Competition concerns in liability management exercise disputes

This Spotlight article considers the competition issues emerging in the context of liability management exercises and similar restructurings, in which a distressed company’s debt is reorganised to the disadvantage of creditors left outside the deal. Drawing on two recent disputes – Selecta and Thames Water – it explains how a challenge by excluded creditors would fall under Chapter 1 of the Competition Act 1998 and works through two elements such a claim would involve: the theory of harm advanced and the market definition needed to support it. It sets out the considerations that would have an impact on defining a market in this setting, whilst recognising that neither of the discussed disputes has yet required a court to do so.