Distressed Assets & Alternative Investments

English Law Schemes of Arrangement: Class Composition

 

Focus on the AB InBev and SABMiller merger

Having received the sanction of antitrust regulators in Europe, the U.S., China and South Africa, the planned merger of brewing giants AB InBev and SABMiller was scrutinised this week by the High Court in London on a topic very familiar to those acquainted with English law restructurings: class composition. The outcome of the hearing, that not all members of SABMiller should be considered to be in the same class for scheme voting purposes, raises some interesting questions around class composition because of the unusual circumstances of the proposed merger. READ MORE

Orrick Ranked Among Top Ten Bankruptcy Law Firms

The Deal has once again recognized Orrick as a Top Ten Bankruptcy Law Firm in its Q1 2016 Bankruptcy League Tables. After being named to the top ten in each quarter last year, Orrick extended the streak by gaining one spot in the rankings (now #7).

During a busy Q1 period, we advised several clients on a diverse blend of bankruptcy matters, with a particular emphasis in the areas of distressed energy, municipal debt and cross-border restructurings.

The Deal’s Bankruptcy League Tables are the industry’s only league tables focused solely on active bankruptcy cases. These rankings are compiled on a quarterly basis through comprehensive deal intelligence to identify the top law, crisis management, investment, and non-investment firms and professionals involved in bankruptcy transactions throughout the United States.

Orrick Named Top Ten Bankruptcy Law Firm in Every 2015 Quarter

DealPipelineTablesQ415Once again, Orrick has been ranked a Top Ten Bankruptcy Law Firm by The Deal Pipeline. These rankings are released on a quarterly basis, compiling comprehensive deal intelligence to identify the leading law, crisis management, investment, and non-investment firms and professionals involved in bankruptcy transactions throughout the United States. After cracking the top ten in Q1, Orrick remained among the top ten bankruptcy law firms in every quarter in 2015.

Orrick’s restructuring team enjoyed a busy year, including such recent highlights as representing the City of Stockton in its exit from bankruptcy and dismissal of an appeal filed by holdout creditor Franklin Templeton in the US Bankruptcy Appellate Panel of the Ninth Circuit; Tirreno Power on a complex corporate reorganization including the negotiation and drafting of a €1 billion debt restructuring agreement, which was awarded Restructuring Deal of the Year at the 2016 Legalcommunity Energy Awards; and IFM Investors Pty Ltd, on behalf of IFM Global Infrastructure Fund, in its $5.72 billion acquisition of 100% of the membership interests of ITR Concession Company, which operates and maintains the Indiana Toll Road – named M&A Deal of the Year by ​M&A Advisor.

To see the complete list of rankings, please click here.

VIDEO: Debtwire European Distressed Debt Market Outlook 2016

Orrick partner and co-head of Europe Restructuring Stephen Phillips recently joined a Debtwire panel on potential high yield restructurings in Europe and current volatile market conditions at the 12th European Distressed Debt Market Outlook. Several videos from the launch are now available on Debtwire’s site.

sphillipsdebtwire

For more information, please contact Stephen.

 

Debtwire European Distressed Debt Market Outlook 2016

Distressed investors did not witness the anticipated wave of European high yield restructurings in 2015, but with significant stock market declines and a growing sense of economic anxiety, participants in the 12th European Distressed Debt Market Outlook expect a marked increase in restructuring activity in 2016. Despite improved European growth and stronger U.S. economic data, falling commodity prices (particularly oil) and the higher number of high yield bonds trading at distressed levels suggest another year of volatility is in store.

Orrick partner and co-head of Europe Restructuring Stephen Phillips recently joined the Debtwire panel addressing these issues. For more information, please contact Stephen.

To access the full report, click here.

Privacy Policies and the Sale of Corporate Assets: It pays to plan ahead to preserve the value of your data assets

Personal data is a valuable corporate asset.  At times, the personal information collected from customers (such as email address, mailing address, phone number, etc.) can be a company’s most valuable asset.  Unfortunately, when a company attempts to sell this asset, it can find the value of the data significantly diminished due to promises made in a privacy policy the company implemented years before it ever contemplated such a sale.

A company’s privacy policy sets forth the company’s promises to its consumers as to how it will collect, store, maintain, and share the consumers’ personal data.  In an attempt to appeal to customer privacy concerns, it is common for a company to proclaim in such policies:

We share your personal data only in the ways described in this policy,”

or

We care about our customers and we will never sell or share your personal data.”

Most companies include these statements to highlight their promise not to capitalize on a consumer’s data by selling to third party marketers.  However, many companies do not realize that statements such as these could also severely restrict the company’s ability to sell data as a corporate asset in a company sale, merger, bankruptcy, or similar corporate transaction, unless there is also a clear statement within the policy which permits data to be transferred during the course of such events.

