Log in
Register
Search
Search titles only
By:
Search titles only
By:
Log in
Register
Search
Search titles only
By:
Search titles only
By:
More options
Toggle width
Share this page
Share this page
Share
Facebook
Twitter
Reddit
Pinterest
Tumblr
WhatsApp
Email
Share
Link
Menu
Install the app
Install
Forums
Law Firm Events
Law Firm Deadlines
TCLA TV
Members
Leaderboards
Premium Database
Premium Chat
Commercial Awareness
Future Trainee Advice
Forums
Aspiring Lawyers - Interviews & Vacation Schemes
Commercial Awareness Discussion
Commercial Awareness Update - March 2019!
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Bugsy Malone" data-source="post: 10382" data-attributes="member: 201"><p><strong>3. <u>A Brexit update and its impact on the debt restructuring business ([USER=980]@Angel[/USER])</u></strong></p><p></p><p><strong>The story </strong></p><p></p><p><em>An update:</em></p><ul> <li data-xf-list-type="ul">First, the exit deal (that Mrs May had spent 2 years negotiating and renegotiating countless times) was rejected by the MPs for the <strong>second </strong>time.</li> <li data-xf-list-type="ul">Second, on the following day, MPs rejected the possibility of a <strong>no-deal Brexit</strong> as well.</li> <li data-xf-list-type="ul">Third, MPs voted in favour of a 3-month<strong> extension</strong> of Article 50, bringing the new Brexit day to 30th June.<ul> <li data-xf-list-type="ul">The government must now make an official request for the extension</li> <li data-xf-list-type="ul">The EU will have to make a unanimous decision</li> </ul></li> </ul><p>As pointed out by The Economist (<a href="https://www.economist.com/leaders/2019/03/14/oh-uk-what-next-for-brexit" target="_blank">https://www.economist.com/leaders/2019/03/14/oh-uk-what-next-for-brexit</a>), Mrs May’s tactics from here on is somewhat equivalent to compelling MPs to choose from options that they are disenchanted with, and neglect alternatives that MPs are convinced to be better. From a constitutional and political point of view, it seems that regardless of the outcome, given the divided views and factions, a truly consenting parliamentary majority to move things forward in carving the future relationship between the UK and the EU is harder than ever.</p><p></p><p><strong>Impact on businesses and law firms (specifically, debt restructuring):</strong></p><p></p><p>The amount of literature covering the impact of Brexit in all practical and possible ways are countless. But, just to bring things closer to home for aspiring commercial lawyers, the legal practice of debt restructuring in the UK is perhaps an area worth considering more closely.</p><p></p><p><em><u>Background: </u></em></p><p></p><p>A company/ business can run into financial difficulties anytime. This could be due to various factors that may or may not be within the control of the company. For example, a change in consumer taste (current high-street brands), economic downturns (Lehman Brothers), unprecedented geopolitical changes, or simply just mismanagements within the company (Patisserie Valerie).</p><p></p><p>Sure, the company can try to inject additional funds by obtaining more debt <em>(i.e. bank- loans or issuance of bonds)</em>, reduce costs by increasing efficiency or even change the strategic direction of the business as a whole. However, if its financial difficulty is too substantial (<em>i.e. its inability to pay its creditors is too much</em>), it is doubtful that these internal modifications would do much help. The company will then only have two choices; to close down the business altogether or to seek help to ‘rescue’ the company.</p><p></p><p>The legal regime available in the UK to restructure a company’s debt <em>(i.e. to reorganise/ renegotiate/ propose new terms with the creditors to give the company some leeway to continue business and not be closed down just because of some cash-flow problem)</em> is a popular one to domestic, EU and foreign companies. Whether it is the UK courts’ pragmatic approach or the availability of creative ways to restructure a business in the UK that are unavailable in other jurisdictions (including the EU), the legal service to advise major companies on debt restructuring is a big business to London law firms.