Feature

The potential impact of the new UK Listing Rules on securities litigation

The radical restructuring of the UK listing framework by the Financial Conduct Authority (FCA) has shifted greater risk to investors. This article examines the potential impact of the overhaul of the regime on future claims brought by shareholders under ss 90 and 90A of Financial Services and Markets Act 2000.

Money laundering in the supply chain: the use of “adequate consideration” to “cleanse” criminal property

Section 329 (2)(c) of the Proceeds of Crime Act 2002 exempts a person from criminal liability where criminal property is acquired for adequate consideration. Previous authority appeared to suggest that the provision of adequate consideration had the effect of "cleansing" criminal property. Thus, anyone who subsequently dealt with the property would not commit a money laundering offence. 

In Rex (on the application of World Uyghur Congress) and National Crime Agency  [2024] EWCA Civ 715, 26 June 2024  the Court of Appeal rejected this interpretation. In a decision which will have significant implications for businesses and professional advisors, the court held that the “adequate consideration” exemption is no more than a personal exemption. It has no impact on the status of the property as criminal property or recoverable property. It does not therefore operate to cleanse tainted property. 

From London to Berlin: insights on taking security over receivables in Germany

This article explores some of the complexities and key considerations for lenders and legal practitioners when taking security over receivables in Germany. We consider: (i) the types of security that can be taken over receivables and their key features/formalities; (ii) how to navigate contractual restrictions on transfer; (iii) potential pitfalls when taking security over receivables; and (iv) secured creditors’ priority when realising security over receivables in an insolvency.

Lost in the labyrinth: the Court of Appeal in KVB Consultants

The decision of the Court of Appeal in KVB Consultants Ltd & Ors v Jacob Hopkins McKenzie Ltd & Ors  [2024] EWCA Civ 765 has important implications for anyone who deals with, appoints or acts as an appointed representative (AR). It applied a number of principles from existing case law but reached a surprising conclusion regarding how a principal can limit the responsibility it takes for its AR.

How to address the “possession or control” issue in the UK Financial Collateral Arrangements

This article examines the legal uncertainties surrounding collateralisation in the UK, focusing on the Financial Collateral Arrangements (No.2) Regulations 2003, SI 2003/3226. It explores the challenges posed by the “provision” of collateral and the “possession or control” test, especially in practical portfolio management and derivatives markets. Through an analysis of key case law, the article identifies inconsistencies and recommends separate definitions for “possession” and “control”. These proposed reforms aim to align legal definitions with modern financial practice, thereby enhancing legal certainty, reducing systemic risk, and supporting the resilience of financial markets.

Contracting out of the default discharge rule

This article considers whether it is possible to contract out of the rule that the discharge of one surety results in the discharge of all co-sureties and whether such a clause in a contract complies with the Unfair Contract Terms Act 1977, in light of Cynergy Bank Ltd v Dinglis  [2024] EWHC 754 (Comm).

The limitations of limited recourse

This article unpacks the risks for lawyers advising on financing transactions which are, on their face, limited recourse transactions, looking at alternative routes to recourse which funders may have against the operating companies, their directors and shareholders who utilise these financing structures. The underlying security assets are typically some or all of real property, shares, receivables and bank accounts.

Country risk in unprecedented times: a precedent for cross-border loan documentation?

While country risk cannot be avoided in cross-border transactions entirely, it can be effectively mitigated through careful transaction structuring and tailored contractual protections. Market standard loan agreements will include a number of exit rights and cost recovery provisions which may be helpful to a lender exposed to country risk and can be negotiated to meet the needs of the particular transaction. It is important to strike a balance between the effective management of country risk for lenders, and a contractual framework that provides the borrower with the required economics and flexibility to operate with certainty.

The rise of NAV financings: is an equity contribution really “equity”?

Leveraged buyouts have traditionally been funded principally by debt secured against the collateral of the asset being acquired (typically borrowed by the acquisition special purpose vehicle, onward lent, and secured against the underlying collateral), combined with a sponsor equity commitment. To this, debt and equity commitment letters are commonplace within acquisition processes, and there is a clear expectation – both from sellers, and the acquisition financing provider – that the sponsor is committing true equity into the structure. However, as rising costs of capital have made investment returns more challenging, sponsors have looked to more creative ways to assist in levering their equity contribution, including by way of the incurrence of NAV financings. NAV financings used in this manner can mask the underlying nature of the equity commitment and, in a downside scenario, potentially lead to significantly more complex, and uncertain, workouts.

Accelerating the green transition: European Energy’s landmark portfolio construction financing of renewable energy projects

In this article the authors describe the key features and unique structural considerations and challenges of European Energy’s landmark portfolio construction facility, which was put in place in November 2023 after a two-year bottom-up design, documentation and bank credit approval process.