News
Thursday, March 04, 2010
As soverign debt problems in Greece and other western countries dominate the headlines, the UK has an extra challenge to grapple with; a General Election, which must be held in June.
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Thursday, October 29, 2009
In one of the last cases to be heard in the UK’s House of Lords, a previous ruling on the Sigma structured investment vehicle (SIV) was overturned today, with huge implications for recoveries for many investment banks, hedge funds and other secured creditors of the largest ever SIV.
In one of the last cases to be heard in the UK’s House of Lords, a previous ruling on the Sigma structured investment vehicle (SIV) was overturned today, with huge implications for recoveries for many investment banks, hedge funds and other secured creditors of the largest ever SIV. The case concerned the interpretation of the security trust deed in Sigma Finance Corporation, the first SIV to be launched, whose assets were worth US$27 billion before the credit crunch. Today’s ruling is the first ever UK Supreme Court judgment on appeal. Today’s judgment overturns a Court of Appeal ruling that Sigma’s receivers were obliged to distribute assets to certain creditors holding early maturing notes following an event of default, a ruling which would have lead to no return for all other secured creditors who held notes maturing at a later date. The appeal was formulated on the basis that the Sigma assets should instead be distributed proportionally on a pari passu basis among all secured creditors irrespective of the dates their notes matured, a construction favoured by the Supreme Court. Sigma was established to invest in certain types of asset backed securities and other financial instruments. It transacted business with a limited pool of investors mainly comprising of holders of instruments issued or guaranteed by Sigma. When the market collapsed, Sigma became insolvent with total liabilities in excess of US$9 billion. Its assets, once valued at US$27 billion, realised just US$306 million at auction, crystallising an enormous loss for its secured creditors who totalled in excess of US$6 billion. Adam Plainer, London head of business restructuring and reorganisation at Jones Day, and his colleague of counsel Linton Bloomberg, acted on behalf of the lead appellant in all three courts over the past 12 months. The lead appellant was owed US$500 million. Plainer said today: “We are delighted to have overturned the Court of Appeal and make a substantial recovery on behalf of our client. It is fundamental that investors have some certainty as to how any courts are likely to interpret conflicting provisions in an insolvency”. Bloomberg added: “The judgment is notable, not just for the values at stake, but also because it may have an impact on the legal interpretation of waterfall clauses in other cases where asset values have plummeted beyond the contemplation of the lawyers drafting the original documentation. “Pari passu has always been a fundamental principle of insolvency law and this case shows that the Courts will be reluctant to find in favour of any other distribution regime unless the documentation is expressly clear and unambiguous.”
Thursday, July 16, 2009
Von Bismarck joins Linklaters
Kolja von Bismarck, one of the most high-profile insolvency and restructuring lawyers in Germany, has left Clifford Chance to joins Linklaters.
His exact start date as a Linklaters partner in Berlin has yet to be confirmed.
Linklaters said in a statement today that Bismarck “will be a very significant addition to Linklaters’ German restructuring & insolvency team, which has been developed over recent years by Sven Schelo into a leading practice advising on numerous high profile and complex matters, such as the insolvency of Rosenthal, the sale of TMD Group out of insolvency, and the refinancing of Premiere.”
Tony Bugg, global head of restructuring and insolvency at Linklaters, said: “Kolja is an exceptionally talented and established lawyer in the restructuring and insolvency field. His expertise and background will strengthen our capabilities both in Germany and globally, and will further enhance Linklaters’ position as the leading legal adviser on complex and international restructurings.”
Bugg is leading the team advising the London administrators of Lehman Brothers, one of the largest and most complicated international insolvencies in history.
Kolja von Bismarck, 50, said: “I am looking forward to joining a very dynamic and successful restructuring practice, with its focus on the most complex, cross-border work and its integrated global team."
He has spent twelve years as a partner at Clifford Chance and its predecessor firm Pünder Volhard Weber & Axster. He recently advised GM Europe on the rescue of its German arm Opel, the banking committee on the restructuring of French roofing company Monier and Metro on its rumoured bid for Karstadt.
