Global Insolvency & Restructuring Review 2012/13

Global Insolvency & Restructuring Review 2012/13

Global Insolvency & Restructuring Review 2012/13


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<strong>Global</strong> <strong>Insolvency</strong>& <strong>Restructuring</strong><strong>Review</strong><strong>2012</strong>/<strong>13</strong>Edited by Lisa Paul

Editor: Lisa PaulAdvertising & Co-publishing Sales Managers: Grant Lee and Roger HarperDirectory Research Manager: Sophia TelferAdvertising Administrator: Karolina LubeckaDistribution Manager: Lisa HuxleyMarketing Manager: Els DesprietPublisher: Adrian HornbrookEditorial Office: 11 North Hill, Colchester, Essex CO11DZ, UKTel: +44 1206 579591, Fax: +44 1206 560121Website: www.euromoney-yearbooks.comTo order any Euromoney product, call the Euromoney Hotline +44 (0) 20 7779 8999 orin the US +1 212 224 3570 or via email at hotline@euromoneyplc.comOrigination by: Trait Design Limited, Tiptree, Essex, UKPrinted by: Wyndeham Grange Limited, Brighton, W. Sussex, UKAlthough every effort has been made to ensure the accuracy of the information contained in this bookthe publishers can accept no liability for inaccuracies that may appear.All rights reserved. No part of this publication may be reproduced in any material form by any means whether graphic,electronic, mechanical or means including photocopying, or information storage and retrieval systems without thewritten permission of the publisher and where necessary any relevant other copyright owner. This publication – inwhole or in part – may not be used to prepare or compile other directories or mailing lists, without written permissionfrom the publisher. The use of cuttings taken from this directory in connection with the solicitation of insertions oradvertisements in other publications is expressly prohibited. Measures have been adopted during the preparation of thispublication which will assist the publisher to protect its copyright. Any unauthorised use of this data will result inimmediate proceedings.© Copyright rests with the publishers, Euromoney Trading Ltd, England. ISBN 978 178<strong>13</strong>7 011 7

ContentsStrategies for use of bankruptcy law by creditors in China 67Zhongzi Law OfficeNew Danish insolvency regulation has not been adapted by the market. 71<strong>Restructuring</strong> is still based on out-of-court restructuringsDeloitte <strong>Restructuring</strong> Services<strong>Insolvency</strong> and corporate restructuring issues in Finland: Current examples of swift restructuring proceedings 77Castrén & Snellman Attorneys Ltd.Finland – Financial analysis and M&A transactions as part of enterprise restructuring 81Grant Thornton Finland OyGrasping the French restructuring market 84DC Advisory PartnersRecent developments in French restructurings 89Allen & Overy LLP / SCP Santoni & Associés<strong>Restructuring</strong> trends in Germany 95PricewaterhouseCoopersObjective accomplished? Improving restructuring options in Germany through insolvency reform (“ESUG”) 100Salans LLPRehabilitation: A new restructuring proceeding for Greece 104PotamitisvekrisWinding-up proceedings of financial undertakings in Iceland 109LOGOS legal servicesIreland – Corporate debt restructuring: Solutions in a distressed marketplace 114PwC IrelandItaly – Settlement of over-indebtedness crises 118Lombardi Molinari e AssociatiLuxembourg – Being a bondholder in a distressed situation:The debt equity swap route – a vessel fraught with pitfalls? 122OPF Partners<strong>Insolvency</strong> and restructuring: The Malaysian position 127Shearn Delamore & Co.Recent developments in Dutch restructurings <strong>13</strong>1Loyens & Loeff N.V.

Contents<strong>Restructuring</strong> in Portugal – the time has come! <strong>13</strong>7KPMG PortugalRussia: Emerging playground for a savvy distressed investor 142Alvarez and Marsal<strong>Review</strong> of developments in insolvency law in Singapore for 2011 147Drew & Napier LLCBusiness recovery, restructuring and performance improvement in South Africa 152PricewaterhouseCoopersBusiness rescue in South Africa 157Bowman GilfillanSpain: Key new legislation introduced by the <strong>Insolvency</strong> Reform Law 162GarriguesShare pledges and enforcement in Sweden: The battle between the pledgor and the pledgee 167Setterwalls AdvokatbyråTranslation risks and their impact upon company valuation: An overview of the Swiss public companies 171Ernst & Young AGPitfalls for a foreign entity in distress that maintains assets or an operation in Switzerland 175Homburger AGCorporate restructuring in Thailand 180Hunton & Williams (Thailand) LimitedRecent developments in Ukrainian distressed debt disposal strategies 185Vasil Kisil & PartnersDirectory 191Contributors 258Advertisers index 262

