Restructuring. Advanced Negotiation Issues & Trends

Transcription

1 Restructuring Advanced Negotiation Issues & Trends This course is presented in London on: 13 November 2017, 22 January 2018, 27 April 2018, 02 November 2018 The Banking and Corporate Finance Training Specialist

2 Course Objectives Participants will: Have explained to them the restructuring route map, examining the numerous steps and options Learn about how to get a seat at the negotiating table tools and techniques Consider schemes of arrangement their relevance and how they work Be taught Course about Overview pre-packs and their use in the UK and elsewhere in Europe Master restructuring techniques under U.S pathways Get to grips with (i) debt for debt and (ii) debt for equity swaps Gain an appreciation of issues specific to syndicated / laminated deals Gain an understanding of the likely impact of Brexit Be appraised of the importance of the draft EU Harmonisation Directive on Restructuring Background of the Trainer The trainer is a consultant, public speaker and author. He provides training programmes globally to a blue-chip client base on private equity, debt finance, loan documentation and restructuring. He is a senior consultant with Debt Xplained, with Grant Thornton UK (Debt Advisory) and is also a Senior Advisor to KPMG Finland. He has spoken at conferences in the UK, Europe, Australasia & South Africa. He provides training to a wide range of clients on a bespoke in-house basis & publicly through Redcliffe Training Associates. Additionally, he is the Programme Director for the infrastructure/project finance module for the MBA programme at the Cass Business School in London. Course Content Restructuring routemap: 6 steps, 10 options The Restructuring route-map 6 key steps Ten key options for restructuring Overview Restructuring methods Out of court approach Scheme of Arrangements generally UK tools Administration & CVAs (availability to non-uk firms) Prepacks availability in UK, the Continent Chapter 11 (USA) Getting a seat at the negotiating table tools and techniques Levers for Senior secured lenders (pre-default & post default) Levers for Junior secured lenders (pre-default & post default) Levers for unsecured junior lenders Lessons from European Directories & other key cases Levers for unsecured (trade) creditors Levers for equity holders (Management and PE) Valuation issues Why valuation matters

3 Theoretical approach why & where it s wrong Landmark cases (IMO & Stabilus) where they went wrong and right A more practical approach to valuation Schemes of Arrangement Jurisdiction Application to foreign companies/jurisdictions Application to Foreign companies Germany (Rodenstock, Apcoa), Spain (Cortefiel), Holland (Magyar Telecom) EU Judgements Regulation founding jurisdiction in England Art 8 (how many creditors must be in England) review of relevant cases Art 25 (the English jurisdiction clause) relevant cases on problem areas Different types of creditor Schemes Secured Debt transfer (IMO) Unsecured debt transfer (e.g. MyTravel, Cattles) Minorities scheme Specific issues in Schemes Typical creditor groups Can Schemes bind claims of secured creditors? Impact on Inter-creditor rights and obligations Moratoria pending sanction of a scheme (q.v. Vinashin) Issue affecting Class Collateral rights vs interests Who are the Creditors & what happens if they wear two hats (relevant cases) What about fees Using the appropriate Comparator Pre-packs, Administration and CVS UK and Europe Administration general overview pros & cons CVAs general overview pros & cons UK Pre-packs generally use and abuse Operational pre-pack Purpose of a pre-pack Impact on key stakeholders Availability in selected countries on the Continent France (Autodistribution case) Netherlands (Schoeller Arca case) Germany (Schutzschirmverfahren + Insolvency Plan) Spain (Spanish Insolvency Act 2011) Case Study: Review of McCarthy & Stone (Pre-packaged Administration & Schemes) Restructuring under U.S pathways Chapter 11 and Chapter 15 What is the gal of Chapter 11 Aspects of Chapter 11 General application and founding jurisdiction Procedure, Timing Automatic stay - Worldwide impact (practical application) Cherry picking contracts 363 Asset Aales DIP funding

