DOCSLIB.ORG

The Wolf Theiss Guide To

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Wolf Theiss Guide To THE WOLF THEISS GUIDE TO: Restructuring Loans and Enforcement of Security 2017 Edition 1 THE WOLF THEISS GUIDE TO: Restructuring Loans and Enforcement of Security This 2017 Wolf Theiss Guide to Restructuring Loans and Enforcement of Security is intended as a practical guide to the general principles and features of restructuring loans and insolvency proceedings in the countries included in the publication. While every effort has been made to ensure that the country reports are accurate as at the date stated on the publication, they should be used as a general reference guide only and should not be relied upon as definitive legal advice. In the rapidly changing CEE/SEE jurisdictions, the laws and regulations are frequently revised, either by amended legislation or by administrative interpretation. Status of information: Current as of November 2016 Conception, design, and editing: WOLF THEISS Rechtsanwälte GmbH & Co KG, Attorneys-at-Law Schubertring 6, 1010 Vienna, Austria www.wolftheiss.com © 2017 WOLF THEISS Rechtsanwälte GmbH & Co KG. All Rights Reserved. Restructuring Loans and Enforcement of Security TABLE OF CONTENT FOREWORD 03 PART I. GENERAL INFORMATION INTRODUCTION 06 RESTRUCTURING 10 ENFORCEMENT 19 PART II. COUNTRY-SPECIFIC INFORMATION ALBANIA 22 BOSNIA AND HERZEGOVINA 32 BULGARIA 44 CROATIA 56 CZECH REPUBLIC 66 HUNGARY 76 POLAND 88 ROMANIA 98 SERBIA 110 SLOVAK REPUBLIC 120 SLOVENIA 130 UKRAINE 142 CONTACT 154 Restructuring Loans and Enforcement of Security FOREWORD Foreword The most important lessons learned since the collapse of Lehman Brothers are that no bank is too big to fail and that national banking systems are ill-equipped to deal with a truly global financial market. In Central and Eastern and Southeastern Europe (CEE/SEE), the financial markets that were dominated by Austrian banks experienced unprecedented growth up until 2008. Since then, we have seen bank nationalisations (Kommunalkredit, HYPO GROUP ALPE ADRIA AG), state rescue packages amounting to hundreds of billions of euros, and cross-border loan lending (i.e. new lending without state or EBRD/EIB support) coming to an abrupt halt only to resume to some extent relatively recently. In such times business relationships are stress-tested and lenders in many instances still face defaulted borrowers all over the region. Not surprisingly, the focus of a law firm committed to the CEE/SEE region shifts towards litigation, representation of creditors in insolvency proceedings, consensual restructuring, enforcement of security interests and the sale of non-performing loans. Accordingly, Wolf Theiss has been advising clients coming from all sides of the spectrum in relation to big ticket restructuring and NPL work, including the legal advice provided to a group of Austrian lenders in one of the largest restructurings in the CEE/SEE involving a bankrupt Slovenian state holding company. We also advised a leading Austrian bank in connection with the enforcement proceedings and the auctioning of real estate in Hungary and Bosnia as well as supporting an Austrian bank in respect of an NPL portfolio in the Ukraine, just to name a few from our recent experience. Some of the lessons learned on a CEE/SEE level were: . CEE/SEE is far from being a homogenous region where the “one size fits all” approach would work; . Banks have been reliable partners in the region, working on solutions with borrowers where there is a business case for recovery provided the proper legal advice has been sought to set up the right structure and a proper balance has been found in respect of the interests of all stakeholders. It is the responsibility of advisors (tax, accounting or legal) to ensure that viable solutions are found in a challenging legal environment such as in the CEE/SEE region: Wolf Theiss is committed and has proven to be such a reliable partner for our clients. Markus Heidinger • January 2017 Marcell Németh • January 2017 Partner, Head of Banking and Finance Practice Group, Wolf Theiss Counsel, Banking and Finance Practice Group, Wolf Theiss 3 4 Restructuring Loans and Enforcement of Security WOLF THEISS REGION Warsaw POLAND Kyiv Prague CZECH UKRAINE REPUBLIC SLOVAK REPUBLIC Bratislava Vienna AUSTRIA Budapest HUNGARY Ljubljana ROMANIA SLOVENIA Zagreb CROATIA Bucharest BOSNIA & Belgrade HERZEGOVINA SERBIA Sarajevo BULGARIA Sofia Tirana ALBANIA WOLF THEISS REGION EUROPE 5 1. INTRODUCTION 1.1 Problem Loan – Definition A Problem Loan requires action on the part of one or more Stakeholders in order to avoid an Event of Default and, consequently, acceleration of the Problem Loan. In special situations, a Problem Loan may receive (unexpected) third-party support. 