Feature
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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 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.
English schemes of arrangement, restructuring plans, insolvency proceedings and the impact of sanctions legislation
This article explores the treatment of sanctioned creditors under English schemes of arrangement and restructuring plans, considering the impact of sanctions legislation on class structures and voting, the receipt of consideration and the impact of disenfranchisement in the context of bond restructurings. Separately, it also briefly considers the treatment of voting rights of sanctioned creditors in bankruptcy proceedings.
24 November 2024Draft Property (Digital Assets etc) Bill: laying the foundations for the development of the common law
In this article, Darragh Connell considers the wording of the draft Property (Digital Assets) Bill and the matters that the legislature has left for the common law to develop.
24 November 2024Loans involving companies limited by guarantee: key issues for consideration
This article summarises key issues relevant to lenders and borrowers in loan financings that involve companies limited by guarantee as a borrower, guarantor and/or security provider.
24 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 2024