He has also played a leading role in insolvency law reform in Germany, using the local chapter of the Turnaround Management Association (TMA) as a lobbying vehicle. Earlier this year he presented proposals to various political parties, together with Lars Westpfahl of Freshfields Bruckhaus Deringer, for a rapid solution to Germany’s insolvency crisis.
Thursday, May 21, 2009
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Wednesday, December 03, 2008
Jamie Sprayregen returns to Kirkland & Ellis after just two years with Goldman Sachs.
Read about Sprayregen's reasons for his move in the next issue of Global Turnaround.
Friday, November 14, 2008
Senior partners at Kroll’s European restructuring and insolvency practice based in London have completed long-awaited MBOs from parent Marsh & McLennan Companies (MMC) to create two separate new boutiques, Talbot Hughes McKillop and Zolfo Cooper.
The second MBO has been completed in tandem with New York based Kroll Zolfo Cooper, led by Joff Mitchell, to form two separate partnerships trading under the global brand of Zolfo Cooper. The New York deal was announced earlier this week. Zolfo Cooper will continue the practice’s partnerships and continued affiliations in Asia, Australia, and the Caribbean. Simon Freakley will act as chief executive of Zolfo Cooper Europe. The London-based practice also includes Simon Appell, Alastair Beveridge, Gary Squires and Peter Saville. Zolfo Cooper Europe is strong in insolvency work as well as restructuring. Talbot Hughes McKillop meanwhile is keen to emphasise that it is focussed on restructuring, and it will not be doing insolvency work. Paul Horn will act as managing partner of Talbot Hughes McKillop. The Talbot Hughes McKillop restructuring practice was bought by Kroll in 2005 and the business is reverting back to its original name. The original founders of the business, Chris Hughes, Murdoch McKillop and John Talbot, will continue their involvement with the business; Hughes and McKillop as partners and Talbot as special adviser. The firm will have 24 people initially, and is about to announce a clutch of junior hires. Other partners include Julian Gething and Dean Merritt. Paul Horn, managing partner, commented: “Our team has worked together for many years and we all share a passion for delivering outstanding services to our clients. We will continue to develop the business as the first choice provider of hands‑on solutions to complex restructuring issues. “Our independent status will also bring greater clarity to the market’s understanding of our proposition,” Horn said. Since its inception, the Talbot Hughes McKillop practice has handled some of the highest profile UK and European restructuring projects, including: Four Seasons Health Care, Johnson Service Group, Teesside Power, Danoptra, TMD Friction, Le Meridien Hotels and Marconi. Meanwhile Simon Freakley, chief executive of Zolfo Cooper Europe, said: "This is a very exciting development for our business and our people. We have enjoyed a strong year to date with our team of corporate advisory and restructuring experts being appointed on many high profile and complex assignments. “This excellent track-record and experience coupled with the continued close working relationships we will enjoy with our US colleagues and affiliates worldwide gives me great confidence for the long-term success of the newly independent Zolfo Cooper business,” said Freakley. In recent months, the Zolfo Cooper Europe team has worked on high profile assignments including the administration of XL Leisure Group plc, MFI Retail Ltd, The Laurel Pub Company, Celebrations Group Ltd, and the cross border restructuring of Sea Containers.
Thursday, October 02, 2008
Is the rescue culture facing its own global crisis?
We have all just experienced a couple of months of economic crisis unprecedented in living memory. This has included the biggest bankruptcy in history, that of Lehman Brothers. It is difficult to see through the fog of the current chaos to discern any trends. Even the idea that the global financial crisis has been averted and trouble is now migrating to the 'real economy' may prove outdated by the time you read this.
Thursday, July 31, 2008
One of Spain's biggest property developers Martinsa-Fadesa became one of the country's biggest ever insolvencies on 15 July, prompting fears of more collapses.
The market was shocked that Martinsa was forced to file, considering that so much effort had gone in to a restructuring which the company had agreed with its banks in May.
