Brexit: a Unique Irish Opportunity for Cross-Border Restructuring? 14.02.2019
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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. -
Dictionary of Insolvency Terms in EU Member States DICTIONARY of INSOLVENCY TERMS in EU MEMBER STATES
Dictionary of Insolvency Terms in EU Member States DICTIONARY OF INSOLVENCY TERMS IN EU MEMBER STATES Contents Introduction......................................................................3 Lithuania.........................................................................97 Austria...............................................................................4 Luxembourg..................................................................104 Belgium..............................................................................9 Malta..............................................................................111 Bulgaria...........................................................................14 Netherlands..................................................................120 Croatia.............................................................................19 Poland............................................................................125 Cyprus..............................................................................26 Portugal.........................................................................135 Czech Republic................................................................33 Romania........................................................................141 Denmark..........................................................................38 Slovakia.........................................................................147 Estonia.............................................................................42 Slovenia.........................................................................152 -
Repudiation and Disclaimer of Leases in Examinership and Liquidation
Repudiation and Disclaimer of Leases in Examinership and Liquidation REPUDIATION AND DISCLAIMER OF LEASES IN EXAMINERSHIP AND LIQUIDATION Introduction The recent unprecedented economic downturn has resulted in many companies suffering substantial loss of business revenue due to a lack of demand for their products and services. Although companies have been faced with a reduction in their revenues, there has been no corresponding reduction in their overheads including the payment of rent which for many companies is a significant cost. A substantial amount of companies operate their businesses from properties which are held under lease. Most of these leases were negotiated prior to the downturn when rents were inflated. They contain upwards only rent review clauses with a limited option to break, usually subject to the payment of a penalty. It has become apparent that onerous covenants in leases coupled with high rents are playing a substantial role in the financial hardship of companies leading in many cases to insolvency. The recession has resulted in a dramatic surge in the number of companies seeking to appoint an examiner where they are considered to have a reasonable prospect of survival. The large volume of examinerships and liquidations has required both examiners and liquidators to address and resolve one of the key causes of insolvency, namely onerous leases with overinflated rents. This article proposes to outline the legislation governing the repudiation and disclaimer of leases in an examinership and in a liquidation and the interpretation and clarification of such legislation as a result of various cases. Examinership Examinership is generally construed as a positive option for a company suffering financial hardship which has a reasonable prospect of survival if restructured. -
Liquidators, Receivers and Examiners Their Duties and Powers
Liquidators, Receivers and Examiners Their duties and powers A quick guide Introduction We have produced this information booklet to explain the powers, duties and responsibilities of liquidators, receivers and examiners under the Companies Acts. What are liquidations, receiverships and examinerships? The liquidation of a company is also known as ‘winding up’ a company. The process takes the company out of existence in an orderly way by paying debts from any available assets. Receivership is used by banks or other lenders to sell a company asset that was promised to them if the company failed to repay its loan as agreed. Examinership is a process that protects a company from its creditors (the people to whom it owes money) while efforts are being made to keep it running as a going concern. What are liquidators, receivers and examiners? A liquidator is the person who winds up a company. A receiver is the person who sells particular company assets on behalf of a lender. Where a loan is secured on a company’s entire business, a ‘receiver manager’ can be appointed as manager of the business during the receivership. Once a receiver raises enough money to pay back the debt, their job is finished. Liquidators, Receivers and Examiners Their duties and powers Examiners consider if a company can be saved and, if it can, they prepare the rescue plan. Who can act as liquidators, receivers or examiners? Liquidators, receivers and examiners do not need to have any specific qualifications under the law. However, they are usually practising accountants. To make sure that liquidators, receivers and examiners work independently of the company, they cannot be: • a director or employee of the company; or • a family member, partner or employee of a director. -