</p><p></p><p>Just to name a few, Clifford Chance and Kirkland & Ellis have been involved in seminal restructuring cases such as with a German-based group, Rodenstock. Dentons, Slaughter and May and Linklaters were involved in the restructuring of Luxembourg-incorporated group, Wind Hellas. For a more recent example, Shearman & Sterling recorded an interesting podcast the restructuring of Greek-based Frigoglass at <a href="https://www.shearman.com/perspectives/2018/09/podcast-on-frigoglass-restructuring" target="_blank">https://www.shearman.com/perspectives/2018/09/podcast-on-frigoglass-restructuring</a> .</p><p></p><p><em><u>What Brexit means:</u></em></p><p></p><p>What these companies have in common is:</p><ul> <li data-xf-list-type="ul">They are/ were all based and set up in the EU;</li> <li data-xf-list-type="ul">London-based law firms were instructed to restructure these high-profile businesses to gain access to the UK jurisdictions;</li> <li data-xf-list-type="ul">As a Member State of the EU, proceedings in the UK are automatically recognised in the EU under the provisions of the EU Insolvency Regulations.</li> </ul><p>After Brexit, this would all change. The UK government indicated that EU Insolvency laws will be repealed on Brexit day. The biggest concern is the inevitable outcome of UK proceedings losing its competitive advantage in attracting EU-based companies to seek relief in the UK. There is no point in doing so if UK proceedings will no longer be recognised in the EU and vice versa. While the UK government also indicated that the current UK regime will be improvised to increased its competitiveness in a post-Brexit, law firms remain sceptical (for example, <a href="http://www.allenovery.com/SiteCollectionDocuments/UK_Corporate_Insolvency_Reforms_Factsheet.pdf" target="_blank">http://www.allenovery.com/SiteCollectionDocuments/UK_Corporate_Insolvency_Reforms_Factsheet.pdf</a>)</p><p></p><p>PS: Just in case you missed it, do check out these other awesome updates and in-depth analysis on Brexit in other ways.</p><ul> <li data-xf-list-type="ul"><a href="https://www.thecorporatelawacademy.com/brexit-impact-on-debt-financing-transactions/" target="_blank">https://www.thecorporatelawacademy.com/brexit-impact-on-debt-financing-transactions/</a> </li> <li data-xf-list-type="ul"><a href="https://www.thecorporatelawacademy.com/forum/threads/the-uk-parliament-votes-on-brexit-tuesday-15-january-2018-7pm.1115/page-2#post-10212" target="_blank">https://www.thecorporatelawacademy.com/forum/threads/the-uk-parliament-votes-on-brexit-tuesday-15-january-2018-7pm.1115/page-2#post-10212</a> </li> <li data-xf-list-type="ul"><a href="https://www.thecorporatelawacademy.com/forum/threads/the-impact-of-brexit-on-law-firms-a-post-referendum-analysis.35/" target="_blank">https://www.thecorporatelawacademy.com/forum/threads/the-impact-of-brexit-on-law-firms-a-post-referendum-analysis.35/</a></li> <li data-xf-list-type="ul"><a href="https://www.thecorporatelawacademy.com/forum/threads/brexit-updates-news-and-resources.818/#post-5985" target="_blank">https://www.thecorporatelawacademy.com/forum/threads/brexit-updates-news-and-resources.818/#post-5985</a> </li> </ul></blockquote><p></p>
[QUOTE="Bugsy Malone, post: 10382, member: 201"] [B]3. [U]A Brexit update and its impact on the debt restructuring business ([USER=980]@Angel[/USER])[/U][/B] [B]The story [/B] [I]An update:[/I] [LIST] [*]First, the exit deal (that Mrs May had spent 2 years negotiating and renegotiating countless times) was rejected by the MPs for the [B]second [/B]time. [*]Second, on the following day, MPs rejected the possibility of a [B]no-deal Brexit[/B] as well. [*]Third, MPs voted in favour of a 3-month[B] extension[/B] of Article 50, bringing the new Brexit day to 30th June. [LIST] [*]The government must now make an official request for the extension [*]The EU will have to make a unanimous decision [/LIST] [/LIST] As pointed out by The Economist ([URL]https://www.economist.com/leaders/2019/03/14/oh-uk-what-next-for-brexit[/URL]), Mrs May’s tactics from here on is somewhat equivalent to compelling MPs to choose from options that they are disenchanted with, and neglect alternatives that MPs are convinced to be better. From a constitutional and political point of view, it seems that regardless of the outcome, given the divided views and factions, a truly consenting parliamentary majority to move things forward in carving the future relationship between the UK and the EU is harder than ever. [B]Impact on businesses and law firms (specifically, debt