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Civil remedies for abusive short selling
In this article Jonathan Dawid considers how victims of abusive short selling can seek legal redress against those responsible for their loss.
13 June 2024Take it on trust: “relevant funds” under The Payment and Electronic Money Institution Insolvency Regulations 2021
In this article, Timothy Sherwin considers the provisions concerning the return and stewardship of “relevant funds” under the new Payment and Electronic Money Institution Insolvency Regulations 2021. The article was written before the High Court’s judgment in In the matter of ipagoo LLP (in administration) [2021] EWHC 2163, which, in contrast to In Re Supercapital [2020] EWHC 1685 (Ch), determined that no statutory trust exists over safeguarded funds held under the Electronic Money Regulations 2011. The Ipagoo decision does not overrule Supercapital and relates to different legislation but the inconsistency in approach means that the existence of a statutory trust may not now be the correct legal position. (A case analysis on the ipagoo decision will follow in the October edition).
13 June 2024Scheme meetings in a global pandemic
COVID-19 has fundamentally altered how companies are able to hold meetings of their shareholders and creditors. This article explores how the courts have dealt with these disruptions in the context of schemes of arrangement under Pt 26 of the Companies Act 2006, and under the new restructuring plan regime under Pt 26A of the Companies Act 2006. It demonstrates that the courts have adopted a flexible approach, enabling meetings to be held even where members or creditors cannot physically come together due to social distancing restrictions.
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 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 2024LIBOR transition: managing customer relations
This article seeks to identify where friction points in borrower/lender relations may arise during the LIBOR transition process and how they may result in litigation. It then outlines some prudential measures banks should take to minimise the risk.
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 2024The court’s discretion in relation to the Pt 26A cram down
This article explains that a fundamental purpose of the court’s discretion whether to exercise its cram down power under the new Pt 26A process now found in the Companies Act 2006 would be to ascertain whether the dissenting class was promised a just and equitable distribution of the restructuring surplus, ie the value expected to be preserved and perhaps created by the proposed plan itself. By way of comparison, Chapter 11 of the US Bankruptcy Code, which contains the best-known cram down mechanism, requires the court to ensure a “fair and equitable” treatment of members of the dissenting class. In the US, however, the much-misunderstood Absolute Priority Rule (APR) supposedly governs this exercise. This article shows that the APR is untenable and is honoured as much in breach in US practice as in observance. Similarly, the cram down powers under the new Dutch and the proposed German restructuring regimes also envisage “exceptions” to the APR which in practice may well overwhelm the rule. Understanding why the APR cannot and should not govern the distribution of the restructuring surplus goes a considerable way to establishing that distribution of the restructuring surplus by reference to the relative contributions to the restructuring surplus by the dissenting and all junior classes provides the appropriate starting point. The article also considers the appropriate treatment of “new money” and “sweat equity”, and of classes excluded from the plan.
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 2024Re-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 2024
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