Foreword:Where are we now…and where are we headed?by Gordon Stewart, President, INSOL International and Partner, Allen & Overy LLPOpacityNever in my professional career have we (in the UK, in Europe, globally…) been in such a time of flux nor faced sucha period of uncertainty. Economic challenges as great as have been faced in a generation (or three) confront us.Outcomes are unclear. Yet an opaque time such as this presents opportunities. It can provide the impetus andmotivation – the incentive – for change.<strong>Global</strong> trade – globalisation – is a fact. Cross-border activity has never been so great. This involves the movementof goods and services and also of ideas, from one legal jurisdiction to another. The law must not only keep up withthese developments but it must facilitate them or it will fail those it seeks to serve. 1 In both my part-time job asPresident of INSOL International and my full-time job as head of Allen & Overy’s <strong>Global</strong> <strong>Restructuring</strong> Group, I seechange and the opportunity for change in the domestic insolvency and restructuring laws of jurisdictions in bothemerging markets and the developed world. I also see the tantalising prospect of mankind’s great achievement – whatsets us apart from the rest of the animal kingdom – that of our capacity for co-operation to mutual benefit, beingseen in the fields of cross-border insolvency recognition and, more dramatically, bank resolution.Emerging markets and capacity buildingThere are three inter-linked areas in which emerging markets need to build capacity. They need good laws. A goodterminal liquidation law, an efficient, modern rescue statute, together with a developing rescue culture. And a humanepersonal bankruptcy law entitling individuals and sole traders to have a second chance, hence fostering, or at aminimum not unduly penalising, entrepreneurial activity. Related to these fundamental laws are good laws of credit, 2which encourage inward flows of capital and investment, and corporate governance laws to strike a balance betweennot unduly threatening directors whose companies are going through a period of financial difficulty yet checking anytendency on their part to be reckless and trade on at the expense of their creditors.Now, new laws create rights and, with them, expectations. Expectations that the country’s courts and judgeswill enforce those rights speedily, with efficiency and certainty. So a good route to justice is a must. If a mature andsuccessful court system seems a long way in the distance for some jurisdictions then there are short-term fixesavailable, pending the ideal medium-term solution.Perhaps for example outsourcing is a way forward: witness the widespread adoption of English law – andemployment of retired judges from England and other common law countries – by the DIFC in Dubai. 3 Othercountries are being helped to build on an existing ADR platform. 4 Countries with a shared culture are looking topool their resources to create a multi-jurisdiction court of high quality. 5And, finally, the creation of usable insolvency laws will stimulate a demand for insolvency professionals to act asreceivers, administrators, supervisors, examiners, trustees and liquidators. They are discharging significantresponsibilities and also handling other people’s money. If they are to obtain respect for their work, they need tobe trained to a proper level, to keep up to date and to meet high ethical standards. This requires a system ofqualifications and continuing education, of supervision and regulation.But for those countries who sigh in despair at the thought of how much is involved in setting all this up, there isgreater hope than ever before. INSOL International, which often works closely with the World Bank, as one of itsmain activities offers guidance on the range of ‘best in class’ options available for adoption from what has beenseen to work in the developed world. 6 Ideas are crossing borders too.New rescue lawsCountries in emerging markets need laws that encourage business rescue to enable value preservation and to saveemployment. And the laws need to work. Countries must be prepared to amend their laws in the light ofexperience. Too many jurisdictions have rescue laws on their statute books which just gather dust. It would beinvidious to name them here. But on a brighter note, I will just reflect briefly on two countries at opposite ends ofthe scale perhaps who have, or are about to, introduce change in their rescue laws.1

South Africa has not enjoyed a culture of business rescue. Corporate financial difficulty has all too often led toliquidation and break up, with the consequent loss of value to stakeholders. But South Africa has a new rescue lawand a new profession of business rescue practitioners. The law is only starting to bed down and anecdotalevidence suggests many examples of misuse and of it being resorted to too late. But that is to be expected with anew law and, with guidance from South Africa’s substantial body of talented professionals and from its courts, it willbegin to pay dividends – with or without further legislative intervention.Germany, on the other hand, is a developed economy with often-used rescue/insolvency laws. But as financialstructures have become more complicated and creditor constituencies have splintered, these laws have beenunable to deliver the deal that the majority of the in-the-money creditors wish to see implemented. So there hasbeen a steady flow of companies which change their centre of main interests to England where schemes ofarrangement, voluntary arrangements and administrations 7 are able to implement the desired restructurings. 8Germany has reacted to this by passing a new law, updating its existing laws, with a view to address the perceivedfailings of, and gaps in, the old law. It came into force on March 1, <strong>2012</strong>.Too big to avoid a euphemism…The demise of Lehman, and the potential collapse of a number of major deposit-taking institutions, shocked many inthe worlds of politics, finance, law and accountancy – quite apart from banking. The size of the challenge of rescuingthe saveable bit of a bank in the time between markets closing in the West on a Friday evening and Tokyo openingon a Monday morning appalled many. But the FSB, the IMF, the Basel Committee, the EU, the IndependentCommission on Banking (in the UK) among others, have been coming to grips with the many-headed hydra that isbank insolvency. Or to give it its more comforting euphemism, bank resolution.Living wills, bail-ins, SIFIs, resolution colleges, crisis management groups, bridge banks, are just some of theconcepts and acronyms in the mix. The desideratum is for all material economies to have domestic ‘strong arm’laws of a decent standard, for all relevant officials in these countries to have up-to-date blueprints of the majorfinancial institutions (including a weekend crisis rescue plan), for those officials to have compared notes on who willdo what should such a fateful weekend come to pass AND for all those countries to have introduced lawsenabling cross-border co-operation to facilitate a global rescue of each major institution.You may think that this is, to put it mildly, a tall order. Or, in the demotic, a big ask. But as President Kennedysaid of going to the moon: ‘Hard things make us better’.Plain vanilla cross-border recognitionThe crafting of the UNCITRAL Model Law on cross-border insolvency was a great achievement. Its adoption by, todate, some 20 countries (including the US and the UK) is a good thing. The failure by the rest of the world to adoptit is a bitter disappointment. The intra-EU recognition laws are useful as are similar arrangements of other regionalgroupings (North America, Scandinavia, etc). But the general failure of so many countries to provide even basicrecognition of insolvency procedures of ‘foreign’ countries on an efficient – or, even, any – basis is to our collectivediscredit. Many of these countries are developed countries with mature economies fully aware of cross-border activityand its continuing growth. Something must be done.Islamic financeIslamic or Shari’a-compliant finance provided by major financial institutions – in recent times – is really only some30 to 40 years old. 9 Accordingly, consideration of the implications and detail of its position in the world of crossborderrescue is still only in its comparative infancy. Much needs to be done, and quickly. Islamic finance has thefundamental difference – when compared to Western methods – of not being based on the concept of credit(of debtor and creditor) but of being based on the idea of ‘trade’. The provider of finance and the recipient areengaged in a joint venture based on trade. 10 Title transfer rather than a charge securing a loan is the principal ‘security’.The World Bank has a task force looking at the whole area and this is to be applauded. Finance of an Islamicnature is increasing year on year and the quicker we all grapple with the nuances of differing methods of finance inthe field of business rescue the less chance there is of misunderstandings leading to failed restructuring attempts.Notes:1Some commentators consider that the rise of Britain in the 18th and 19th centuries is owed in part to theflexibility of its laws to adapt to changing circumstance and to enable rather than hinder innovators andentrepreneurs in their activities.2Or of Islamic trade-based financial activity – see below.2