Cross-Border Recognition of Insolvency and Restructuring Proceedings Post-Brexit
CROSS-BORDER RECOGNITION OF INSOLVENCY AND RESTRUCTURING PROCEEDINGS POST-BREXIT AND RESTRUCTURING PROCEEDINGS INSOLVENCY OF RECOGNITION CROSS-BORDER KEY POINTS Despite the announcement of a new free trade agreement between the EU and UK, Feature we are effectively in a “no deal” scenario when it comes to the recognition of insolvency proceedings and, more generally, civil judgments, between the EU and the UK. The reciprocal, automatic recognition frameworks are no more. Debtors and insolvency practitioners must now navigate through a patchwork of international treaties, European legislation, domestic legislation and common law to assess whether inbound/outbound recognition is forthcoming and, if it is, what that “recognition” really looks like in practice. The lack of an automatic recognition regime will likely increase the cost, complexity and time taken to complete cross-border restructurings and insolvencies. However, it should not be equated with a loss of recognition per se. There may be more pathways to navigate but the analysis is not, by any means, insurmountable. Over time, as debtors become more familiar with the post-Brexit legal landscape, a clear and well-trodden path to obtaining recognition will likely emerge. Authors Philip Wells and Lucy Aconley How to get recognised: cross-border recognition of insolvency and restructuring proceedings post-Brexit This article summarises the post-Brexit position regarding inbound and outbound This article focusses on cross-border recognition of insolvency and restructuring proceedings -
Irish Examinership: Post-Eircom a Look at Ireland's Fastest and Largest
A look at Ireland’s fastest and largest restructuring through examinership and the implications for the process Irish examinership: post-eircom A look at Ireland’s fastest and largest restructuring through examinership and the implications for the process* David Baxter Tanya Sheridan A&L Goodbody, Dublin A&L Goodbody [email protected] The Irish telecommunications company eircom recently successfully concluded its restructuring through the Irish examinership process. This examinership is both the largest in terms of the overall quantum of debt that was restructured and also the largest successful restructuring through examinership in Ireland to date. The speed with which the restructuring of this strategically important company was concluded was due in large part to the degree of pre-negotiation between the company and its lenders before the process commenced. The eircom examinership demonstrated the degree to which an element of pre-negotiation can compliment the process. The advantages of the process, having been highlighted through the eircom examinership, might attract distressed companies from other EU jurisdictions to undertake a COMI shift to Ireland in order to avail of this process. he eircom examinership was notable for both the Irish High Court just 54 days after the companies Tsize of this debt restructuring and the speed in entered examinership. which the process was successfully concluded. In all, This restructuring also demonstrates the advantages €1.4bn of a total debt of approximately €4bn was of examinership as a ‘one-stop shop’: a flexible process written off the balance sheets of the eircom operating that allows for both the write-off of debt and the change companies. -
Summary Rescue Process”
COMPANY LAW REVIEW GROUP REPORT ADVISING ON A LEGAL STRUCTURE FOR THE RESCUE OF SMALL COMPANIES 22 OCTOBER 2020 1 | P a g e Contents Chairperson’s Letter to the Minister for Business, Enterprise and Innovation 4 1. Introduction to the Report 5 1.1. The Company Law Review Group ................................................................... 5 1.2 The Role of the CLRG ...................................................................................... 5 1.3 Policy Development........................................................................................ 5 1.4 Contact information ....................................................................................... 5 2. The Company Law Review Group Membership…………………………………………….….6 2.1 Membership of the Company Law Review Group ............................................ 6 3. The Work Programme ............................................................................................. 8 3.1 Introduction to the Work Programme ............................................................ 8 3.2 Company Law Review Group Work Programme 2018-2020 .............................. 8 3.3 Additional item to the Work Programme ........................................................ 9 3.4 Decision making process of the Company Law Review Group……………… ... ……..9 3.5 Committees of the Company Law Review Group ..... ….………………………………..…9 4. A Rescue Plan for SMEs ............................................................................................... 10 4.1 Introduction ................................................................................................ -
