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The new pre-pack regulations and the impact on secured lenders
If secured lenders (who fall within the definition of connected persons) and their advisers engage the evaluator prior to the commencement of administration and ensure open communication lines among themselves, the evaluator and the would-be administrator then the goal of increasing transparency in the pre-pack process would likely be advanced in a manner consistent with the efficient execution of a pre-pack sale.
13 June 2024Agent banks’ duties in the era of cov-lite loans and infinite liquidity
In this article Lisa Lacob considers whether the current cov-lite environment changes the analysis on the extent of agent banks’ duties, particularly where action or inaction may favour one side.
13 June 2024Restructuring debt in the COVID-19 pandemic: class composition in creditors’ schemes
In this article the authors consider recent developments in relation to class composition in creditors’ schemes. With reference in particular to Re Codere Finance 2 (UK) Limited [2020] EWHC 2441 (Ch), they consider whether benefits conferred “outside” the scheme in lock-up agreements may fracture a class of creditors, and the consequences for companies seeking to restructure debt. They also consider whether the recent introduction of Pt 26A restructuring plans may change the focus of class composition analysis going forward.
13 June 2024Uncertain times: COVID-19 and the use of “business days” to measure time under finance agreements
Over the past twelve months, governments have implemented various measures that have created uncertainty around the meaning of the term “business day”. This is further complicated by the historic English law approach, which emphasises the predeterminable nature of a “business day” and discourages investigation into the particular facts of the case. This stands in tension with definitions (including the LMA standard definition) which focus upon banks actually being open for business on a given day. This article considers how, in these circumstances, parties may be able to increase certainty in relation to the way that time is calculated under finance agreements.
13 June 2024The road to Banking Union
Bail-in is at the heart of the post-crisis reform in dealing with failing banks. But in the euro area bail-in must pass a public interest test before it can be used, and bail-in has become the exception not the norm. The norm remains “winding up of the entity under normal insolvency proceedings”. The public interest test should be reversed. The use of bail-in to achieve orderly liquidation under a solvent wind-down strategy should serve as the presumptive path for handling banks that are deemed to be “failing or likely to fail”. Together with the backstop from the European Stability Mechanism (ESM) for the Single Resolution Fund (SRF), the reversal of the public interest test will open the door to the creation of the Single Deposit Guarantee Scheme (SDGS) and to the completion of Banking Union.
13 June 2024How to get recognised: cross-border recognition of insolvency and restructuring proceedings post-Brexit
This article summarises the post-Brexit position regarding inbound and outbound recognition of insolvency and restructuring proceedings between the UK and the EU.
13 June 2024Lenders’ duties in the “twilight zone”, after default but before appointment or enforcement
In this article we consider what duties are owed by a lender in the period after default by the borrower, but before any appointment or other enforcement steps are taken. We do so in the context of the question of what duties are owed in relation to restructuring services or actions of the lender having regard, in particular to the recent decision and observations of the Court of Appeal in Morley Estates v Royal Bank of Scotland [2021] EWCA Civ 338. We start by considering the question of why there is a need for protection and then seek to identify the case in favour of lenders’ duties being owed in the context of the decision made in Morley Estates v RBS at first instance and in the Court of Appeal.
13 June 2024Dana Gas PJSC v Dana Gas Sukuk: how should Islamic financial law apply in multi-jurisdictional litigious disputes?
Holders of Islamic financial instruments (often creditors) carry well-justified expectations that offerors and issuers (often borrowers) will observe the highest levels of integrity, transparency and proper (non-prevaricatory) conduct. The discussion surrounding the legal ramifications and impact on the Islamic financial services industry of Dana Gas PJSC v Dana Gas Sukuk Ltd and others [2017] EWHC 2928 (Comm) (17 November 2017) (Dana Gas PJSC) is therefore still incomplete. The High Court’s decision to rule the Purchase Undertaking valid and enforceable, regardless of whether the Mudarabah Agreement governing the Sukuk had been Shariah complaint or not, barely scratched the surface. Indeed, if anything, what has come out of the High court in Dana Gas PJSC is that not much has been said in a manner which would have addressed fundamental questions pertaining to Sukuk in a norm-setting way.
13 June 2024LIBOR transition: ISDA Protocol first mover disadvantage and other international perspectives
In this article, the authors consider some of the key international developments in Q4 2020 relating to LIBOR transition. They conclude that parties should exercise significant caution before signing up to the ISDA 2020 IBOR Fallbacks Protocol.
13 June 2024A new Consumer Duty in financial services: a significant change, or more of the same?
The FCA, after prompting by Parliament, is pressing ahead with its proposals for a new consumer duty of care like approach in financial services, albeit in a way that does not in fact impose a duty of care. Instead, changes to the existing Principles of Business are being suggested, which will sit at the head of a pyramid of measures designed to bring about change. This article considers the likelihood that change will in fact be achieved.
13 June 2024
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