Transnational Corporate Restructuring

Résumé du document

Droit appliqué à la finance (International Financial Law)
1.Analytical framework
2.Contractual Underpinnings – Corporate and Financing Structures
3.The menu approach
4.(Pre-pack) administration and scheme of arrangement
5.Collectivisation and Privatisation II – 11 USC Chapter 11 and §363 sales, comparative analysis
6.Bank resolution

Extraits

[...] This is why the SoA approach seems in the situation at stake here relevant, in order to help Sunergy by an early restructuring to avoid insolvency. The SoA helps indeed on the one hand to avoid stigma associated with defaults or insolvency, on the other hand, to prevent payment defaults that could worsen the financial situation of Sunergy. The sanctioned SoA by the High Court can extend even to restructure the debts of a company as long as competing interests of creditors and shareholders are both taken into consideration. [...]

[...] Administration Where a company is or is likely to become unable to pay its debts, an administrator can be appointed in order to rescue the company, or by default to seek the best achievable result in the interest of the debtor company's creditors as a whole, or in the worst-case scenario to secure the company's property for distribution to secured or preferential creditors. The administration will end automatically after one year unless extended by court order or with the consent of the creditors. Extensions are often required in complex cases. Company voluntary arrangements The CVA insolvency process is an informal but binding agreement between a company and its unsecured creditors to compromise the company's debts, made with the aim of allowing companies in financial difficulties to avoid liquidation. [...]

[...] At the other end, lie liquidation or reorganisation procedures. There exist also intermediate corporate rescue mechanisms whereby contractual arrangements are supported by restructuring principles for or are implemented through the intervention of courts or administrative authorities such as the hybrid mechanism of the scheme of arrangement. Thus, a company may be placed into voluntary or compulsory liquidation, alternatively, it may be made subject to an alternative statutory procedure (administration, CVA or receivership) or it may have its debts rescheduled or compromised by way of a creditors' scheme of arrangement. [...]

[...] Namely, its onerous procedural requirements, the frequent lack of clarity and certainty on certain aspects of the SoA, its complexity, its high level of uncertainty resulting from considerable discretion of UK courts, possible contestation before courts and resulting considerable backlogs, leading to considerable delays, added costs and uncertainties, the process of implementing the SoA often taking several months, if not years, to accomplish. Indeed, the scheme process takes time, and unlike a CVA (where the creditors effectively vote as a single class), it may be difficult to achieve a consensus among affected creditors. These delays, added costs and uncertainties, led to the relative unpopularity of the SoA as a method of debt restructuring. Furthermore, to be noted that the SoA does not benefit from a moratorium on creditor actions on the contrary of formal insolvency proceedings (administration or liquidation). [...]

[...] In addition, it is sometimes used as a stick or "plan in the context of restructuring negotiations to help achieve a consensual deal. The corporate debt restructuring (CDR) mechanism The corporate debt restructuring (CDR) framework is as an out-of-court mechanism that allowed banks to restructure the debts of distressed borrowers through a less formal process and under the broad supervision of the central bank. The CDR mechanism aims to ensure a timely and transparent mechanism for the restructuring of corporate debts of viable corporate entities affected by internal or external factors, outside the purview of other legal proceedings. [...]