There are steps a company can take leading up to the corporate transaction to smooth the transfer of customer data, such as updating its privacy policy, providing additional notice to consumers, requesting opt-out or opt-in consent to the revised policy and/or the data sale.  Companies that fail to take these steps and attempt to transfer data in a manner that conflicts with promises made in its privacy policy may face regulatory scrutiny or litigation, both of which would ultimately diminish the value of their data assets in any eventual sale.

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Orrick Launches Report on Restructuring European High Yield Bonds

Over the past few years the European high yield bond market has been on a roll. Issuance has increased, yields have come down and the default rate has been close to zero. Institutional demand for European high yield bonds has been exceptional. Yet a near zero default rate is an historic anomaly which cannot go on forever. What happens when liquidity dries up and issuers default? How should issuers protect themselves and manage creditors threatening to enforce security? What are the key issues for stakeholders to implement a high yield restructuring? How can conflicts of law be managed where the bond is New York law governed, the intercreditor agreement is English law and the guarantors and assets are spread throughout Europe? Drawing on our European and US restructuring experience we address these issues in our report on Restructuring European High Yield Bonds.

If you would like to receive a printed copy of this report, please let us know.

Recent EU Insolvency Regulation

The EC Regulations on Insolvency Proceedings (the “EIR“) came into force throughout the European Union (the “EU“) (except Denmark) on May 31, 2002 with the purpose of setting out the rules governing where in the EU insolvency proceedings should be opened, which law applies to the proceedings and to ensure that such proceedings are recognized across the EU. EIR provided that a company should file in the jurisdiction where its center of main interest or “COMI” is located and that there was a rebuttable presumption that this is the jurisdiction of incorporation. This led to a number of EU groups filing in the jurisdiction of the head office – for example the Rover Group had many offices around the EU but its insolvency process was run out of the UK. In addition groups frequently file where it is apparent that an insolvency procedure in a particular jurisdiction may have some advantages, for example the Eurotunnel group which has English and French companies which operate the tunnel filed in France to take advantage of a French insolvency procedure. It is often the case that European groups avail themselves of English scheme and administration procedures. In over 10 years of insolvency practice in the EU the benefits of this experience has led to a new Recast Regulation on Insolvency 2015/848 (the “Recast Regulation“), which was published by the European Parliament and Council on May 20, 2015. It came into force on June 26, 2015 and applies to relevant insolvency proceedings from June 26, 2017. This client alert addresses the key features of the Recast Regulation:

  1. a broadened scope, covering a range of commercial insolvency proceedings such as the Italian reorganization plan procedure which were not previously within the ambit of the regulation;
  2. a framework for group insolvency proceedings, which will allow for the coordination of insolvency procedures at an EU level;
  3. COMI – there is no mention of the controversial two year look-back period initially proposed by the European Parliament, but the presumption that COMI is in the place of the registered office will not apply if the registered office has shifted in the preceding three months;
  4. interconnected insolvency registers – national insolvency registers may be accessed on the European e-Justice Portal; and
  5. provisions which allow the officeholder in main proceedings to give an undertaking to foreign creditors to avoid secondary proceedings in other member states being opened.

Read More.

 

What You Need to Know About the Uniform Voidable Transactions Act

Last year, the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) rolled out one of its latest projects, the Uniform Voidable Transactions Act (“UVTA”).[I]  According to NCCUSL’s website,[ii] the model statute has already been enacted in eight states, including California (where it takes effect on January 1, 2016), and has been introduced in four others, including Massachusetts.

The first thing to know about the UVTA is that it is the Uniform Fraudulent Transfer Act (“UFTA”)[iii] with a new name and the legal equivalent of a fresh coat of paint. In a lengthy article about the drafting of the model statute[iv], the reporter for the NCCUSL drafting committee, Professor Kenneth C. Kettering, describes the model statute as “the UFTA, renamed and lightly amended.”  As light as the amendments may be, however, Kettering notes that they are “significant enough to warrant attention”[v]—significant enough, at least, to justify his publishing a 57-page law review article on the subject. The extensive “Official Comments” that were promulgated by NCCUSL along with the model statute also provide some insight into the thinking of the drafters, but Professor Kettering’s article is far more forthcoming about the reasoning behind the proposed statutory changes. Anyone who wants the full story should, therefore, consult Professor Kettering’s article.   We will try here instead simply to describe the most significant provisions in the new or, at least, improved model statute.

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Investing in Southern Europe

Leaving aside the drama of the Greek crisis, Southern Europe is in recovery from a long recession.  Our recent panel of experts discussed investment opportunities in Italy, Spain and  Portugal.

Topics covered include the nature of the opportunities they are working on and the commercial environment facing investors who are looking to undertake  new money debt,  equity and distressed debt investments in the region. The audience was updated on the significant recent developments in the  insolvency laws in Spain and Italy which are designed to facilitate corporate restructuring. We also addressed some of the English law restructuring procedures which investors have used where local law measures have not proved suitable.

The live video presentation from this event is available here, and the presentation materials from this seminar are also available at this link.