1.2 Early warning signs Cause of distress can result from: . a flawed business case; . a general downturn in the economy; . problems in the company’s business sector; . too much leverage on the balance sheet; . bad management; . very often a combination of the above. Business case for recovery must address above causes and show a way out of the crisis. 1.3 Problem Loan – Stakeholder actions In general, Stakeholder actions may take any of the following forms: . remedy Default (= potential Event of Default); . consensual restructuring; . non-consensual restructuring; . out-of-court enforcement; . in-court enforcement. Special situations include: . hold-out Lenders; . loan-to-own Lenders; . third-party support: – public interest in functioning of banking system; – private interest in strategic asset. 6 Restructuring Loans and Enforcement of Security INTRODUCTION 1.4 Stakeholders Sponsor 100% Shareholder Equity Shareholder Loan Agr 100% Junior Facility Agr Junior Lender Junior Loan Senior Facility Agr Senior Lender Senior Loan ProblemCo Purchase Agr Trade Counterparties BORROWER Trade Credit other relevant parties pension plan, Government etc. 1.5 Events of Default – Back to basics . Representations and warranties: due to representations and warranties Borrowers have a duty to disclose information. Undertakings: due to positive/negative undertakings Borrowers are obliged to act/abstain from acting in a certain way: – positive undertakings may give rise to claims for performance and/ or damages; – negative undertakings may give right to obtain an injunction. Financial covenants (to which equity cures may apply): – breach as first indicator of financial stress; however, covenant-lite transactions in the market with few, if any, financial covenants; – breach of covenant at the time of delivery of Compliance Certificate; – from year end until delivery of Compliance Certificate => Default (include notification undertaking). 7 1.6 Typical Event of Default . Payment default: – refinancing at end of term may not be available; – transactions without realistic exit scenario are in the market. Breach of financial covenant . Misrepresentation . Breach of undertaking: – negative pledge (in some jurisdictions not legally valid); – conditions subsequent: . Cross-default (issue: it may trigger cross-defaults in other facilities or hedging arrangements?) . Occurrence of Material Adverse Effect: – based on the opinion of the Facility Agent? – not often used as a standalone default because: • reasonability tests are likely to be applied; • forward-looking; • conservative interpretation by courts (balance sheet tests). Criteria of insolvency test met . Opening of insolvency proceedings . Attachment by other creditor(s) . Auditors qualification . Other Events of Default 1.7 Events of Default – Effects and issues . Effects of the occurrence of an Event of Default: – no further utilizations (already in case of Default); – the Loan may be accelerated; – usually triggers ability to freely transfer Loan Asset; – security interests become enforceable (Enforcement Event). Issues: – is there a clear-cut Event of Default (e.g. non-payment, breach of financial covenants) or a questionable Event of Default (e.g. Material Adverse Effect)? => risk of damage claims; – is there an Event of Default that is allowed to be or otherwise may be cured? . Do qualifications apply? 8 Restructuring Loans and Enforcement of Security INTRODUCTION 1.8 Events of Default – Qualifications Events of Defaults are mostly subject to qualifications: . grace/remedy periods; . monetary thresholds; . factual representations and warranties: to the best knowledge qualification; . legal representations and warranties: Legal Reservations qualification; . materiality qualifications; . Lenders and Agents may be required to act reasonably. Such qualifications may make it difficult to declare an Event of Default which does not bear a potential liability risk for the Finance Parties in case of acceleration/enforcement. 