4 Role of Management The Chapter 11 Plan Classes & voting (who votes who doesn't) Requirements for Craming-down Cram up Rationale & application Examples in practice Other restructuring options in the U.S. Pre-packs Pre-arranged plan Out-of-court workouts Debt for Debt & Debt for Equity swaps overview of key issues Issues for new equity/debt Shareholder protection Information issues Exit issues Priority and ranking Form of new & old money Pay-in-Kind (PIK), Pay-if-you-Can (PIYC), Pay-if-you-Want (PIYW) Warrants Preference shares Convertibles Equity (ranking, types) Pension deficit 4 Equity swap (Uniq case) Methods for calculating the amount of equity / PIK Credit bidding Is it available under the Intercreditor (2009 vs 2012) The Stabilus position Credit bidding in action Issues specific to syndicated / laminated deals Role of the Facility And Security Agent Syndicate composition who is in /out (sub-participations) Steering Committees issues in formation Standstills agreements key terms, difficult issues Impact of Brexit COMI Events of default MAC clauses Force majeure Passporting issues Governing Law and Jurisdiction CASE: Calculating the equity warrants in distress; reviewing other recovery options; key issues for the lenders to consider post D4D or D4E Draft EU Harmonisation Directive on Restructuring Background

5 The three minimum key elements Review of the Key principles Relevance of Brexit Course Summary The programme will review the impact of the draft ECB guidance on leveraged transactions. The course is aimed at lenders, sponsors, lawyers, accountants and other advisers involved in this sector, management and other professions (investment advisers) operating in the European environment who require a greater insight into the key issues which arise in financial restructurings. The course will also discuss briefly the potential impact of Brexit on existing and new documentation. Whilst markets remain benign certain sectors continue to experience unfavourable conditions; oil & gas, mining & minerals and, for differing reasons, retail. Given these challenges businesses within these sectors, face increasing pressure to restructure to creating a viable business with a sustainable capital structure. The global nature of many firms and financing techniques has generated a more eclectic approach to restructuring techniques with firms increasingly willing to indulge in forum shopping to access the most suitable restructuring pathway. The flexibility offered by UK Schemes of Arrangement coupled with its availability in many jurisdictions outside the UK has seen Schemes used a diverse range of jurisdictions particularly in Germany, Spain, Holland but also GIC, Russia and Vietnam. Some EU jurisdictions have responded by introducing more flexible restructuring pathways which provide greater flexibility e.g. Spain, Germany and France. This programme covers some of the more controversial areas in Schemes which have arisen in practice including whether and to what extent the EU Judgements Regulation applies to Schemes. Cases have relied on Art 8 or Art 25 but the current Gulf Keystone scheme is relying on a new approach. Whilst many of the pathways available in Europe offer increasingly flexible restructuring techniques (e.g. Pre-packs ), the U.S., through Chapter 11, provides a unique combination of tools to implement both financial and operational restructuring, such as DIP funding and the ability to terminate contracts. The recent U.S case Berau Capital case in the U.S. will also serve to expand the availability of Chapter 11 to foreign debtors. Pre-packs have long been available in the UK but have also been applied in numerous jurisdictions on the Continent (e.g. France, Spain and Holland). Pre-packs are often more a term of art and the approach and issues are broadly similar since the issues tend to transcend jurisdictions. This programme covers Prepacks from a European perspective but draws on the experiences in the UK market. UK Administrations provide a wrapper with a moratorium giving firms breathing space to implement the most effective method of restructuring. These pathways may be available to non-uk companies via a CoMi shift and have been used where the local regime is too

6 inflexible. The programme reviews the key issues and cases in Administration as well as CVAs particularly where they have been used by non-uk firms (e.g. Schefenacker). Credit bidding has also found its way into the restructuring toolkit (vide European Directories and Stabilus cases). In light of the ease of access to Chapter 11 together with its requirements and flexibility offered by Chapter 11, the programme will devote some time to Chapter 11, its requirements, implementation. Consideration will also be given to out of court restructurings in the U.S. finally, the programme will take a comparative view of Schemes vs Chapter 11. Valuation lies at the heart of any restructuring and the programme looks briefly at the current approaches to valuation and analyses the approaches used. Conventional wisdom suggests that and theoretically, parties who are out-of-the-money play no part in proceedings since restructurings follow the priority of claims ensconced in law (e.g. employee claims) or a contractual framework via the payment waterfall. In practice this is not always the case and, particularly in more complex deals, the key issue is to get a seat at the restructuring table to influence the process. This course explores the negotiating levers which various parties can use to obtain a seat at the negotiating table together with the restructuring methods, solutions, techniques and tactics for managing all the players as well as the practical issues which will face parties in leveraged and unleveraged deals and, drawing on the trainer s experience, offers a practical template on how to respond to the issues they are likely to face. The programme will also review the key points of the Draft EU Directive harmonising restructuring and insolvency matters published on 22nd November :00-17:00 London Standard Price: 695 +VAT Membership Price: VAT Delivering this course in-house for you to a number of participants could be very cost effective.