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Ipso 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 20242020 vision: expanding the toolbox for European restructurings
Whilst 2020 will be remembered for less positive reasons, restructuring professionals may remember it for the creation of: (i) the “Restructuring Plan” under the UK’s Corporate Insolvency and Governance Act 2020 (CIGA 2020); (ii) the Dutch scheme under Wet homologatie onderhands akkoord (Dutch Scheme); and (iii) the German scheme under the StaRUG (German Scheme). Each bears similarities with the tried and tested English scheme of arrangement but has adopted certain features from the US Chapter 11 process. This article covers some of the important differences between each process that practitioners should be aware of.
13 June 2024Does situs actually matter in disputes concerning bitcoin?
There has been considerable interest in the recent ruling of the High Court in Ion Science Ltd v Persons Unknown (unreported, 21 December 2020)1 as the first in which an English court has considered the question of situs in respect of a Bitcoin. Long described as an “intractable question”, many have taken the case to stand potentially for the proposition that the situs of a cryptoasset is the place where its owner is domiciled.
13 June 2024Roll-up rescue financing in Singapore: giving old debt senior priority
At its introduction into Singapore’s restructuring laws in 2017, rescue financing was heralded as value enhancing and associated with a higher probability of successful recovery for distressed companies. This article discusses the application of the rescue financing regime, including the first instance of a roll-up, and the way forward for rescue financing in Singapore.
13 June 2024The European Commission’s Digital Finance Package from the perspective of private law
This article examines the interplay between national (private) law and the legislative measures subsumed under the European Commission’s Digital Financial Package (DFP or the Package). For the reasons explained in this article, the Package may not attain, in full, its harmonisation and single market policy objectives, to the extent that it leaves the question of the legal attributes of crypto-assets to the discretion of national legislators and to the different legal traditions of the EU member states in matters of private law, rather than settling them centrally, possibly by reference to a limited-purpose European private law.
13 June 2024Steaming away from Canada Steamship? The interpretation of exemption clauses in finance documents
Judicial statements over the years have led some commentators to detect a trend away from the use of anything other than general contractual principles in the interpretation of exclusion clauses. Of the special principles at risk, perhaps the best known is the three-stage framework formulated by the Privy Council in 1952 in Canada Steamship Lines Ltd v The King. This article examines recent case law and considers whether that trend may have run its course.
13 June 2024Moving towards digital capital markets: the EIB’s public blockchain bond
In April 2021, the European Investment Bank (EIB) issued its first ever notes in digital form on the Ethereum public blockchain. This was a milestone transaction in several respects: as a true financing using a blockchain register rather than a proof of concept; through the use of Central Bank Digital Currency at issue; and through the development of documentation to address the new technology. This article summarises the key features of the issuance and its relevance to future digital bond issuances.
13 June 2024An introduction to the Business Banking Resolution Service
This article will discuss the new service and its eligibility criteria, the formalities of bringing a complaint, and also how complaints will be determined. Comparisons will be drawn against the Financial Ombudsman Service as we touch upon the relationship between the two schemes. We will finally consider the appeals procedure and the potentially litigious issues that may arise after a final appeal.
13 June 2024
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