Singapore's New “Supercharged” Scheme of Arrangement
KEY POINTS Feature Singapore’s new regime combines elements of the US Ch 11 process with the traditional creditor scheme of arrangement. Companies may apply for a broad moratorium that can apply to acts outside of Singapore. Moratoriums can also be granted in respect of certain related companies. There is a (cross-class) cram down mechanic in respect of unsecured debt, but its effectiveness in practice is uncertain. The changes include introduction of a “pre-packaged scheme” which bypasses the requirement for scheme meetings, where it can be demonstrated the outcome is a foregone conclusion. It remains to be seen the extent to which foreign courts will recognise and give effect to a Singapore scheme. Authors Paul Apáthy and Emmanuel Chua Singapore’s new “supercharged” scheme of arrangement In this article, the authors consider aspects of Singapore’s new “supercharged” these new provisions are based on concepts scheme of arrangement procedure and its potential use in cross border restructurings. found in Ch 11 of the Bankruptcy Code. By adopting these concepts, Singapore is seeking to create a new regime that incorporates INTRODUCTION Central to the reforms is the the “best of both worlds” of the scheme of SINGAPORE’S NEW“SUPERCHARGED” SCHEME OF ARRANGEMENT Singapore is seeking to become an augmentation of the scheme of arrangement arrangement and Ch 11 procedures. ■international debt restructuring hub, process with a number of new provisions, akin to London or New York. This aspiration some of which were adopted from the United APPLICABILITY OF SINGAPORE is unambiguously conveyed in the title of the States Bankruptcy Code (the Bankruptcy SCHEMES TO FOREIGN COMPANIES ‘Report of the Committee to Strengthen Code). -
April 2020 COVID-19 and EXAMINERSHIP – WHAT the EXAMINER WANTS YOU to KNOW
April 2020 COVID-19 AND EXAMINERSHIP – WHAT THE EXAMINER WANTS YOU TO KNOW For further information Following our articles on: on any of the issues discussed in this article 1. Emergency liquidity for businesses adversely affected by the please contact: economic impact of the COVID-19 Pandemic: https://www.dilloneustace.com/legal-updates/the-abc-and- de-of-emergency-liquidity-solutions; 2. Standstill Agreements as the first item out of the financial first aid kit: https://www.dilloneustace.com/legal- updates/running-to-standstill; and 3. Ireland’s public sector lifeboat for SMEs and small mid-cap businesses: https://www.dilloneustace.com/legal- updates/liquid-spirit-government-guaranteed-working-capital- facilities-for-irish-smes-adversely-affected-by-the-covid-19- pandemic, Jamie Ensor Partner, Insolvency we turn to the main items for consideration by stakeholders in DD: + 353 (0)1 673 1722 circumstances where examinership is the chosen mechanism for [email protected] rehabilitation and long term recovery for a company in financial difficulty as a consequence of the Pandemic. Testing times In the current climate, it is unfortunately all too possible to imagine a business that has dealt with a severe business interruption by following the government’s advice and has: • lowered variable costs (while participating in the COVID-19 Wage Subsidy Scheme); • delayed discretionary spending on replacing or improving Richard Ambery assets, new projects and research and development; Consultant, Capital Markets DD: + 353 (0)1 673 1003 [email protected] -
The Scheme of Arrangement: a Viable Option for Nigerian Companies In
EMERGING MARKETS RESTRUCTURING JOURNAL ISSUE NO. 1 — SPRING 2016 The Scheme of Arrangement: A Viable Option for Nigerian Companies in a Downturn? By DIPO OKURIBIDO In Nigeria, large corporate bankruptcies are a rarity, and available literature on the subject tends to deal more with theory and provisions of existing law than with actual precedents and examples of lenders seeking liquidation, or to otherwise enforce security. Reasons abound for this situation, but perhaps the most striking of these is the fact that existing corporate insolvency legislation generally focuses on the actual liquidation of the insolvent company, as opposed to establishing buffers or moratoriums to create opportunities for its turnaround or rescue. The result of the limited insolvency