The decision confirms that an arbitration agreement will be upheld in the face of insolvency proceedings only if it can be shown that the petition debt is genuinely disputed on substantial grounds.
By Martin Davies, Dominic Geiser, and Oliver Middleton
The Privy Council’s decision in Sian Participation Corp (in liq) v. Halimeda International Ltd [2024] UKPC 16 (Sian Participation) is the latest in a series of judgments clarifying the common law position on whether the court can
By Tom Evans, David Walker, Daniel Smith, Aisling Billington, and Catherine Campbell
The location of the data is not sufficient to avoid a disclosure order.
When it comes to personal devices, people increasingly communicate across multiple platforms, often in an informal and unguarded manner. However, high levels of litigation driven by the COVID-19 pandemic (including insolvency and restructuring litigation), the recent M&A boom (including shareholder disputes and other transactional litigation), and the rise of remote/hybrid work mean that PE firms must remain alert to the risk of personal device communications being disclosed in litigation.
As seen in recent cases, the English courts place value in contemporaneous written evidence, and take a pragmatic and targeted approach to disclosure. While English courts are mindful of the privacy rights of individuals, they recognise that employees conduct work on personal devices and non-proprietary third-party apps.
However, the location of the data is not sufficient to avoid a disclosure order, and PE firms should consider how to best protect themselves.
Successfully executing an acquisition from stress, distress, or insolvency requires a creative approach to reconcile competing interests.
By Simon Baskerville, Jack Isaacs, Hyo Joo Kim, Catherine Campbell, Tom Evans, and David Walker
The COVID-19 pandemic has brought a heightened risk of financial difficulty and insolvency for companies. Whilst there have been relatively few formal insolvencies so far, in our view troubled businesses may be forced to pursue accelerated asset disposals, creating opportunities for PE firms. However, successfully executing an acquisition from stress, distress, or insolvency requires skillful navigation of competing interests in a complex legal landscape.
Ruling confirms majority noteholder should not be disenfranchised from voting
By Simon J. Baskerville, Sophie J. Lamb QC, Bradley J. Weyland, and Eleanor M. Scogings
The English High Court held that it had jurisdiction in a cross-border dispute involving the Norske Skog group (Norske Skog), and confirmed that a majority noteholder did not “control” the debtor companies and was therefore not excluded from being part of the “instructing group”. The case also confirms the ability of the English courts to rule in relation to issues of both New York law and English law. These rulings reassured observers active in European leveraged finance transactions, who have long believed that courts should interpret and approach this suite of contracts in exactly this way.
Case Background
In 2015, Norske Skog, a large Norwegian group of manufacturing companies engaged in the paper industry, issued senior secured notes (the Notes) pursuant to a New York law governed indenture. As is typical with leveraged finance structures, the company also entered into an intercreditor agreement (ICA) governed by English law. The ICA allows the flexibility for multiple secured creditor classes under various instruments to benefit from the security. Further, the ICA governs the relative priority of such creditors and other liabilities, as well as the ability to instruct the security agent in case of a default scenario.
Much like the English Scheme of Arrangement which has become a popular debt restructuring solution for international debtors, the English High Court is an attractive forum for insolvency litigation thanks to the potent combination of wide-ranging powers available to Insolvency Practitioners (IPs) under the Insolvency Act 1986, and the increasing availability of litigation funding arrangements in the London market.
Transactions which prefer related party creditors or which are at an undervalue or otherwise result in serious prejudice to creditors may be clawed back in the right circumstances. Many of these remedies are capable of having extra-territorial effect. In other words they can be used to support the efforts of an overseas IP who is recognised by the English courts, and may be sought against a defendant who is outside the jurisdiction.
By Herve Diogo Amengual, Frank Grell, Helena Potts and Andrea Novarese
In light of the UK’s cram down and director-friendly processes, in particular its scheme of arrangement model, major European economies such as France, Germany and Italy have worked hard to develop regimes that give greater emphasis to pre-insolvency alternatives. These new regimes create cram down mechanisms and encourage debtor-in-possession (DIP) financings, ultimately aiming to make restructuring plans more accessible, more efficient, and crucially more reliable; essentially more in tune with the Anglo-American approach to insolvency and restructuring.