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Creative Uses of Collateral Present New Financing Opportunities for PE

Posted in M&A and Private Equity

Innovative asset-based lending is on the rise as a means of attracting new lenders while maintaining the strategic support of existing creditors.

By Francesco Lione, David Walker, Tom Evans, and Catherine Campbell

Raising fresh capital for portfolio companies in times of financial stress is always a delicate balancing act between attracting new lenders and maintaining the strategic support of existing creditors. The almost instantaneous halt in cash flows and scramble for new capital injections precipitated by the COVID-19 pandemic has significantly changed traditional approaches to collateral — giving rise to new financing opportunities for sponsor-backed deals and businesses. Regardless of debt market buoyancy, these new financing techniques are here to stay, having demonstrated value in overcoming creditor scepticism during times of economic uncertainty and bringing a new way to increase leverage. Continue Reading

Commercial Court: Compliance With Arbitral Preconditions a Question of Admissibility

Posted in Dispute Resolution

The decision clarifies the circumstances under which an arbitral award might be challenged.

By Philip Clifford QC

A recent decision by the English Commercial Court indicates that failure to comply with a precondition to arbitration (such as an obligation to negotiate) calls into question the admissibility of a claim, rather than calling into question the jurisdiction of the arbitrators to hear such a claim. As parties to arbitration can only challenge an award through the English courts under s. 67 of the Arbitration Act 1996 (the Act) for lack of jurisdiction, and not in relation to the admissibility of a claim, the decision suggests that s. 67 may not be available to bring challenges concerned with a failure to comply with such preconditions to arbitration.

In Republic of Sierra Leone v SL Mining Ltd [2021] EWHC 286 (Comm), the court dismissed the Republic of Sierra Leone’s challenge made under s. 67 of the Act, finding that the challenge related to questions of admissibility to be determined by the arbitrators, rather than relating to a question of jurisdiction falling under s. 67 of the Act. Continue Reading

Independent Review Provides Recommendations for Improving UK Listing Regime

Posted in Finance and Capital Markets

The recommended reforms aim to make the UK’s listing regime more competitive while maintaining high standards of corporate governance, shareholder rights, and transparency.

By Chris Horton, James Inness, and Anna Ngo

A new independent review (the Review), led by Lord Hill, has been released that provides recommendations on how the UK can improve its listings regime. Published on 3 March 2021, the Review aims to impart recommendations that will improve the process of raising equity capital on the UK public markets, whilst also maintaining high standards of corporate governance, shareholder rights, and transparency. Continue Reading

UK Government Publishes Full Response to Online Harms White Paper

Posted in Data Protection

Organisations face fines of up to 10% of annual global turnover or £18 million (whichever the greater) for failure to comply.

By Gail Crawford, Rachael Astin, Alain Traill, and Katie Henshall

On 15 December 2020, the UK government published its full response to the Online Harms White Paper consultation, which sets out final proposals for the new regulatory regime. The response confirms that companies in scope will face a range of new obligations relating to both illegal and harmful content, in addition to the threat of significant fines and other sanctions in the event of non-compliance. The proposed regulatory framework will be introduced in 2021 in the form of the Online Safety Bill.

The response comes more than a year and a half after the Home Office and the Department for Digital, Culture, Media and Sport (DCMS) first published the Online Harms White Paper in April 2019, which proposed a new compliance and enforcement regime to tackle online harms. In February 2020, the government set out preliminary details of the proposed regulatory regime as an initial response to the white paper. For background to this consultation, see Latham’s previous blog posts (White Paper launch; government interim response). Continue Reading

English Court Increasingly Willing To Order Disclosure From Third-Party Devices

Posted in Dispute Resolution

Two recent English cases illustrate the court’s receptiveness to disclosure orders in relation to informal communications on personal devices.

By Dan Smith and Aisling Billington

In two recent decisions, the English Court has demonstrated a pragmatic and targeted approach to ordering disclosure of material held on personal devices of third parties, and a recognition of the value of informal communications as evidence of disputed factual allegations. The decisions are discussed below.

Regardless of whether disclosure is sought under the existing provisions of the Civil Procedure Rule (CPR), or the Disclosure Pilot Scheme, the Court will apply the principle of proportionality in making or varying an order for disclosure. Notably, while the Court is mindful of the privacy rights of individuals, there is increasing recognition that work is carried out on personal electronic devices (including over more informal channels such as WhatsApp), any mingling of personal and work data will not itself be sufficient to circumvent a disclosure order. Continue Reading

SFO’s International Investigatory Powers Curbed in Supreme Court Ruling

Posted in Dispute Resolution

Landmark decision holds that the SFO does not have the power to procure documents from foreign companies outside the jurisdiction.