345678910DIFC: Dubai International Finance Centre. One recent DIFC law – Decree 57 – is an interesting mix of English andUS law.The work of the World Bank in Montenegro falls into this category.Note the initiatives of the OHADA French-speaking countries of north-west Africa.Mauritius to its great credit has just introduced a whole new set of ethical rules and guidance for its insolvencypractitioners.Often of the ‘pre-pack’ type.Germany, it should be said, is not the only continental European country whose companies have felt the need tomigrate their CoMIs to England.Observation of an Islamic law professor at a recent conference in the Middle East.Using these terms in a non-technical sense.3

Harmonising and modernising insolvency law: The work of theUnited Nations Commission on International Trade Lawby Jenny Clift, Senior Legal Officer, (Secretariat of UNCITRAL), Office of Legal Affairs, United Nations 1Recognising that disparities in the national laws governing international tradecreated potential obstacles to the flow of trade, in 1966 the GeneralAssembly established the United Nations Commission on International TradeLaw to serve as the vehicle by which the United Nations could play a moreactive role in reducing or removing these obstacles through modernisationand harmonisation of law.In the early 1990s, when the Commission turned itsattention to insolvency for the first time, the prevailingwisdom was that insolvency law was among the areasof law least amenable to international harmonisation orcooperation. During a discussion of the growingsignificance of cross-border insolvency issues at a 1992UNCITRAL Congress, it was suggested by onecommentator that: “… it is not practical to think ofharmonising the bankruptcy laws of … differentjurisdictions: in the evolution of international law we aresimply too far away from any time when we couldexpect countries to have similar bankruptcy laws in aneffort to stimulate international trade.” 2For that reason, attention focused at first onproviding an interface between national insolvencylaws to facilitate the conduct of cross-borderinsolvency proceedings and encourage cooperationand coordination between the various stakeholders.The UNCITRAL Model Law on Cross-Border<strong>Insolvency</strong> was completed in 1997. 3Following the events of the late 1990s, the efficacyof national insolvency laws and practices became arecurring theme in a number of international forumsand it was increasingly recognised that there was aserious and urgent need to strengthen nationalinsolvency regimes, not only as a means of preventingor limiting financial crisis, but also of managing crisisthrough rapid and orderly workouts from excessiveindebtedness. New impetus was given to thedesirability of pursuing, if not substantiveharmonisation, the development and adoption ofglobal standards and norms that could inform andshape insolvency law reform. In response, UNCITRALprepared the Legislative Guide on <strong>Insolvency</strong> Law,which was completed in 2004. The Guide sought notonly to articulate the broader policy settings thatshould underpin modern insolvency laws, but also toidentify the goals and core content of such laws. Thesuccessful completion of these two texts suggestedthat much had changed since 1992 and that countriescould now be expected to view insolvency law as asubject for reform through modernisation andharmonisation.The Legislative Guide focused largely on corporatedebtors. Whilst acknowledging that the business ofcorporations, both domestically and internationally, isincreasingly conducted through corporate orenterprise groups and that particular difficulties arisewhen two or more members of such groups becomeinsolvent, time constraints limited the possibility ofincluding in the Guide more than a brief introductionon the insolvency of groups.Despite their ubiquity, both internationally anddomestically, very little legislation refers specifically toenterprise groups or recognises the “enterprisegroup” as a legal concept, except in limited ways forvery specific purposes, such as fiscal and accountingpurposes. Very few, if any, states have a comprehensiveregime for the treatment of groups in insolvency, withthe result that each group member must beadministered separately. For groups that involve alarge number of members, separate administrationcan result in fragmented, uncoordinated treatmentthat pays little regard to the integrated nature of thebusiness when the group was financially healthy. Theinternational character of a group (and the majority ofgroups do operate cross-border), simply adds to thecomplexity. The onset of insolvency turns a cohesiveinternational business into a set of potentiallydisconnected segments in different countries, subjectto different insolvency laws, each embodying theparticular State’s choice of social, economic andfinancial policies, with different priorities and differentsets of creditors claiming different assets underdifferent rules.To specifically address the insolvency treatment ofgroups, the Legislative Guide was supplemented in2010 with part three, which offers some solutions forboth domestic and international group insolvencies.However, facilitating the cross-border treatment ofgroup insolvencies remains a challenge. While partthree offers solutions for groups that focus on4