Thursday, June 26, 2008
The chief executive of the International Air Transport Association (IATA) Giovaanni Bisignni, told its annual conference on 2 June that:
The chief executive of the International Air Transport Association (IATA) Giovaanni Bisignni, told its annual conference on 2 June that: "Twenty-four airlines have gone bust in the last six months and US$130 per barrel oil is reshaping the industry even as we speak. In the next 12 months we could face US$99 billion in extra costs from oil."
Monday, May 19, 2008
The Turnaround Management Association(TMA) held its first ever pan-European conference in Paris in April....
The Turnaround Management Association(TMA) held its first ever pan-European conference in Paris in April to drum up support for a new Chapter that would unite Germany, France, the UK and other jurisdictions in a single high-profile body. To find out more go to www.tma-uk.org or www.turnaround.org
Tuesday, March 04, 2008
Litigation Funding Conference 12/13 March 2008 London
The market for litigation funding is growing and it is a new big sectors of interest for corporate clients, lawyers, corporates, insolvency practitioners and, crucially, funding institutions. For the first time, this conference brings together all of the key players in London in March 2008. As well as examining the legal and technical basis for the development of the the litigation funding market, this conference offers delegates an opportunity to understand the pace of change in the litigation funding space, as well as to meet and network among important players in the litigation funding market. For more information go to Event brochure
Wednesday, November 21, 2007
Ernst & Young and KPMG are returning to the US restructuring market, after being forced out three years ago by conflict-of-interest concerns in the Sarbanes-Oxley era.
The Big Four rivals are set to announce new restructuring practices in the US for two reasons; the expiration of non-compete clauses with the respective American firms they sold their US restructuring practices to; and a softening of opposition by the American authorities to acountancy firms offering non-audit sevices to audit clients.
Friday, October 19, 2007
US accused of 'judicial xenophobia'
The question of how to restructure or liquidate offshore-registered hedge funds was thrown into disarray when a New York bankruptcy judge rejected Chaper 15 protection for two Bear Stearns funds. Judge Burton Lifland's decision to deny the Cayman liquidation eiter 'main' or'non-main' recognition has ignited a storm of debate, not lest becasue he was one of the authors of Chapter 15.
Monday, September 03, 2007
The crisis in the capital markets provoked by the US subprime mortgage meltdown will cause restructurings to rise, but not yet, according to bankruptcy professionals.
Bankers are waiting for the uncertainty surrounding the valuation of mortgage-based securties to clear. Distressed investors are waiting for debt prices to fall further. Meanwhile private equity deals and refinancings at the higher end of the market are on hold. This may lead to a 'return to normal', after several years when restructurings have been replaced by refinancings. A numer of subprime mortgage lenders and hedge funds have gone bust, with more expected to follow. 'Covenant lite' is dead,. Risk analysis is back in fashion.
Wednesday, August 01, 2007
On 18 July Alan Bloom, Maggie Mills, Roy Bailey and Stephen Harris of Ernst & Young (E&Y) were appointed administrators to Metronet, the contractor responsible for maintaining two thirds of London's Underground network. The case is one of the three largest administrations in British history, and comes against a background of a flat market for big restructurings, despite the current upheavals in the credit markets.
Wednesday, November 02, 2005
The longest and most expensive trial in British history collapsed on 2 November when the liquidators of Bank of Credit and Commerce International (BCCI) unexpectedly dropped their case against the Bank of England.
The liquidators from Deloitte said their legal costs for the 256-day case were about UK£38 million (US$65 million). They face a hearing on Friday 11 November where the Bank has declared it will pursue them for its own costs of about UK£70 million (US$120 million).
The Judge Mr Justice Tomlinson said on Wednesday he may also make a further statement at that hearing about the way the liquidators pursued the case.
After hearing of the liquidators' shock decision on Wednesday morning, Mr Justice Tomlinson said the documentary evidence and witness statements from former Bank officials had "left me in no doubt that the very serious allegations of impropriety and dishonesty ... are wholly without foundation".
The Judge added that he had been surprised throughout the year of the trial that it had continued so long.
BCCI was shut by regulators led by the Bank of England in 1991 following decades of corruption and hidden losses, which left it owing creditors over UK£10 billion (US$17 billion).