restructuring):[/B] The amount of literature covering the impact of Brexit in all practical and possible ways are countless. But, just to bring things closer to home for aspiring commercial lawyers, the legal practice of debt restructuring in the UK is perhaps an area worth considering more closely. [I][U]Background: [/U][/I] A company/ business can run into financial difficulties anytime. This could be due to various factors that may or may not be within the control of the company. For example, a change in consumer taste (current high-street brands), economic downturns (Lehman Brothers), unprecedented geopolitical changes, or simply just mismanagements within the company (Patisserie Valerie). Sure, the company can try to inject additional funds by obtaining more debt [I](i.e. bank- loans or issuance of bonds)[/I], reduce costs by increasing efficiency or even change the strategic direction of the business as a whole. However, if its financial difficulty is too substantial ([I]i.e. its inability to pay its creditors is too much[/I]), it is doubtful that these internal modifications would do much help. The company will then only have two choices; to close down the business altogether or to seek help to ‘rescue’ the company. The legal regime available in the UK to restructure a company’s debt [I](i.e. to reorganise/ renegotiate/ propose new terms with the creditors to give the company some leeway to continue business and not be closed down just because of some cash-flow problem)[/I] is a popular one to domestic, EU and foreign companies. Whether it is the UK courts’ pragmatic approach or the availability of creative ways to restructure a business in the UK that are unavailable in other jurisdictions (including the EU), the legal service to advise major companies on debt restructuring is a big business to London law firms. Just to name a few, Clifford Chance and Kirkland & Ellis have been involved in seminal restructuring cases such as with a German-based group, Rodenstock. Dentons, Slaughter and May and Linklaters were involved in the restructuring of Luxembourg-incorporated group, Wind Hellas. For a more recent example, Shearman & Sterling recorded an interesting podcast the restructuring of Greek-based Frigoglass at [URL]https://www.shearman.com/perspectives/2018/09/podcast-on-frigoglass-restructuring[/URL] . [I][U]What Brexit means:[/U][/I] What these companies have in common is: [LIST] [*]They are/ were all based and set up in the EU; [*]London-based law firms were instructed to restructure these high-profile businesses to gain access to the UK jurisdictions; [*]As a Member State of the EU, proceedings in the UK are automatically recognised in the EU under the provisions of the EU Insolvency Regulations. [/LIST] After Brexit, this would all change. The UK government indicated that EU Insolvency laws will be repealed on Brexit day. The biggest concern is the inevitable outcome of UK proceedings losing its competitive advantage in attracting EU-based companies to seek relief in the UK. There is no point in doing so if UK proceedings will no longer be recognised in the EU and vice versa. While the UK government also indicated that the current UK regime will be improvised to increased its competitiveness in a post-Brexit, law firms remain sceptical (for example, [URL]http://www.allenovery.com/SiteCollectionDocuments/UK_Corporate_Insolvency_Reforms_Factsheet.pdf[/URL]) PS: Just in case you missed it, do check out these other awesome updates and in-depth analysis on Brexit in other ways. [LIST] [*][URL]https://www.thecorporatelawacademy.com/brexit-impact-on-debt-financing-transactions/[/URL] [*][URL]https://www.thecorporatelawacademy.com/forum/threads/the-uk-parliament-votes-on-brexit-tuesday-15-january-2018-7pm.1115/page-2#post-10212[/URL] [*][URL]https://www.thecorporatelawacademy.com/forum/threads/the-impact-of-brexit-on-law-firms-a-post-referendum-analysis.35/[/URL] [*][URL]https://www.thecorporatelawacademy.com/forum/threads/brexit-updates-news-and-resources.818/#post-5985[/URL] [/LIST] [/QUOTE]
Insert quotes…
Verification
Our company is called, "The Corporate ___ Academy". What is the missing word here?
Post reply
Forums
Aspiring Lawyers - Interviews & Vacation Schemes
Commercial Awareness Discussion
Commercial Awareness Update - March 2019!
Top
Bottom
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.
Accept
Learn more…