cooperation and coordination by expanding theprinciples of chapter IV of the Model Law, thequestion of whether (and if so, how) a morecomprehensive regime might be developed remains.One suggestion has been to adapt the concept of“centre of main interests” as it applies to an individualdebtor to apply to an enterprise group so that allproceedings with respect to group members could becommenced in, and administered from, a single centrethrough one court and subject to a single governinglaw. Other suggestions have been to identify acoordination centre for the group, which might bedetermined by reference to the location of the parentof the group or to permit group members to applyfor insolvency in the State in which proceedings havecommenced with respect to the insolvent parent ofthe group. These options were considered by theUNCITRAL working group on insolvency andultimately found to be unworkable.Part three of the Guide notes that the significantand difficult issues raised by these suggestions “relateto the very nature of multinational enterprise groupsand how they operate –how to define whatconstitutes an enterprise group for insolvencypurposes and identify the factors that might beappropriate to determining where the group centre islocated, assuming that there is only one centre foreach group – as well as to questions of jurisdictionover the constituent members of the group, eligibilityto commence insolvency proceedings and applicablelaw. Others relate to the challenge of reaching broadinternational agreement on these issues in order toachieve a consistently, widely applied and, possibly,binding solution that will deliver certainty andpredictability to the cross-border insolvency ofenterprise groups.” 4Various means have been developed to facilitatecooperation in cross-border cases; while the ModelLaw provides the requisite legislative framework, itmerely lists various possible forms of cooperationwithout providing further guidance as to howcooperation might be implemented. Faced with thedaily necessity of dealing with insolvency cases andattempting to coordinate their administration in theabsence of widespread adoption of facilitating nationalor international laws, the international insolvencycommunity has developed various tools, includingcross-border insolvency agreements (or protocols).These are designed to avoid potential proceduralconflicts arising in cross-border cases and facilitate theresolution of issues that do arise by promotingcooperation between stakeholders. In 2009,UNCITRAL adopted the Practice Guide on Cross-Border <strong>Insolvency</strong> Cooperation, which compilespractice with respect to these agreements for theinformation of judges, insolvency practitioners andothers who may encounter or seek to use theseagreements in practice.In response to requests to further expand theinformation available on cross-border insolvency, inparticular on the use and interpretation of the ModelLaw, in 2011 the Commission adopted a guide forjudges (The UNCITRAL Model Law on Cross-Border<strong>Insolvency</strong>: the judicial perspective). This text examineskey elements of the Model Law in the light of thebody of jurisprudence that has developed in thealmost 15 years since its completion and describeshow the process of recognition of foreign proceedingsworks in practice. To ensure that it remains up to dateand relevant, the text will be periodically revised toreflect new developments in interpretation of theModel Law.Serving as a key source of information on thepolicy settings of the Model Law, the Guide toEnactment of the Model Law is often cited by judgesas a tool for its interpretation. To provide additionalinformation and clarify a number of the concepts usedby the Model Law, the Guide to Enactment iscurrently being revised.Central to the revisions is the concept of “centreof main interests”, which is common to both theModel Law and the EU Regulation on insolvencyproceedings (albeit for slightly different purposes), butnot defined in either text. In the Model Law, centre ofmain interests determines the effects of recognition ofa foreign proceeding in terms of relief granted toassist that proceeding. Under the EU Regulation,centre of main interests determines the proper placefor the commencement of insolvency proceedings andthe law that will be applicable to those proceedings,with the decision on centre of main interests beingmade at the time of the commencement of therelevant proceeding. Under the Model Law, a requestfor recognition of a foreign proceeding may be madeat any time after the commencement of thatproceeding; in some cases it has been made severalyears later. Accordingly, the court considering anapplication for recognition under the Model Law mustdetermine ex-post whether the foreign proceedingfor which recognition is sought is taking place in aforum that is the debtor’s centre of main interests orwas when the proceeding commenced. The twopossibilities indicate the different approaches taken bythe courts, thus raising an issue for furtherconsideration.The interpretation of “centre of main interests” hasbeen the subject of much judicial, academic andprofessional consideration and comment, often withdiffering views being expressed on the direction thejurisprudence seems to be taking. The purpose of5