Deloitte pointed out this week that even with this week’s set-back, the liquidation has been a spectacular success. So far, Deloitte has paid out 75 per cent of the £4.1 billion
(US$7 billion) it has recovered to creditors and will pay back another 6 per cent by December. It estimated in 1991 that it would recover about 10 per cent of BCCI’s
losses, whereas now it is set to pay creditors about 80 per cent.
In dramatic scenes at the High Court in London on Wednesday, Nicholas Stadlen QC,
for the Bank, described the news of the liquidators’ withdrawal as a "the most
remarkable and humiliating climb-down in the history of England litigation" and
declared triumphantly: "This is unconditional surrender."
The allegations centred on 22 Bank officials who the liquidators claimed knew BCCI was in a bad state long before its crash and failed to take steps to prevent what has been described as the largest banking collapse in modern history. They also alleged the Bank knew it should never have granted a licence to BCCI in 1980.
Regulators the world over cannot be sued for negligence, so the liquidators were forced to sue for the much more serious allegation of misfeasance in public office –
that is, acting in a knowingly dishonest manner in order to deceive the public.
The Governor of the Bank, Mervyn King, who was coincidentally sitting at the back of the court on Wednesday, said he was "delighted" at the outcome. He said: "There has never been a shred of evidence to support these disgraceful allegations, and the case has collapsed as we always said it would.”
"The foolish determination to pursue a hopeless case for so long has also led to a huge waste of creditors' and taxpayers' money, and I hope everyone concerned will take a close look at how and why such a very weak case took 12 years to come to an end.
The Bank will be seeking the largest possible compensation for its costs," said King.
You can read the the full transcript of the sensational last day in court, as well as the
liquidator’s subsequent press statement,
Download this article, including BCCI Trial Firms and Faces.
Tuesday, November 30, 1999
In one of the last cases to be heard in the UK’s House of Lords, a previous ruling on the Sigma structured investment vehicle (SIV) was overturned today, with huge implications for recoveries for many investment banks, hedge funds and other secured creditors of the largest ever SIV.
In one of the last cases to be heard in the UK’s House of Lords, a previous ruling on the Sigma structured investment vehicle (SIV) was overturned today, with huge implications for recoveries for many investment banks, hedge funds and other secured creditors of the largest ever SIV. The case concerned the interpretation of the security trust deed in Sigma Finance Corporation, the first SIV to be launched, whose assets were worth US$27 billion before the credit crunch. Today’s ruling is the first ever UK Supreme Court judgment on appeal. Today’s judgment overturns a Court of Appeal ruling that Sigma’s receivers were obliged to distribute assets to certain creditors holding early maturing notes following an event of default, a ruling which would have lead to no return for all other secured creditors who held notes maturing at a later date. The appeal was formulated on the basis that the Sigma assets should instead be distributed proportionally on a pari passu basis among all secured creditors irrespective of the dates their notes matured, a construction favoured by the Supreme Court. Sigma was established to invest in certain types of asset backed securities and other financial instruments. It transacted business with a limited pool of investors mainly comprising of holders of instruments issued or guaranteed by Sigma. When the market collapsed, Sigma became insolvent with total liabilities in excess of US$9 billion. Its assets, once valued at US$27 billion, realised just US$306 million at auction, crystallising an enormous loss for its secured creditors who totalled in excess of US$6 billion. Adam Plainer, London head of business restructuring and reorganisation at Jones Day, and his colleague of counsel Linton Bloomberg, acted on behalf of the lead appellant in all three courts over the past 12 months. The lead appellant was owed US$500 million. Plainer said today: “We are delighted to have overturned the Court of Appeal and make a substantial recovery on behalf of our client. It is fundamental that investors have some certainty as to how any courts are likely to interpret conflicting provisions in an insolvency”. Bloomberg added: “The judgment is notable, not just for the values at stake, but also because it may have an impact on the legal interpretation of waterfall clauses in other cases where asset values have plummeted beyond the contemplation of the lawyers drafting the original documentation. “Pari passu has always been a fundamental principle of insolvency law and this case shows that the Courts will be reluctant to find in favour of any other distribution regime unless the documentation is expressly clear and unambiguous.”