regime is that Nigerian law establish a process for a Nigerian company to enter into a companies simply do not surrender to bankruptcy proceedings compromise or arrangement with its creditors or shareholders until there is clearly and absolutely no hope of survival. Up to (or any class of either of them). that point, in the gap between limping and dying, the tool of choice has been the Scheme of Arrangement. Under the rules contained in the Principal Companies Legislation1 (and supplemented in recent iterations of the The Nigerian Scheme of Arrangement Securities and Exchange Commission Rules and Regulations2), a public company would need to file an application for the The Nigerian Scheme of Arrangement is loosely based on the proposed scheme with the Nigerian Securities and Exchange UK Scheme of Arrangement. Similarly with its source material, Commission (“SEC”) and, following the SEC’s approval of the the Scheme of Arrangement provisions under Nigerian scheme, would then need to make an application to the Federal 26 EMERGING MARKETS RESTRUCTURING JOURNAL ISSUE NO. -
Contracting out of Secondary Insolvency Proceedings: the Main Liquidator's Undertaking in the Meaning of Article 18 In
Brooklyn Journal of Corporate, Financial & Commercial Law Volume 9 | Issue 1 Article 12 2014 Contracting Out of Secondary Insolvency Proceedings: The ainM Liquidator's Undertaking in the Meaning of Article 18 in the Proposal to Amend the EU Insolvency Regulation Bob Wessels Follow this and additional works at: https://brooklynworks.brooklaw.edu/bjcfcl Recommended Citation Bob Wessels, Contracting Out of Secondary Insolvency Proceedings: The Main Liquidator's Undertaking in the Meaning of Article 18 in the Proposal to Amend the EU Insolvency Regulation, 9 Brook. J. Corp. Fin. & Com. L. (2014). Available at: https://brooklynworks.brooklaw.edu/bjcfcl/vol9/iss1/12 This Article is brought to you for free and open access by the Law Journals at BrooklynWorks. It has been accepted for inclusion in Brooklyn Journal of Corporate, Financial & Commercial Law by an authorized editor of BrooklynWorks. CONTRACTING OUT OF SECONDARY INSOLVENCY PROCEEDINGS: THE MAIN LIQUIDATOR’S UNDERTAKING IN THE MEANING OF ARTICLE 18 IN THE PROPOSAL TO AMEND THE EU INSOLVENCY REGULATION Prof. Dr. Bob Wessels* INTRODUCTIOn The European Insolvency Regulation1 aims to improve the efficiency and effectiveness of insolvency proceedings having cross-border effects within the European Union. For that purpose, the Insolvency Regulation lays down rules on jurisdiction common to all member states of the European Union (Member States), rules to facilitate recognition of insolvency judgments, and rules regarding the applicable law. The model of the Regulation will be known. It allows for one main proceeding, opened in one Member State, with the possibility of opening secondary proceedings in other EU Member States. The procedural model can only be successful if these proceedings are coordinated: Main insolvency proceedings and secondary proceedings can…contribute to the effective realization of the total assets only if all the concurrent proceedings pending are coordinated. -
Schemes of Arrangement As Restructuring Tools
Schemes of Arrangement as Restructuring Tools Since the start of the current credit crunch there has been a huge increase in the use of schemes as a restructuring tool. In most cases a scheme will be the fall-back strategy for use in cases where consensual changes to creditors’ and/ or shareholders’ rights under finance documents cannot be negotiated. Often the need for a scheme will fall away, but the prospect of a scheme will have helped deliver the consensus. So as well as those schemes that see their way through to implementation, there are many draft schemes in the marketplace. The purpose of this client note is to provide an overview of the use of schemes as a creditor restructuring tool and to highlight some of the key practice points. 1 What is a scheme? constituencies. The dominant driver of the creditor negotiations will usually be the A scheme of arrangement is a very flexible and creditor(s) who hold security and/or enjoy a long-established Companies Act procedure priority in repayment on an enforcement at the which can be used to vary the rights of some or point at which the value of the business breaks all of a company’s creditors and/or shareholders. (known as the fulcrum). That said, the question As long as a scheme receives the support of the of the value of a business will invariably be a statutory majorities of each class of creditor contentious point between the various stake- and/or shareholder whose rights are affected by holders in a restructuring and the value of the it, and the court sanctions it, the scheme will be business is in any event likely to move during binding on all creditors and/or shareholders, the course of restructuring negotiations as the including those within each class voting against business continues its operations.