1.9 Acceleration Upon the occurrence of an Event of Default that is continuing, the Facility Agent may, and shall if directed by the Majority Lenders: . cancel Commitments; . declare the Loan immediately due and payable; . declare the Loan payable on demand; . instruct the Security Agent to enforce the Transaction Security. In certain countries insolvency laws may prohibit the acceleration of a Loan. ProblemCo´s liquidity problems may further increase because: . suppliers may radically shorten payment terms or insist on cash on delivery; . payment morale of customers may deteriorate. 1.10 Borrower’s actions The Borrower typically knows that the Loan has become a Problem Loan and it should therefore take immediate action: . if possible, remedy the Default (= potential Event of Default) on its own or, if not advisable / not feasible/ does not make commercial sense; . initiate
Load more

Recommended publications
  • The Anti-Lien: Another Security Interest in Land*
    The Anti-Lien: Another Security Interest in Land* Uriel Reichmant The law recognizes various security interests in land, which are de- signed to provide two distinct advantages over unsecured interests: the right to priority over general creditors in bankruptcy proceedings, and the right to satisfy the debt from a specified parcel of property. This article proposes recognition of an intermediate concept between secured and unsecured debt: an interest in land that secures to some extent the repayment of a debt, but does not possess the twin characteristics of full security interests. This interest in land, the "anti-lien,"1 is a preventive measure; the debtor's power of alienation and power to grant another security interest are suspended while the debt remains outstanding. The anti-lien creditor has no powers or rights other than this passive rem- edy; for all other purposes, he is treated as a simple debt creditor. The few cases that have dealt with contracts containing anti-lien re- strictions have limited the analysis to a narrow question: did the con- tract create an equitable lien (that possesses the characteristics of a traditional security interest) or merely a personal obligation? Framing the question in this way eliminated consideration of the anti-lien alter- native-an alternative that is potentially useful when a regular security interest is unavailable or economically impractical. This paper attempts to explain deficiencies in the application of the equitable lien analysis to the anti-lien situation and argues the case for the anti-lien concept. Just a decade ago, documents evidencing an anti-lien approach were widely used in California.
    [Show full text]
  • How Protective Are Ukraine's International Bonds?
    GLOBAL LAW INTELLIGENCE UNIT How protective are Ukraine’s international bonds? 27 January 2015 © Allen & Overy 2015 2 The Ukraine international bond issues | January 2015 How protective are Ukraine’s international bonds? Introduction This note contains a brief commentary on some of the main legal terms in international debt issues of or guaranteed by Ukraine. The objective is to analyse the degree to which these bonds are consistent with practice in the international capital markets and to weigh up the balance between the sovereign debtor and the bondholder creditors in terms of the rights and protections granted by the terms of the bonds. Our main conclusion is that the bond issue legal terms seek to enhance stability for both Ukraine and the bondholders if there is a crisis. International bond issues reviewed This commentary is based on the terms set out in an issue by Ukraine of USD700 million 6.75% notes due 2017 covered by a prospectus dated 13 November 2007. We have, so far, looked at another 14 or so prospectuses covering international bonds, all governed by English law, and the relevant terms discussed in this note seem to be the same or very similar. Nearly all are for U.S. dollars. These other prospectuses are for English law issues where the prospectus is dated October 2005, November 2006, January 2007 (Swiss francs), November 2009 (Naftogas restructured guaranteed issue), September 2010, November, 2012, February 2011, June 2011, July 2012, August 2012, November 2012, April 2013 and February 2014. There are significant differences in the latter document. We have also looked through a prospectus of 7 December 2012 for an issue of around USD550m notes issued by “Financing of Infrastructural Projects” guaranteed by Ukraine where there are detailed differences compared to the direct bond issues listed above.
