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2020 vision: expanding the toolbox for European restructurings
Whilst 2020 will be remembered for less positive reasons, restructuring professionals may remember it for the creation of: (i) the “Restructuring Plan” under the UK’s Corporate Insolvency and Governance Act 2020 (CIGA 2020); (ii) the Dutch scheme under Wet homologatie onderhands akkoord (Dutch Scheme); and (iii) the German scheme under the StaRUG (German Scheme). Each bears similarities with the tried and tested English scheme of arrangement but has adopted certain features from the US Chapter 11 process. This article covers some of the important differences between each process that practitioners should be aware of.
13 June 2024First among equals: priming debt in leveraged capital structures
In this article the authors examine how US transactions that rank new money claims senior to existing lenders were structured and assess the options for European borrowers looking to achieve similar results.
13 June 2024Ipso facto clauses: the international dimension
This article considers the new provisions in the Corporate Insolvency and Governance Act 2020 (CIGA) on so-called ipso facto clauses and how those provisions interact with cross-border contracts.
13 June 2024Creative uses of collateral: opportunities for leveraged companies
Credit to leveraged companies normally ties to the cash flow of the borrower’s business. But the coronavirus pandemic has wreaked havoc on the financial standing of many borrowers, upending their ability to predict cash flows and prompting them to raise capital against hard assets’ liquidation value. In the process, new transaction structures have emerged that use collateral more creatively to maximise borrowing capacity.
13 June 2024Payments by mistake: when will the discharge of an existing debt be a defence to a claim for repayment?
On 11 August 2020, Citibank made a payment of US$900m to the lenders under a syndicated loan agreement, in what the US court later described as “one of the biggest blunders in banking history”. When Citibank sued for the return of the money, the US court held that it was not entitled to repayment because the payments discharged an existing debt and the recipients had no notice of the mistake. That decision, on 16 February 2021, has understandably caused consternation among bankers. One report described the decision as “eye-watering” and one that “will strike terror into earnest hearts in the global trust and agency community”. London, of course, is another global financial hub and the industry might be equally interested to know how this dispute might have been determined as a matter of English law. This article addresses that question.
13 June 2024Does situs actually matter in disputes concerning bitcoin?
There has been considerable interest in the recent ruling of the High Court in Ion Science Ltd v Persons Unknown (unreported, 21 December 2020)1 as the first in which an English court has considered the question of situs in respect of a Bitcoin. Long described as an “intractable question”, many have taken the case to stand potentially for the proposition that the situs of a cryptoasset is the place where its owner is domiciled.
13 June 2024Scheme meetings in a global pandemic
COVID-19 has fundamentally altered how companies are able to hold meetings of their shareholders and creditors. This article explores how the courts have dealt with these disruptions in the context of schemes of arrangement under Pt 26 of the Companies Act 2006, and under the new restructuring plan regime under Pt 26A of the Companies Act 2006. It demonstrates that the courts have adopted a flexible approach, enabling meetings to be held even where members or creditors cannot physically come together due to social distancing restrictions.
13 June 2024RFR Term Rates in a post-LIBOR landscape
The 5 March 2021 announcement by the Financial Conduct Authority (FCA) signalled the definitive end of LIBOR. With attention turning to the post-LIBOR landscape, we examine the key features of forward-looking rates derived from RFRs (RFR Term Rates) as an alternative to other rates derived from RFRs and the circumstances and considerations for their use.
13 June 2024The proposal for a regulation on markets in crypto-assets: disjuncts between regulatory and private law
This article considers the EU Commission’s Proposal for a Regulation on Markets in Crypto-Assets. Premised on what is submitted to be a disjunct in the approaches taken to regulatory and private law rights and obligations, it considers the consequent private law issues arising in misrepresentation, negligence, proprietary interests, and private international law.
13 June 2024LIBOR transition: managing customer relations
This article seeks to identify where friction points in borrower/lender relations may arise during the LIBOR transition process and how they may result in litigation. It then outlines some prudential measures banks should take to minimise the risk.
13 June 2024
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