By Stuart Alford QC and Callum Rodgers

On 5 February 2021, the UK Supreme Court handed down a highly significant judgment in R (on the application of KBR, Inc) v Director of the Serious Fraud Office [2021] UKSC 2. The Court unanimously ruled in favour of KBR, Inc in its appeal of a 2018 High Court judgment, which had permitted the Serious Fraud Office (SFO) to use its section 2(3) powers under the Criminal Justice Act 1987 (the 1987 Act) to require foreign companies that were sufficiently connected to the UK to provide documents and other information for the purposes of an SFO investigation.

This is the first case in which the UK courts have ruled on the extraterritorial reach of the SFO’s section 2 powers, which are its primary means of gathering evidence and factual information in support of its criminal investigations into bribery and corruption.  Continue Reading

High Court Clarifies Consequences of Late Part 36 Offer Acceptance

Posted in Commercial

The decision highlights a potential tactical advantage of late acceptance in certain circumstances.

By Jon Holland and Anna James

In Roxanne Pallett v. MGN Limited,[1] the High Court held that the usual costs consequences of accepting a Part 36 offer do not apply if a party accepts a Part 36 offer outside the “relevant period”, meaning the offeree is not bound to pay the offeror’s costs. The offeree is entitled, in appropriate circumstances, to invite the court to make a different order, based on all the circumstances of the case.

The decision highlights a potential tactical advantage of late acceptance in circumstances in which an opponent’s conduct justifies a departure from the usual costs consequences of accepting a Part 36 offer. The decision will be of particular interest to parties that settle litigation for commercial reasons. Continue Reading

CONSOB Extends Reporting Requirements for Italian-Listed Issuers by 3 Months

Posted in EU and Competition, Finance and Capital Markets

More stringent reporting obligations regarding relevant shareholdings and investment objectives for Italian-listed issuers will continue until 13 April 2021.

By Antonio Coletti, Guido Bartolomei, Marta Negro, and Isabella Porchia

On 13 January 2021, the Italian Securities Commission (CONSOB) adopted Resolution 21672 (the Resolution), further extending for three months the more stringent reporting requirements for relevant shareholdings and investment objectives in certain Italian-listed issuers with high current market value and/or spread ownership structure. The more stringent reporting requirements will now end on 13 April 2021. The Resolution extends the provisions of 9 April 2020, which were later extended until 13 January 2021
Continue Reading

What Rules Will Apply to Jurisdiction and the Enforcement of Judgments After Brexit? Part Four

Posted in Brexit, Dispute Resolution

The EU-UK Trade and Cooperation Agreement has now been agreed. So what rules will apply to jurisdiction and foreign judgments in the UK from 1 January 2021?

By Oliver Browne and Tom Watret

Introduction

It has been a long time in the making, but the UK and EU have finally reached an agreement (the EU-UK Trade and Cooperation Agreement) on their future relationship after the end of the Brexit transition period, which expires today, 31 December 2020.[i]

It has been known since the referendum result on 23 June 2016 that the rules applicable to jurisdiction and enforcement of judgments would change after Brexit, since the regime that currently applies — the Brussels Recast Regulation 1215/2012 (Brussels Recast) — is only available to EU Member States.

In previous posts in this series, we explained the different rules which could apply to jurisdiction and enforcement of foreign judgments in the UK from 1 January 2021, covering the Lugano Convention 2007 (here), the Hague Convention 2005 (here), and the UK’s common law rules (here), in both “deal” and “no deal” situations.

Now that we have a deal, this post provides an overview of the applicable rules. Continue Reading

Don’t Waive Privilege Goodbye: High Court Finds Reliance On Legal Communications Constitutes Waiver Of Privilege

Posted in Dispute Resolution

Litigants should take particular care when drafting witness statements to avoid waiving privilege.

By Dan Smith and Aisling Billington

In Guest Supplies Intl Limited v South Place Hotel Limited, D&D London Limited[i], the UK High Court held that a reference in a witness statement to communications with a legal adviser regarding a key contractual document constituted waiver of legal professional privilege in any relevant communications with that legal adviser. Continue Reading

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