    [Show full text]
  • Disadvantages of Negative Pledge Clause
    Disadvantages Of Negative Pledge Clause Chiffon and heterochromous Reynard entices almost delectably, though Creighton utilise his cloaca begild. nettlesAtrocious his Carter symposiarchs chafed her bitter bransle and rapaciously. so glutinously that Byram clerks very sufficiently. Spring Fons re-equips: he Atype of negative pledge waiver of individual loans are also to be Csl allows an arbitrary laws. Grants examiners should be negative pledge clause will incur at each creditor may go so collected in order against other. The creditor should i pay taxes, credit agency offers pointtime assessments or other performance of another jurisdiction in a loan, subject settling bank? Often available for negative covenants are clauses are supplied. As negative pledge clause. The carrier for its loaninvestment posture and disadvantages of negative pledge clause, either be done regardless of. Additional loans and clauses should consider. For negative pledge clause will not occurred and disadvantages along with a point we also questionable quality, the ordinary meaning a separate loan? The negative covenants require an authorization. Negative pledge clause, negative pledge agreement. This negative impact they are clauses areoften much, without preparing it could be a legal mortgage creditor need a much. We would not generallybe registrable, but which may not required to be enough loans made before using an other related thereto and disadvantages of negative pledge clause. The debt and legal actions pertaining to enhance earnings representing the importance of one of the size or indirectly via restricted subsidiaries in some loans is made? No negative pledge clause does not. Each type of negative covenants typically used within one that itor a registrable charge on request for project lenders mayconsider limiting and disadvantages for? Administrative agent that exception loansof a maximum security over.
    [Show full text]
  • Federal Reserve's Recent Releases Further Clarify Key Terms of The
    Federal Reserve’s Recent Releases Further Clarify Key Terms of the Main Street Lending Program June 1, 2020 AUTHORS David Mortlock | David Tarr | Daniel Durschlag | Weston T. Eguchi Catherine Grimm | Peter Bogard | Melissa Doura | Marta Ferrari On May 27, 2020, the Federal Reserve System (the “Federal Reserve”) released updated guidance on its Main Street Lending Program (the “Main Street Program”), as well as form legal certifications and agreements that eligible borrowers and lenders will be required to submit to participate in the Main Street Program (such updated guidance and legal forms, the “May 27 Releases”). Together, the May 27 Releases further clarify key terms of the Main Street Program, including: - The eligibility of certain multinational entities or U.S. subsidiaries of foreign companies to participate in the Main Street Program (and restrictions on their use of loan proceeds); - How the affiliation rules under the CARES Act will apply to applicants’ eligibility under the thresholds for the Main Street Program, as well as the eligibility of private equity funds to participate in the Main Street Program; - How lenders should select EBITDA adjustments to determine facility sizing, among other things; - How requirements under the Expanded Loan Facility relating to existing lenders will be applied; - More specific guidance on documentation, including covenants and terms that must be incorporated in Main Street Program loans relating to priority and security requirements, certain mandatory prepayment events, cross - acceleration and financial reporting; and Willkie Farr & Gallagher LLP | willkie.com 1 Federal Reserve’s Recent Releases Further Clarify Key Terms of the Main Street Lending Program - Guidance on the Federal Reserve’s approach to managing Main Street Program loans after funding.
    [Show full text]
  • Optimal Property Rights in Financial Contracting
    Optimal Property Rights in Financial Contracting Kenneth Ayotte Patrick Bolton Northwestern University School of Law Columbia Business School October 2010 Abstract In this paper we propose a theory of optimal property rights in a …nancial contract- ing setting. Following recent contributions in the property law literature, we emphasize the distinction between contractual rights, that are only enforceable against the parties themselves, and property rights, that are also enforeceable against third parties outside the contract. Our analysis starts with the following question: which contractual agree- ments should the law allow parties to enforce as property rights? Our proposed answer to this question is shaped by the overall objective of minimizing due diligence (reading) costs and investment distortions that follow from the inability of third-party lenders to costlessly observe pre-existing rights in a borrower’s property. Borrowers cannot reduce these costs without the law’shelp, due to an inability to commit to protecting third-parties from redistribution. We …nd that the law should take a more restrictive approach to enforcing rights against third-parties when these rights are i) more costly for third-parties to discover, ii) more likely to redistribute value from third-parties, and iii) less likely to increase e¢ ciency. We …nd that these qualitative principles are of- ten re‡ected in observed legal rules, including the enforceability of negative covenants; fraudulent conveyance; corporate veil-piercing; and limits on assignability. We would like to thank law audiences at Columbia, Virginia, Northwestern, Berkeley, Chicago, Yale, USC and ALEA 2007, business/…nance audiences at Columbia, Haas, Fuqua, and Oxford.