evising the Guide to Enactment is not to develop adefinition of COMI, but rather to provide moreinformation and direction on how the concept mightbe interpreted.Achieving uniformity of interpretation asencouraged by article 8 of the Model Law seems adesirable goal, at least with respect to the applicationof the Model Law; to the extent possible, it also seemsdesirable as between the Model Law and the EURegulation. To that end, the Working Group hasidentified a number of factors that have been used bycourts in determining whether rebuttal of thepresumption in favour of the debtor’s COMI being thelocation of its registered office has been achieved.Various views have been expressed as to whether thatlist can be reduced to a few key factors, such as thelocation from which the debtor is managed and itsphysical operations conducted and whether areasonable or ordinary third parties can discern orperceive where the debtor is conducting thesefunctions, or whether a range of factors that havebeen found to be relevant in different fact situationsshould be discussed.As a related step, more definition is also beingprovided in respect of the pre-conditions forrecognition under the Model Law, in particular whatconstitutes a “foreign proceeding” for the purposes ofarticle 2 (a). Again, this has been the subject of someconsideration by courts, in some cases involvingrepresentatives from different proceedings seeking tobe recognised as coming from the centre of thedebtor’s main interests.Article 2 (a) includes a number of elements, eachof which has been the subject of interpretation: (i) acollective judicial or administrative proceeding, (ii)pursuant to a law relating to insolvency, (iii) in whichthe assets and affairs of the debtor are subject tocontrol or supervision by a foreign court, and (iv) forthe purpose of reorganisation or liquidation [emphasisadded]. Key issues have included whether a lawproviding for solvent liquidation is a law relating toinsolvency; whether a receivership is a collectiveproceeding or meets the purpose test in (iv); whethercontrol or supervision by an insolvency representativeis sufficient for (iii); whether a proceeding which doesnot deal with certain classes of claim, such as those ofsecured creditors, would be collective; whetherfinancial adjustment agreements or similar contractualarrangements meet the requirements of article 2 (a).These issues will be further considered at theupcoming meeting of the Working Group in New York(April 30-May 4, <strong>2012</strong>).A second topic currently being considered is theobligations of directors of a company in the periodapproaching insolvency. While international work hasproduced results with respect to the obligations thatapply to directors of a solvent company (e.g. theOECD Principles of Corporate Governance) and todirectors when formal insolvency proceedings havecommenced (e.g. UNCITRAL Legislative Guide on<strong>Insolvency</strong> Law), significant divergences of approachremain with respect to the obligations of directors inthe period described as the twilight zone or thevicinity of insolvency.A business facing an actual or imminent inability tomeet its obligations as they fall due needs robustmanagement, as often there are difficult decisions andjudgements to be made and it is essential that earlyaction be taken. Financial decline typically occurs morerapidly than many parties would believe and as thefinancial position of an enterprise worsens, theoptions available for achieving a viable solution alsorapidly diminish. Competent directors shouldunderstand the company’s financial situation andpossess all reasonably available information necessaryto enable them to take appropriate steps to addressthat financial distress and avoid further decline. Inaddition to providing a predictable legal process foraddressing the financial difficulties of troubled debtorsand the necessary framework for the efficientreorganisation or orderly liquidation of those debtors,it has been suggested that effective insolvency laws, ofthe kind promoted by the UNCITRAL LegislativeGuide, should also permit an examination to be madeof the circumstances giving rise to insolvency of anenterprise and in particular the conduct of directorsof that enterprise.This issue has been the subject of debate for sometime, both in the context of developing nationalapproaches and exploring the possibilities of devisinga harmonised rule, principally for regional application.The focus of UNCITRAL’s work in this area is theobligations that could be set out in an insolvency lawfor enforcement retroactively once formal insolvencyproceedings commence. A draft text forconsideration at the next meeting of the WorkingGroup has been prepared. It addresses the partieswho would owe such obligations, when theobligations would arise, the nature of the obligationsand their enforcement, including who may enforcesuch obligations, remedies and potential means offunding enforcement proceedings.Since the adoption of the Model Law in 1997,UNCITRAL has worked to develop an increasinglycomprehensive body of texts on insolvency and crossborderinsolvency law that focuses on providing aneffective enabling legislative framework for theconduct of insolvency proceedings, both domestic andcross-border, and on responding to current issues andneeds through guides and information for use by6

judges, insolvency professionals and other stakeholders.An assessment of whether (and what) more is neededto address the concerns arising from the most recentfinancial crisis may determine the shape of UNCITRAL’sinsolvency activities in the coming years.Notes:1The views expressed in this article are those of theauthor and do not necessarily reflect those of theUnited Nations.2Uniform Commercial Law in the Twenty-first Century:Proceedings of the Congress of the United NationsCommission on International Trade Law, New York,May 18-22, 1992 (United Nations, 1995) at 158(Intervention by Prof. Carl Felsenfeld, FordhamUniversity, New York).3All UNCITRAL insolvency texts are available from4http://www.uncitral.org/uncitral/en/uncitral_texts/insolvency.htmlUNCITRAL Legislative Guide on <strong>Insolvency</strong> Law,part three, chapter III, para. 6.Author:Jenny Clift, Senior Legal OfficerInternational Trade Law Division(UNCITRAL Secretariat)Office of Legal AffairsVienna International CentreWagramerstr. 5A-1220 Vienna, AustriaTel: +43 1 26060 4065Fax: +43 1 26060 58<strong>13</strong>Email: jenny.clift@uncitral.orgWebsite: www.uncitral.org7

The importance of effective and efficientresolution of non-performing loansby Patrick Schaefer and Mahesh Uttamchandani, World Bank GroupAs Philip Wood, noted international financial law scholar and insolvencypractitioner, affirms in his text, The Law and Practice of International Finance,insolvency law plays a fundamental role in credit-based economies as, whenbusinesses become insolvent and loans are unable to be repaid, the cost ofcredit increases (or is withdrawn altogether) and overall economic activitysuffers. 1 Laws and regulations which govern insolvency play a central role inpromoting a healthy and dynamic climate for business by assuringthat credit and assets are efficiently allocated and reallocated. While abusiness may generally consider the particulars of the insolvency frameworkonly upon the arrival of financial distress, the laws and their degree ofefficiency establish the ex ante conditions for a properly functioning creditand business environment. Such considerations are of fundamentalimportance for maturing credit-based and market economies in developingcountries; strengthening insolvency frameworks can help to facilitateinvestment therein.The fundamental importance of these frameworks hasgained particular relevance in the wake of the globalfinancial crisis which has resulted in higher rates ofnon-performing loans (NPLs) and a consequent risein the rates of corporate insolvencies in many partsof the world, with particular escalation evident inEastern Europe. 2 However, the current legislative andregulatory response among countries varies widelyand often only serves to exacerbate the resolution ofNPLs. In order to deal more effectively with theseburdens, countries must strive to create ever moreefficient debt resolution frameworks. The challenge isfor countries to find ways to improve NPL resolutionthrough legislative and regulatory reform.The World Bank Group’s Investment AdvisoryServices has a specific Debt Resolution and BusinessExit Team to assist countries in improving theirinsolvency frameworks.Non-performing loans and theireconomic impactThe reach of the financial crisis has been extensiveand, in most of the world’s regions, particularly inCentral and Eastern Europe, it has generally resultedin a significant rise in NPL rates (Figure 1). Indeed,increasing NPL rates and the consequentdeterioration in the quality of banks’ loan portfolioshave been at the center of costly banking systemdistress and economic crises in both developing andadvanced economies. 3 A study of the Central andEastern European countries, for example, found thatthe economic slowdown has led to a deterioration ofNPL ratios. 4 In times of such distress and slowdown,with the concomitant rise in NPLs, financial institutionsface recapitalisation needs as their balance sheetsdeteriorate. Banks are less willing to extend newcredit or roll over debt, which, in turn, weighs onFigure 1: Increase in non-performing loan ratesRegion 2007 2008 2009 2010 2011Africa 3.36 3.34 5.73 6.82 5.33Middle East 2.26 2.73 3.70 4.82 4.62Far East and Central Asia 3.56 2.90 2.79 2.68 2.72Eastern Europe 3.54 3.84 8.04 8.29 8.23Western Europe 2.08 2.60 4.40 5.<strong>13</strong> 4.38North America .76 1.49 3.43 3.18 2.87Central and South America 4.08 4.<strong>13</strong> 5.08 3.83 3.57OECD high income 2.01 2.40 3.77 4.00 3.20Source: Bankscope; NPL Rates amongst the top 500 active lending institutions by average value of assets in the respective region.8

