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The state of cross-class cramdown in the UK
Part 26A, introduced into the Companies Act 2006 by the Corporate Insolvency and Governance Act 2020 (CIGA), is an important tool to assist companies in financial difficulties, building on the Pt 26 scheme of arrangement. Part 26A contains a relatively thin set of statutory provisions that leave a great deal to be fleshed out by the courts. Judges have risen to the occasion and have begun to develop a structured approach to Pt 26A cases. There are, however, some difficult issues that are emerging in the process. This article aims to pull together a shopping list of these issues, to promote conversation among scholars, practitioners, and policy makers about the way forward.
25 November 2024Marshalling by apportionment: a developing doctrine
Marshalling as an equitable doctrine got into its stride as long ago as the 1700s, and the concept is one that has been developed throughout the common law. The doctrine (or sub-doctrine) of marshalling by apportionment demonstrates that marshalling still holds great potential for further development where there is a first-ranking secured creditor with security over multiple assets and, below it, two or more equally ranking secured creditors with respective interests in one or other of those assets. This article considers marshalling by apportionment in light of the Australian case Callisi Pty Ltd v Sterling & Freeman Advisory Pty Ltd [2023] VSC 300.
24 November 2024Knowing is half the battle: the economic torts and lender liability
Lenders’ decisions will often prejudice third parties that have dealt with their borrowers. The third parties might then seek redress from the lenders, in a claim under one or more of the economic torts of: (i) inducing a breach of contract; and (ii) unlawful means conspiracy. This article summarises the key requirements for liability under each of the torts, together with the potential risks that lenders should be aware of in relation to each tort. It then considers the potential steps that lenders can take to mitigate their risk.
24 November 2024How do investors make returns on preferred equity?
In this article, we look at the key features of preferred equity, the fundamental question of how investors make returns and its relationship with Holdco debt.
24 November 2024The asset sales covenant: sometimes when it’s there it’s barely there at all!
In this article Michelle Gilmore-Parry explains how the asset sales covenant in top-tier European leveraged financings has evolved and discusses the key considerations for lenders when reviewing the asset sales covenant and related definitions in leveraged finance documentation.
24 November 2024Crypto exchanges: an update on D’Aloia
In this article Nik Yeo discusses how the recent detailed judgment in D’Aloia v Persons Unknown & Bitkup clarifies and extends some previously established contractual and proprietary principles in relation to liability of crypto exchanges to victims of crypto fraud.
24 November 2024Forewarned is forearmed: thoughts on the impact of an IT systems outage on security registrations at Companies House
The registration of charges granted by UK Companies and LLPs at Companies House is a crucial step in securing their validity and the priority of security interests over the assets of a chargor. However, the strict 21-day filing deadline under the Companies Act 2006 leaves little room for error or delay, including in the event of an IT systems outage affecting the electronic filing services provided by Companies House of third-party portals.
In this article, the authors examine some of the recent incidents that have highlighted the potential vulnerabilities of electronic filing and offer some practical tips and considerations for parties with an interest in a charge in the event there is an IT outage during the period allowed for the registration of a charge.
The Financial Conduct Authority, the court and the Financial Ombudsman Service: who is in charge?
There has never been a more uncertain time for consumer and motor finance firms. There are more and more challenges to the ways in which this multi-billion-pound market operates. These come from consumers, the Financial Conduct Authority, the court and the Financial Ombudsman Service. Firms could be forgiven for feeling they are in a never-ending game of Russian roulette with each actor taking their respective spin of the revolver. So, it begs the question, who is going to come out on top and, ultimately, who is in charge?
24 November 2024Growing up or coming down to earth? Broader trends in the US CRT market
The pace of deals in the US “credit risk transfer” (CRT) market through the end of 2023 spurred expectations that the US market would catch up to its European “significant risk transfer” (SRT) counterpart, promising more deal volume, issuers and investors. While investor demand continues unabated and some new issuers have entered the market, the pace of growth is cautious, and many transactions are now executed in the form of bilateral CDS transactions that provide more certainty of execution and timing in comparison to CLNs issued by banks or SPVs sponsored by banks. At the same time, new questions are arising from a regulatory focus on bank-financed leverage to CRT trades and uncertainty about the future direction of the Basel capital framework.
24 November 2024UK prospectus regime reform: potential impact on securities litigation
Following the recommendations of the Hill Review of the UK Listing Regime and certain consequential legislative changes, the FCA has now published its proposed new prospectus rules CP24/12, Appendix1 as part of the UK's new public offers and admissions to the trading regime – the biggest shake-up to the disclosure framework since 2005. While the driver of the rule changes is the desire to attract and retain more listed companies in London, they are likely to have an impact on securities litigation.
In this article, we consider the potential impact of the proposed new prospectus rules on claims brought by shareholders.
