In this article the authors discuss the fundamental differences, from a Singapore law perspective, in how creditors might be treated in the insolvency of a real estate investment trust (REIT) compared to the insolvency of a company and explore some possible structures and mechanisms which might enable a REIT and its creditors to restructure or wind up a REIT synthetically. (In the UK, a REIT is a UK company limited by shares, with separate legal personality, so the issues raised in this article do not apply to UK based REITs).
19 March 2024This article considers the effect of sanctions imposed by the UK following Russian’s invasion of Ukraine in February 2022 on litigation, commercial transactions and insolvency, via an overview of a series of decisions of the English High Court in these areas.
19 March 2024This article considers a particular aspect of the insolvency risk to investors in UK covered bonds. Specifically, it considers whether the transfer of assets from the Issuer to the SPV to create the cover pool, including any over-collateralisation, can be impugned as a transaction at an undervalue such that it may be reversed on application to the court by the administrator or liquidator of the Issuer under s 238 of the Insolvency Act 1986. Such risk has long been appreciated. However, the issue has been the subject of fresh comment because of the intended revocation of the Regulated Covered Bonds Regulations under the Financial Services and Markets Bill and the opportunity for a new regulatory regime with a different approach to risks of this kind.11 1
19 March 2024This article considers: (i) the delicate balance between competing interests and incentives in collateralised loan obligations (CLOs) with regard to restructurings of credit-impaired portfolio (broadly syndicated leveraged) loans; and (ii) recent innovations and changes to CLO documentation driven by specific well-publicised examples of leveraged loan restructuring.
19 March 2024As a result of EU “legacy” provisions, covered bonds receive a clearly preferential regulatory treatment in the UK, when compared with other similar instruments, especially securities issued as part of a “true sale” securitisation. This article questions the extent to which such treatment is justified, particularly following a covered bond issuer insolvency event, when the risks are arguably greater than those present in “true sale” securitisation structures.
19 March 2024This article examines the position on the jurisdiction’s approach in France, Germany, Italy and Luxembourg to preserve security interests and guarantees when the underlying obligation (governed by English law) is varied, for example when the maturity date of an existing facility is extended. We think a brief analysis may be useful to understand if and how security interests and/or guarantees, provided by overseas parties incorporated in the abovementioned jurisdictions, still continue to be in force and whether additional formalities will need to be performed to avoid the additional obligations not being covered by the security or guarantee in case of an amendment or variation of the underlying obligation.
19 March 2024We consider the practical steps and considerations for creditors when faced with a potential event of default (EOD) under their credit documentation. We also assess the consequences for a creditor in taking enforcement action in reliance on an EOD that has not actually occurred, cannot be relied on, or is disputed.
19 March 2024In this article, Raquel Agnello KC considers the enforceability of transactions involved in the act, course of conduct or failure to act which is relied upon by the Pensions Regulator when imposing a criminal sanction or civil penalty under the Pension Schemes Act 2021 (PSA 2021).
19 March 2024An enabling legal framework is widely regarded as a prerequisite for a well-functioning warehouse receipt system that can facilitate transactions with goods, including access to finance. Over the past few years, several countries have initiated legal reform to modernise their legal frameworks governing warehouse receipts in general, or to accommodate the issuance and transfer of electronic warehouse receipts in particular. The future UNCITRAL/UNIDROIT Model Law on Warehouse Receipts will offer guidance to legislators in developing a legal framework that reflects best practices and embraces the most recent developments in business models and technology.
19 March 2024In the wake of the receivership of Silicon Valley Bank and the Signature Bank failures, Swiss regulators brokered a deal to stabilise Credit Suisse (CS). The acquisition of CS by UBS was the first use of the tools designed to end too big to fail. The write off of CS’s AT1 capital highlights the discretion available to regulators to deviate from the hierarchy of claims when a bank is distressed.
19 March 2024