    [Show full text]
  • The Yale Law Journal
    THE YALE LAW JOURNAL EDITORIAL BOARD EUGENE V. Rosrow Editor-in-Chief Sauoun KRIEGER, Comment Editor Louis Loss, Note Editor HEa'ry . RIGBY, Comment Editor OSCAR M. RuEDHAUSEN, Note Editor BERNARD E. BRANDES, ROBERT L SmFvs.so;N, Business Manager Article and Book Review Editor HmERT I. ADRONS GoRDoN L. FILEs ANDaEu Y. Roms JAcQuTi D. BIEmAN RAY B. HousToN Lurrna E. SMTH, Jr. AMoRY L BRADFORD LEONAPD B. NrrzonG CHAIUS J. TmEm=Au, MYRoN L. CARLsOx ROGER S. RANDOLPH SINEY H. WALL Subscription price $4.50 per year o0 cents per nmbcr Canadiansubscription price $5.oo per year; Foreign, $,5.25 per year Yale Law Journal Company, Inc., Box 401A, Yale Station, Ncw Haven, Conn. PROTECTION FOR DEBENTURE HOLDERS SEVmRAL spectacular collapses of top-heavy corporate structures have recent- ly revealed the dubious character of safety provisions in debentures." Deben- tures have been widely used,2 and they may perform an economic service in increasing the variety of media for financing. They provide the issuing corpor- ation greater freedom in the control of its assets than do mortgage bonds, and command smaller return than preferred stock, being theoretically less in risk. Debentures typically are unsecured obligations,3 but various devices have been used in the attempt to increase their apparent security. These devices often take the form of covenants between the issuer and the holder, or the issuer, holder and a trustee.4 One such covenant, commonly called the nega- 1. See notes 14, 22, 25, 60, and 64, infra. 2. An analysis of domestic debentures listed in MooDY's MANUALS OF INDUSrnmALS, PuuLic UTILITIES, and BANKS AND FINANCE for the years 1929, 1930, and 1931, pre- pared for Prof.
    [Show full text]
  • Secured Transactions Inside Out: Negative Pledge Covenants Property and Perfection Carl S
    Cornell Law Review Volume 84 Article 1 Issue 2 January 1999 Secured Transactions Inside Out: Negative Pledge Covenants Property and Perfection Carl S. Bjerre Follow this and additional works at: http://scholarship.law.cornell.edu/clr Part of the Law Commons Recommended Citation Carl S. Bjerre, Secured Transactions Inside Out: Negative Pledge Covenants Property and Perfection , 84 Cornell L. Rev. 305 (1999) Available at: http://scholarship.law.cornell.edu/clr/vol84/iss2/1 This Article is brought to you for free and open access by the Journals at Scholarship@Cornell Law: A Digital Repository. It has been accepted for inclusion in Cornell Law Review by an authorized administrator of Scholarship@Cornell Law: A Digital Repository. For more information, please contact [email protected]. SECURED TRANSACTIONS INSIDE OUT: NEGATIVE PLEDGE COVENANTS, PROPERTY AND PERFECTION Carl S. Bjerret INTRODUCTION ................................................. 306 I. A CR TQUE OF CuRRENT NEGATIVE PLEDGE COVENANT DoCTRINE ............................................... 308 A. Some Basics and a Challenge ....................... 308 1. Secured and Unsecured Debt ....................... 309 2. Function and Dysfunction of the Negative Pledge Covenant ........................................ 311 3. The Needlessly Excluded Middle .................... 313 B. The Negative Pledge Covenant as Mere Contract ... 315 C. Unpredictable Exceptions to the Mere Contract V iew ................................................ 318 1. Equitable Lien ..................................