Figure 2: <strong>Insolvency</strong> indicators across regionsRegion Time (in years) Cost (as % of the estate) Recovery rateSub-Saharan Africa 3.4 23 19.1Middle East & North Africa 3.4 14 29.7East Asia & Pacific 2.9 23 29.5Eastern Europe & Central Asia 2.7 <strong>13</strong> 35.8Latin America & Caribbean 3.3 16 30.7South Asia 3.4 9 29.0OECD high income 1.7 9 68.2Source: Doing Business Report, <strong>2012</strong>.economic growth. 5 When economic growth declinessignificantly after structural shocks that also drive upNPL rates, bank credit contracts further. 6In addition to highlighting the effect of high NPLrates on overall economic health, the recent financialcrisis has also underlined the need for effectiveinsolvency frameworks in order to resolve NPLs asquickly, effectively, and efficiently as possible. 7Nevertheless, the insolvency frameworks of manycountries are often ill prepared to resolve NPLs in anoptimal manner. Several key indicators bear this out,showing low rates of recovery, a high cost of resolvinginsolvency and protracted time periods before anyeventual resolution (Figure 2). 8In many ways, these indicators are a reflection of ageneral reliance among jurisdictions on court-basedproceedings to resolve insolvency, rather than availingof more efficient and cost effective out-of-court debtresolution methods. In many economies, enforcementtools are rigid with insolvency frameworks outdated. In101 of 168 economies, for example, foreclosure andliquidation are the proceedings most commonly used,usually with no provision for a restructuring of acompany’s debt in a way that allows the business tocontinue operating – even for a business that ispotentially viable. 9Ultimately, an effective insolvency regime shouldenable a distressed business and its creditors to reachan optimal outcome that preserves firm value andmaximises stakeholder returns. Available IMF andWorld Bank data suggest, however, that hundreds ofbillions of dollars in business value are “destroyed” inemerging markets due to a lack of legal mechanismsthat adequately resolve these cases of insolvency. 10This negatively impacts entrepreneurship, access tocredit, bank loan recovery and jobs. The challenge is toreform legislative and regulatory frameworks such thatNPLs are more easily resolved, thereby reducing theirpressure on balance sheets, increasing the availabilityof affordable credit and ameliorating their negativeeffects on the overall economy.These claims are borne out by economic analyses.Evidence shows that reforms, particularly those thatencourage and support speedier debt repayment andout-of-court restructurings, lead both to higherreturns to creditors and to cheaper and moreaccessible credit. In 1999, reform of debtreorganisation in Colombia streamlined the procedureby tightening statutory deadlines and reduced theability of debtors to protract the appeal process. 11These reforms had the effect of improving theposition of viable firms and shortened the overallduration of reorganisation from 34 to 12 months. 12Another study, looking at the effects of Thailand’s 1998bankruptcy reform, which included the introduction ofa framework for debt rehabilitation, demonstrated adecline in the level of NPLs and in the cost ofresolving the insolvency. <strong>13</strong>Studies have also shown that reforms which focuson reducing the time required to resolve debt recoveryclaims reduce the cost of credit as well as increase theaggregate supply of credit in an economy. Out of courtdebt recovery tribunals in India, for example, have notonly increased the speed of repayments, but have alsoyielded to creditors a greater claim to an increasedvalue on collateral, and led to lower interest rates onlarger loans. 14 The Brazilian bankruptcy reform of 2005which established increased creditor protection, forexample, was found to have resulted in a 22%reduction in the cost of credit and a 39% increase inthe aggregate level of credit. 15Other studies document an alternative economiceffect that an effective insolvency law regime can haveon entrepreneurial activity and MSME growth. Theextent to which insolvency regimes are ‘forgiving’appears to have a significant effect on entrepreneurshipand levels of self employment across countries. Researchshows that reforms that make bankruptcy regimes more‘forgiving’ typically lead to an increase the supply ofentrepreneurs. 16 In contrast, the absence of a debtdischarge mechanism in the event of insolvency inhibitsthe entrepreneur from re-entering the marketplace, as ‘a9

