattacharya, Keith Brown, Robert Bruner, T. Ronald Casper, Charles D’Ambrosio, Larry Dann, Oliver Hart, Gailen Hite, Max Holmes, Scott Lee, Gershon Mandelker. Scott Mason, Robert Merton, Wayne Mikkelson, Megan Partch, Ramesh Rao, Roy Smith, Chester Spatt, Gopala Vasudevan, and Richard West for their helpful comments. We are especially grateful to Michael Jensen (the editor) and Karen Wruck (the referee) for their many detailed and thoughtful suggestions.
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  • Restructuring & Insolvency
    GETTING THROUGH THE DEAL Restructuring & Insolvency Restructuring & Insolvency Restructuring Contributing editor Bruce Leonard 2017 2017 © Law Business Research 2016 Restructuring & Insolvency 2017 Contributing editor Bruce Leonard The International Insolvency Institute Publisher Law The information provided in this publication is Gideon Roberton general and may not apply in a specific situation. [email protected] Business Legal advice should always be sought before taking Research any legal action based on the information provided. Subscriptions This information is not intended to create, nor does Sophie Pallier Published by receipt of it constitute, a lawyer–client relationship. [email protected] Law Business Research Ltd The publishers and authors accept no responsibility 87 Lancaster Road for any acts or omissions contained herein. The Senior business development managers London, W11 1QQ, UK information provided was verified between Alan Lee Tel: +44 20 3708 4199 September and October 2016. Be advised that this is [email protected] Fax: +44 20 7229 6910 a developing area. Adam Sargent © Law Business Research Ltd 2016 [email protected] No photocopying without a CLA licence. Printed and distributed by First published 2008 Encompass Print Solutions Dan White Tenth edition Tel: 0844 2480 112 [email protected] ISSN 2040-7408 © Law Business Research 2016 CONTENTS Global overview 7 Cyprus 129 Richard Tett Lia Iordanou Theodoulou, Angeliki Epaminonda
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