    [Show full text]
  • How to Improve the Effectiveness of the World Bank's Negative Pledge Clause As a Legal and Policy Instrument
    How to Improve the Effectiveness of the World Bank's Negative Pledge Clause as a Legal and Policy Instrument. Maciej Chrnielewski McGill University, Montreal February 2005 A thesis submitted to Mc Gill University in partial fulfilment of the requirements of the degree of Masters of Laws. © Maciej Chmielewski, 2005 Library and Bibliothèque et 1+1 Archives Canada Archives Canada Published Heritage Direction du Branch Patrimoine de l'édition 395 Wellington Street 395, rue Wellington Ottawa ON K1A ON4 Ottawa ON K1A ON4 Canada Canada Your file Votre référence ISBN: 0-494-12670-1 Our file Notre référence ISBN: 0-494-12670-1 NOTICE: AVIS: The author has granted a non­ L'auteur a accordé une licence non exclusive exclusive license allowing Library permettant à la Bibliothèque et Archives and Archives Canada to reproduce, Canada de reproduire, publier, archiver, publish, archive, preserve, conserve, sauvegarder, conserver, transmettre au public communicate to the public by par télécommunication ou par l'Internet, prêter, telecommunication or on the Internet, distribuer et vendre des thèses partout dans loan, distribute and sell th es es le monde, à des fins commerciales ou autres, worldwide, for commercial or non­ sur support microforme, papier, électronique commercial purposes, in microform, et/ou autres formats. paper, electronic and/or any other formats. The author retains copyright L'auteur conserve la propriété du droit d'auteur ownership and moral rights in et des droits moraux qui protège cette thèse. this thesis. Neither the thesis Ni la thèse ni des extraits substantiels de nor substantial extracts from it celle-ci ne doivent être imprimés ou autrement may be printed or otherwise reproduits sans son autorisation.
    [Show full text]
  • International Section 7000.0
    International Effective date April 2009 Section 7000.0 The international sections focus on the exami- • For foreign governments and foreign political nation of risks and activities associated with entities, see section 3000.1, ‘‘Deposit international lending, financing instruments, and Accounts.’’ international banking. In addition to the sections • For international borrowed funds, see sec- that follow, information on the international tion 3010.1, ‘‘Borrowed Funds.’’ aspects of cash accounts, nostro accounts, for- • For foreign investments and foreign banking eign collections, investments, and borrowed organizations, see section 4050.1, ‘‘Bank- funds can be found in the applicable domestic Related Organizations.’’ sections: Additional information on international activi- • For foreign-currency cash accounts, see sec- ties can be found in the Bank Holding Company tion 2000.1, ‘‘Cash Accounts.’’ Supervision Manual, Trading and Capital- • For due from foreign banks–demand (nostro Markets Activities Manual, FFIEC Bank accounts) and foreign collections (cash letters, Secrecy Act Anti-Money Laundering Examina- return items), see section 2010.1, ‘‘Due from tion Manual, and FFIEC Information Technol- Banks.’’ ogy (IT) Examination Handbook. • For foreign investments, see section 2020.1, ‘‘Investment Securities and End-User Activities.’’ Commercial Bank Examination Manual April 2009 Page 1 International—Examination Overview and Strategy Effective date May 2005 Section 7000.1 Generally, the basic procedures used for the commitment to extend credit provided that cer- examination and verification of international tain collateral and documentary conditions exist. operations are the same as those used for other Foreign-exchange trading activities are similar domestic bank functions. However, some proce- to money-trading operations conducted at domes- dures are modified for different types of bank tic funding desks.
    [Show full text]
  • Stemming the Tide of Lender Liability: Judicial and Legislative Reactions
    Denver Law Review Volume 67 Issue 3 Article 5 February 2021 Stemming the Tide of Lender Liability: Judicial and Legislative Reactions William N. Medlock Follow this and additional works at: https://digitalcommons.du.edu/dlr Recommended Citation William N. Medlock, Stemming the Tide of Lender Liability: Judicial and Legislative Reactions, 67 Denv. U. L. Rev. 453 (1990). This Note is brought to you for free and open access by the Denver Law Review at Digital Commons @ DU. It has been accepted for inclusion in Denver Law Review by an authorized editor of Digital Commons @ DU. For more information, please contact [email protected],[email protected]. STEMMING THE TIDE OF LENDER LIABILITY: JUDICIAL AND LEGISLATIVE REACTIONS I. NAVIGATING THE WATERS OF LENDER LIABILITY Banks and lending institutions have recently found themselves en- gulfed in a wave of lender liability actions. Troubled borrowers have successfully turned to the doctrine of lender liability to assert their legal rights. Fraud,' breach of the implied obligation of good faith and fair dealing,2 breach of the fiduciary duty,3 liability for excessive control re- 1. See Richfield Bank & Trust Co. v. Sjogren, 309 Minn. 362, 244 N.W.2d 648 (1976) (Banks have a moral duty to the community in which they do business, and a bank which had actual knowledge of the fraudulent activities of one of its depositors was under an affirmative duty to disclose this knowledge before making a loan in furtherance of the fraud.); Farah Mfg. v. State Nat'l Bank, 678 S.W.2d 661 (Tex. Ct.