oad fresh start policy encourages individuals to takerisks in starting a new business venture’. 17 This isreflected in legislative movements in certain countries torelax their insolvency regimes. 18The work of the World BankGroup’s Debt Resolution andBusiness Exit TeamThe World Bank Group (WBG) has a strong trackrecord of promoting and helping to implementinsolvency reforms in a wide range of jurisdictions. Oneof the principal ways in which the World Bank Grouptargets its assistance more precisely in the reform ofinsolvency frameworks is through its Debt Resolutionand Business Exit Team, which forms part of theInvestment Climate Advisory Services Department inthe World Bank Group. The overall goal of the Team, inline with the benefits demonstrated in the reformstudies cited above, is to improve the creditenvironment by creating more efficient regimes forbanks and businesses to recover debts. By working toreduce dependency on the courts for debt resolution,these efforts help failed businesses to “exit” the marketefficiently and return assets to creditors as soon aspossible, thereby increasing returns to banks andlowering rates of NPLs. This work also enables viablebut financially distressed businesses to restructure andavoid the value-destructive effects of insolvency thatthey otherwise would have endured.To this end, the Debt Resolution and Business ExitTeam delivers both technical assistance and expertiseto client governments via regional teams located inboth the IFC and World Bank. Such technicalassistance includes legislative review and reform, adviceon improving institutional frameworks and capacitybuilding and training of relevant stakeholders. In recentyears, several of the Team’s projects have sought tofoster out of court debt resolution with the aim ofreducing NPL rates in countries such as Bangladesh,Montenegro, Romania, and Lebanon.The Debt Resolution and Business Exit Team alsohelps to produce publications as well as organise andfacilitate regional conferences for knowledge sharing,staff training, and the promotion of further dialoguebetween public and private sector stakeholders. 19In 2011, the Team led such a conference in Tunis,Tunisia. The event centred on insolvency frameworksin the Middle-East and North Africa Region as well asfrom Sub-Saharan Africa and was attended by staffand clients from the region. Judges, public officials andexperts were able to share not only their experiencesand questions about how recent reformsimplemented amongst neighbouring countries actuallyfunctioned, but also their particular successes andchallenges as well.Another more recent conference in Vienna,Austria, organised with the collaboration of theAustrian Government, the IFC’s Investment Climate<strong>Global</strong> Practice, and the World Bank Financial SectorReform Advisory Centre, brought together publicofficials, international experts and financial sectorrepresentatives over the course of two days to discussand transfer knowledge with respect to strengtheningdebt resolution systems in the Eastern European andCentral Asian region. Because of the depth of theeffects of the financial crisis in this region, theconference addressed a range of issues relevant todebt resolution in the region, such as out of courtworkouts, tax barriers, asset management companies,secured transactions and consumer protection, whichencouraged a wide ranging dialogue from whichparticipants could implement solutions to the currentobstacles that hinder debt resolution.The Debt Resolution and Business Exit Team alsocoordinates internally with regional IFC and WorldBank teams through the Distressed Asset Resolutionand <strong>Insolvency</strong> Thematic Group (DARIT) whose mainobjective is to create opportunities to increase theimpact of IBRD, IFC and IMF interventions in the areaof distressed asset resolution and insolvency reform. Itoffers an ongoing forum for its members to provideupdates on ongoing activities, to facilitate knowledgeand information sharing, to share lessons learned andto help identify opportunities for collaboration.Even so, the combined efforts of the World BankGroup and the IFC’s Debt Resolution and BusinessExit Team in reforming insolvency legislation andpractices still face a variety of challenges, as the datafrom Figures 1 and 2 demonstrate. The need forfurther intervention, whether through direct technicalassistance or through fostering the sharing ofknowledge and experiences amongst stakeholders, tocreate more efficient insolvency frameworks andhealthier economies is patently clear. While workingacross regions and jurisdictions to resolve theseimportant issues remains challenging, the DebtResolution and Business Exit Team is in a strongposition to structure its interventions to account forthe unique political structures, legal cultures andeconomic and social frameworks of each country.Notes:1Wood, Philip J., Law and Practice of InternationalFinance, Sweet & Maxwell, p. 45, para. 4-01.2Groendahl, Boris, East Europe Insolvencies Increaseon Credit Crunch: Creditreform, February 08, <strong>2012</strong>,http://www.businessweek.com/news/<strong>2012</strong>-02-08/east-europe-insolvencies-increase-on-creditcrunch-creditreform.html3Nkusu, Mwanza, Nonperforming Loans and10

