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Re-imagining the phrase “pursuant to the Finance Document” and considering the ICA’s wide power to restrain junior challenge
In this article, the authors consider the judgment in Re Arboretum Devon (RLH) [2021] EWHC 1047 (Ch) and question the judge’s finding that the borrower’s obligation to “repay” arising by reason of a restitutionary claim in unjust enrichment constituted a “Secured Liability” arising “in accordance with” the transaction and was therefore secured.
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 2024CNH v Cleveland: impact of Court of Appeals decision on out-of-court European high yield restructurings
In 2020, a US court determined that minority noteholders’ rights to receive principal and interest on their notes survived a “strict foreclosure” and cancellation of notes, undertaken by the indenture trustee at the direction of a majority of noteholders. In this article, we consider the potential effect of that decision on out-of-court, majority-led share pledge enforcements, which are a key debt-restructuring tool in the European market.
13 June 2024Are banks obliged to disclose credit adjustment spreads to SONIA?
LIBOR will be replaced by SONIA from the beginning of 2022. With SONIA rates typically lower than LIBOR, banks will seek to make up the difference by application of a Credit Adjustment Spread (CAS), likely to be calculated by reference to the median difference between LIBOR and SONIA over the previous five-year period. This article considers the extent to which banks will be required to disclose the existence of the CAS and its method of calculation to customers in the light of previous findings by the court of the lack of an obligation on banks to disclose the Credit Line Utilisation (CLU) to customers.
13 June 2024Battle of the acronyms: GDPR vs AI – automated decision-making by ride-hailing apps
The Amsterdam District Court has recently considered three cases involving ride-hailing apps which throw into focus the nature of automated decision-making processes, particularly those which involve Artificial Intelligence (AI) and machine learning (already used by banks across a range of business areas). Although the issues arose in a GDPR context, it is instructive to see how the court addressed them in Applicants v Uber BV (case number C/13/692003/HA RK 20-302), Applicants v Uber BV (case number C/13/687315/HA RK 20-207), and Applicants v Ola Netherlands BV (case number C/13/689705/HA RK 20-258).
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 2024
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