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Checklist of factors which may (and may not) fracture the class in a scheme of arrangement or restructuring plan

Checklist of factors which may (and may not) fracture the class in a scheme of arrangement or restructuring plan The below tables provide an overview of: (i) various factors that do not create separate classes (ie do not fracture the class) and (ii) various factors that have been considered to create separate classes (ie fracture the class) in Part 26 scheme and Part 26A restructuring plan cases. Judges have found that the caselaw relating to schemes is equally applicable to restructuring plans on many issues (see Re PizzaExpress (convening) and Re Virgin Atlantic), including class formation. However, the Court of Appeal in Adler confirms that cross-class cramdown (CCCD) in restructuring plans does require different considerations; see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan. As a word of caution, it is important to recognise that the class analysis is very fact-specific and it is possible that another judge, faced with a slightly different fact pattern, might reach a different conclusion to that reached below....

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Hot Topics for Banking & Finance lawyers

Hot Topics for Banking & Finance lawyers This Practice Note provides information on key new and upcoming legal developments, as well as topics currently of particular interest to Banking & Finance lawyers. New UK listing rules On 11 July 2024, the FCA published the new UK listing rules (UKLR). See News Analysis: FCA publishes final reforms to listing regime in new UK Listing Rules sourcebook. What do they do? The new rules significantly reform the UK listing regime and create a simplified and more competitive UK listing structure. A key change is the introduction of a single listing category for commercial companies (replacing the premium and standard listing categories) subject to a more disclosure-based regulatory regime. Among other things, the rules for the commercial companies category remove the need for votes on significant or related party transactions and offer variability around dual class share structures with enhanced voting rights. More emphasis on disclosure aims to bolster investor protections to hold the management of companies they co-own to account. The...

Secondary trading of distressed debts

Secondary trading of distressed debts Companies which are starting to show signs of distress often see their debt being traded on the secondary market at prices below par/face value. The extent to which the debt is discounted to face value reflects the market's view of the likelihood (or not) of the debt being repaid in full. The original lenders of record (eg banks or lenders which originated the loan) may be keen to sell their debt exposure on in the secondary market to reduce their exposure to a particular debtor or sector. In complex restructurings, excessive debt trading can make negotiations with key creditors difficult if they are constantly changing creating a ‘revolving door’ scenario. Key players Typical secondary debt players include hedge funds, vulture funds, special situation funds, private equity (PE) funds and pension funds. They trade in secured/unsecured debt, bank or bond debt or trade claims. The secondary debt market is largely unregulated, although the Loan Market Association (LMA), Europe's trade association for the syndicated...

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JMLSG publishes revisions to AML/CTF guidance relating to syndicated lending

The Joint Money Laundering Steering Group (JMLSG) has published amendments to Part 2, Sector 17 (Syndicated Lending) of its guidance on anti-money laundering and countering terrorist financing (AML/CTF). The new text has been approved by the JMLSG Board and submitted to HM Treasury for ministerial approval.

JMLSG consults on changes to syndicated lending section of ML/TF guidance

The Joint Money Laundering Steering Group (JMLSG), a private sector body made up of leading UK trade associations in the financial services industry, has published a proposed revision to Part II Sector 17 (Syndicated Lending) of its guidance, which sets out what is expected of firms and their staff in relation to the prevention of money laundering (ML) and terrorist financing (TF). The deadline for comments is 17 January 2022.