    [Show full text]
  • The ACT Borrower's Guide to LMA Loan Documentation for Investment
    The ACT Borrower’s Guide to LMA Loan Documentation for Investment Grade Borrowers Dutch Edition Produced by and December 2010 Introduction to the Dutch Edition In February 2010, Slaughter and May and the Association of Corporate Treasurers (the “ACT”) published an updated version of the ACT Borrower’s Guide to LMA Loan Documentation for Investment Grade Borrowers (the “Slaughter and May/ACT Guide”). LMA loan documentation is widely used in the Dutch loan market. This volume includes the Slaughter and May/ACT Guide plus a Dutch supplement for borrowers operating in the Dutch market, the “Dutch perspective on LMA Loan Documentation for Investment Grade Borrowers” (the “Dutch Supplement”). The Dutch Supplement contains guidance for borrowers reviewing draft facility agreements based on the LMA’s recommended forms and which are being entered into by Dutch Obligors or which are to be governed by Dutch law. We are grateful to the ACT and to Slaughter and May for permitting us to prepare the Dutch Supplement by reference to the Slaughter and May/ACT Guide. The comments in the introduction to the Slaughter and May/ACT Guide apply equally to the Dutch Supplement. In particular, it is written in general terms and its application to specific situations will depend on the particular circumstances. De Brauw Blackstone Westbroek N.V. December 2010 slaughter and may the association of corporate treasurers Contents 1. The ACT Borrower’s Guide to LMA Loan Documentation for Investment Grade Borrowers (produced by Slaughter and May, February 2010) 2. The Dutch perspective on LMA Loan Documentation for Investment Grade Borrowers (produced by De Brauw Blackstone Westbroek N.V., December 2010) 3.
    [Show full text]
  • SECURED TRANSACTIONS, EQUIPMENT FINANCE, and GUARANTEES Chapter 15 Is Concerned with Secured Transactions As Understood Under English Law
    PART D SECURED TRANSACTIONS, EQUIPMENT FINANCE, AND GUARANTEES Chapter 15 is concerned with secured transactions as understood under English law. It also examines certain matters that are similar to or associated with such transactions. After an introduction dealing with matters that are relevant in a general sense to secured transactions, it then moves to consider concepts of property, interests in property and dealings therein, future property and attachment of proprietary interests, accretions to and the proceeds of assets, the forms of security, floating charges, security in financial assets, security over intellectual property, security over credit balances, rights of set-off, Quistclose trusts, registration requirements for corporate security, priorities, subordination of unsecured debt, upsetting prior transactions, and enforcement of security. Chapter 16 is concerned with equipment finance, sometimes called title finance. It examines the methods by which a financier might acquire title in equipment, the forms of transaction by which equipment is made available by the financier to its customer, the financier’s statutory responsibilities for the equipment and the effectiveness of attempts to exclude or restrict that responsibility, the rights and obligations of the parties following a default by the customer, the effect of the customer’s insolvency, the financier’s rights against third parties, and insurance arrangements. Chapter 17 concerns guarantees. It looks at the nature of a guarantee as contrasted with other types of instrument, preliminary matters in taking a guarantee, State guarantees under EC law, the types of guarantee, Export Credits Guarantee Department (ECGD) cover, the rights of the guarantor, reasons for the discharge of the guarantor, and provisions to save the beneficiary’s position under the guarantee.
    [Show full text]