Page 392 - วารสารกฎหมาย ศาลอุทธรณ์คดีชํานัญพิเศษ
P. 392

วารสารกฎหมาย ศาลอุทธรณ์คดีชำานัญพิเศษ



            On 31  January 2020 the UK left the European Union. With the end of the transition
                  st
            period on 31  December 2020, these instruments no longer apply in the United Kingdom,
                        st
            which puts the success of the English restructuring practice in jeopardy. Section II.
            explores the European restructuring practice based on English law as it emerged in the

            aftermath of the Global Financial Crisis and briefly summarizes the recent reforms
            introduced by the Corporate Insolvency and Governance Act 2020. In section III.
            we analyse the benefits of the EU regime on cross-border insolvencies from the UK’s

            perspective prior to Brexit, and in section IV. what the current post-Brexit regime looks
            like. Schemes of arrangement will be dealt with in section V. Section VI. concludes.



                            II. Corporate Restructuring after Lehman



                    In a typical private equity transaction,  the target group’s publicly traded holding
                                                        5
            company will be acquired by an acquisition vehicle (BidCo) held through a string of
            special purpose entities leading up to the private equity investors and co-investors as

            ultimate shareholders. Senior debt may be issued by BidCo, fully secured on BidCo’s
            shareholding in the target company. The latter may grant additional security, usually
            over its shareholdings in the operating subsidiaries, which may grant further security

            and/or furnish guarantees. The junior debt tranches (second lien, mezzanine and other
            junior debt) will be subordinated to the senior tranche, either contractually on the basis

            of an inter-creditor agreement, and/or structurally where the junior debt has been issued
            by financing vehicles further up in the corporate hierarchy. This structure greatly
            facilitates a sale by the senior lenders of the firm’s business as a going concern, without

            interference from junior lenders and shareholders. The underlying documentation usually
            contains extensive provisions on the enforcement and release of security.

                    Against this background, (pre-pack) administration in combination with schemes
            of arrangement has emerged as a very effective restructuring option for firms in financial






                    5  L Gullifer and J Payne, Corporate Finance Law – Principles and Policy (Oxford: Hart, 2nd edn 2015)
            773–780.



            390
   387   388   389   390   391   392   393   394   395   396   397