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DIP financing in US Chapter 11 cases: how sponsors are utilising equity conversions to obtain recoveries in reorganised debtors
This article examines sponsor-provided debtor-in-possession financing that converts into equity in the reorganised debtor upon emergence from bankruptcy, including the consequences of, and recent challenges to such sponsor-led convertible financing.
29 June 2024The mysterious pari passu principle
We know that Lord Justice Snowden’s landmark judgment for a unanimous Court of Appeal in Adler earlier this year1 emphasised the presumptive importance of the pari passu principle. But what does this principle amount to? What does it require? The term “pari passu” is used in judicial and textbook writings to refer to no fewer than four different principles. Regrettably, this is a reliable recipe for confusion. Three of these principles relate to distribution of value from the insolvency estate but are very different from each other, while the fourth is a principle of conservation rather than distribution. The undifferentiated and unreflective use of the term “pari passu” for one or other of these four principles leads to mistakes of both analysis and decision. This article explains the four principles, outlines the ways in which they differ, highlights the confusion resulting from not distinguishing amongst them, and argues that the term “pari passu” should be restricted to only one of the four.
29 June 2024Shortening the settlement cycle to T+1: not if but when
This article introduces the policy debate as regards a further reduction of the settlement cycle. The US has moved to T+1 in May 2024, with the UK and EU making plans to follow suit.
28 June 2024Amendments to the Payment Services Regulations to combat Authorised Push Payment Fraud
The Treasury has announced its intention to amend the Payment Services Regulations 2017 (PSR). As a means of combatting authorised push payment (APP) fraud, banks will be given the power to delay the transferring of funds where they have established that there are reasonable grounds to suspect that the payment order has been placed subsequent to fraud or dishonesty. When utilising this discretion, they must inform their customer, who can then decide whether to rescind their instruction. Although the new power may prevent many instances of fraud, it is not without its problems, and this article discusses six sets of issues.
28 June 2024Everything settled? Risks for buyers trading on the secondary debt market
Trades on the secondary debt market typically go wrong because the lender is unable to settle the trade satisfactorily. In this article Matthew Watson considers the circumstances in which a selling lender may be unable to settle a trade and the position of the buyer in that event.
28 June 2024Electronic trade documents: what is a reliable computer system? and problems in contracting for a “reliable system”: clarification and correction
Paul Marshall offers a clarification and correction to two parts of his recent article of the above title.
28 June 2024Structuring loan buybacks
In this article the authors consider the structure of loan buybacks with a consideration of the documentary changes made by the Loan Market Association (LMA) as well as some of the approaches that have evolved in the market to address buybacks.
13 June 2024The issues with interest calculations in arbitration awards
There is often much angst about choosing the right method of calculating interest on an arbitral award and, indeed, which interest rate to use. There are no criteria that can be applied a priori to assist in the selection in a particular case. Rather, the key is to determine what monetary return the injured party might have earned had they had use of the arbitral award over the relevant period of time. This amount can then be readily translated into a method and interest rate to suit the arbitrator.
13 June 2024The Pensions Regulator’s new teeth: how might they bite lending transactions?
This article outlines how risks relating to defined benefit pension scheme liabilities affect financing transactions, the relevant provisions of the new Pension Schemes Act 2021 and the extent to which these provisions might result in changes in practice.
13 June 2024The impact of Brexit on the UK and European legal professions
This article explores the implications of Brexit for the practising rights of UK barristers, solicitors and advocates in the EU and for European lawyers in the UK, with a focus on England and Wales. Although the UK’s withdrawal from the EU has resulted in some challenges for European lawyers, England and Wales remains an open legal market. For UK lawyers in Europe the situation varies considerably by member state and it is incumbent on lawyers to carefully research practising rights and immigration rules ahead of travel.
13 June 2024
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