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Corporate Restructuring Summit

Corporate Restructuring Summit. David Baxter A&L Goodbody. 25 September 2013. R ecent legal developments in Restructuring. Current landscape New & f orthcoming legislation Pensions & insolvency Deleveraging update. Current Landscape. Retail examinerships still in vogue

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Corporate Restructuring Summit

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  1. Corporate Restructuring Summit David Baxter A&L Goodbody 25 September 2013

  2. Recent legal developments in Restructuring • Current landscape • New & forthcoming legislation • Pensions & insolvency • Deleveraging update

  3. Current Landscape • Retail examinershipsstill in vogue • NAMA’s first Irish portfolio loan sale (including a JV arrangement) • Large corporate restructurings - out of court & consensual • New debt holders working through loan books;inter-creditor tensions remain within syndicates • Steps taken to improve liquidity in property market e.g. R.E.I.T.s legislation • Impact of IBRC liquidation

  4. New & forthcoming legislation • IBRC Act, 2013 • Companies Bill, 2012 • Amendments to EU Insolvency Regulation • Personal Insolvency Act, 2012 • Land and Conveyancing Law Reform Act, 2013

  5. Land and Conveyancing Law Reform Act, 2013 • The legislation addresses a specific loophole arising from …. • …. Start Mortgages Limited v Gunn decision • 2009 Act unintentionally removed right of a lender to seek repossession of registered property where mortgage created pre 1 December 2009 • Act does not have retrospective application; key date: 24 July 2013 • Possibility of adjournments when principal private residence at play

  6. Companies Bill, 2012 • Codification of directors’ duties • Receivership • More extensive powers; although short of NAMA receivers’ powers • Examinership • SME examinerships at Circuit Court • Liquidation • Reducing court’s supervisory role • Threshold to petition to wind up is now €10,000

  7. Amendment of EU Insolvency Regulation • Review after a decade timely • EC publishes reform proposals in December 2012 • Key proposed changes: • More clarity around COMI – impact on forum-shopping? • Scope of Regulation extended – inclusion of UK schemes?

  8. Pensions & Insolvency • Key English Supreme Court decision (Nortel/Lehman) on 24 July 2013 • Broad powers of UK Pensions Regulator; ranking of contribution notices • Relevance in Ireland • Irish subsidiary part of group that sponsors a UK DB scheme • IrishCo a target for UK Pensions Regulator • Secured and preferential creditors now not at risk • Challenges for DB pension trustees in Ireland

  9. Deleveraging • Source: Department of Finance and NTMA • Cumulative deleveraging at AIB, BOI & PTSB to end-Dec 2012 of €57bn (81% of 3yr target); €20.8bn achieved in 2012 • AIB - disposals are ahead of plan and the programme is nearing completion. Remaining deleveraging required to reach their target is to be achieved through loan work-out and amortisation. • BOI - has completed it’s disposal plan and the remaining deleveraging is on target and forecast to be achieved through rundown of non-core loan books. • PTSB- deleveraging programme postponed pending consideration of EC Restructuring Plan.

  10. Loan Portfolio Sales - 2013 • Why not more portfolio loan sales in 2013? • Impact of IBRC loan sales • Some unhelpful domestic case law • Preference to sell single assets • For some banks, deleveraging targets have been met • Reaction to pricing on 2012 loan portfolio sales • Banks not in a position to to crystallise losses • Stress-testing banks’ balance sheets in H1 2014

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