Macrofinancial Vulnerabilities in AdvancedEconomies, WP/11/161, IMF Working Paper Strategy,Policy, and <strong>Review</strong> Department.4Festic, Mejra and Alenka Kavkler, Sebastijan Repina,Journal of Banking & Finance Volume 35, Issue 2,February 2011, Pages 310–322.5De Bock, Reinout and Alexander DemyanetsMonetary and Capital Markets Bank Asset Quality inEmerging Markets: Determinants and Spillovers,WP/12/71 IMF Working Paper 1 March <strong>2012</strong>6De Bock, Reinout and Alexander Demyanets,Monetary and Capital Markets Bank Asset Quality inEmerging Markets: Determinants and Spillovers,WP/12/71 IMF Working Paper 1 March <strong>2012</strong>p. 57Viewpoint, Klapper, Leora, p. 28Doing Business, <strong>2012</strong>, available athttp://www.doingbusiness.org/data/exploretopics/resolving-insolvency.9Doing Business, <strong>2012</strong>, available athttp://www.doingbusiness.org/data/exploretopics/resolving-insolvency.10IMF, International Financial Statistics and <strong>Global</strong> NPLDatabase and World Bank Group, Doing Business,<strong>2012</strong>, available at http://www.doingbusiness.org/data/exploretopics/resolving-insolvency.11Giné, Xavier and Inessa Love, “Do reorganizationCosts Matter for Efficiency? Evidence for aBankruptcy Reform in Colombia.” Policy ResearchWorking Paper 3970, World Bank, Washington, D.C.2008.12Giné, Xavier and Inessa Love, “Do reorganizationCosts Matter for Efficiency? Evidence for aBankruptcy Reform in Colombia.” Policy ResearchWorking Paper 3970, World Bank, Washington, D.C.2008.<strong>13</strong>Foley, Firtz, Going Bust in Bangkok: Lessons from theBankruptcy Law Reform in Thailand, HarvardBusiness School. Cambridge 2009, available athttp://www.people.hbs.edu/ffoley/ThaiBankruptcy.pdf14Visaria, Surata, “Legal Reform and Loan Repayment:The Micoreconomic Impact of Debt RecoveryTribunals in India.” American Economic Journal:Applied Economics 1 (3): 59-81. 2009.15Funchal, Bruno, “The Effects of the 2005 BankruptcyReform in Brazil.” Economics Letters 101 (1): 84-86.16Armour, John and Douglas Cumming, “BankruptcyLaw and Entrepreneurship.” Law Working PaperN°.105/2008.17Hallinan, Charles “The ‘Fresh Start’ Policy inConsumer Bankruptcy: A Historical Inventory and anInterpretive Theory.” 21 U. RICH. L. REV. 49, 64.18Uttamchandani, Mahesh and Antonia Menezes, “TheFreedom to Fail: Why Small Business <strong>Insolvency</strong>Regimes are Critical for Emerging Markets.”International Corporate Rescue 7(4).19See, e.g., Uttamchandani, Mahesh, Leora Klapper, andElena Cirmizi, The Challenges of Bankruptcy Reform,World Bank, October 2010, Number 5448, availableat http://elibrary.worldbank.org/content/workingpaper/10.1596/18<strong>13</strong>-9450-5448, andUttamchandani, Mahesh, and Antonia Menezes, TheFreedom to Fail: Why Small Business <strong>Insolvency</strong>Regimes are Critical for Emerging Markets,International Corporate Rescue, Vol. 7, no. 4, 2010.The authors wish to gratefully acknowledge the invaluableassistance of Ian Dalton in the preparation of this article.Authors:Patrick Charles Schaefer, Private SectorDevelopment SpecialistDebt Resolution & Business ExitInvestment ClimateTel: +1 202 458 7533Fax: +1 202 522 3262Email: PSchaefer@ifc.orgMahesh Uttamchandani, <strong>Global</strong> Product LeaderDebt Resolution & Business ExitInvestment ClimateTel: +1 202 458 5827Fax: +1 202 522 3262Email: muttamchandani@worldbank.orgWorld Bank Group2121 Pennsylvania Avenue NWWashington DC 20433USWebsite: www.wbginvestmentclimate.org11

Generating value creation fromdistressed debt assetsby Brett Wyard and Raymond Whiteman, Carlyle Strategic Partners (CSP)The specialism of distressed-debt investing is likely to provide increasingopportunities in the years ahead. Brett Wyard and Raymond Whiteman ofCarlyle Strategic Partners (“CSP”), the division within The Carlyle Groupthat focuses on making alpha-driven debt and equity investments incompanies that are experiencing financial duress, outline the fundamentals,the principles, and some examples of the value this asset class can generate.A funding gapThe great liquidity drought of 2007-08 exposed longtermweaknesses within many well-known companies.Even well-managed businesses with good managementteams found themselves in situations that feltunimaginable just a few months prior to the crisis. Yetthe level of bankruptcies and restructurings actually fellbelow that of the worst predictions in mostindustrialised countries, meaning that the distresseddebt sector – despite tremendous market dislocation –sourced fewer than expected restructuring and debtfor equity opportunities than many had been expecting.The recent injection of US$1.3 trillion by the EuropeanCentral Bank into the financial system has prevented, orperhaps postponed, another market dislocation but hasnot changed the end game.Europe’s nascent recovery is being threatened by adeepening and potentially-intractable sovereign debtcrisis. This means that the economic challenges, withinboth consumer and industrial sectors, are far fromover. Indeed, a potentially-painful second phase is nowunderway, one that may provide distressed debtinvestors with far more “alpha” oriented restructuringand turnaround opportunities than those “beta”oriented debt trading opportunities of 2007-09.Of course, many businesses have taken steps tostrengthen their balance sheets – not least becausethey remain acutely aware of the restricted liquidityavailable from their traditional sources of funding,including their house banks. Nonetheless, corporateleverage remains a deep concern – not least due to awall of approaching debt maturities due between nowand 2015 with a major funding gap upon us.This is a serious position, which more agilecompanies have addressed by refinancing their debtahead of schedule – taking advantage of ‘windows ofopportunity’ during lulls in volatility. However, this hasbeen more challenging for SMEs to achieve and manyhave yet to act.Unlike larger borrowers that have broader sourcesof funding through the public and institutional capitalmarkets – SMEs have remained largely dependent onthe private debt markets. Yet banks are withdrawinglending capacity at an unprecedented rate –responding to regulatory pressures such as increasedcapital requirements under Basel III, political pressuresthat require bailed-out banks to focus on their homemarket, or simply the post-crisis desire to strengthentheir loan books. Additionally, Collateralised LoanObligations (CLOs) – a major pre-crisis source ofliquidity and buyer of syndicated bank loans – are allcoming out of their investment periods and newissuance is a fraction of pre-2008 levels.Distressed debt opportunitiesAll of the above suggests a growth in opportunities forUS and Europe’s distressed debt investors – anassertion that may draw some scepticism from marketwatchers who noticed that the boom in distresseddebt investments of 2007-09 failed to produce anextended period of high defaults. Certainly, what couldnow be viewed as Phase I of the crisis (2007-09)created tremendous market dislocation without thecorresponding levels of defaults and restructuringsmany had anticipated – including debt for equity swapsor control opportunities around failed LBOs.Yet Phase II, which is already underway, will likelychange that. Due to the formidable combination ofrenewed recession, heightened regulation and theonus on banks to write down assets, it seems cleardistressed opportunities will grow.Factors supporting this growth include:• a debt maturity wall on both sides of the Atlantic –much of which may possibly fail to be refinanced;• lower-rated new issuance has reached an all-timehigh (back to 2007 levels as a percentage of newissuance) – usually a two to three-year precursorto a period of higher defaults;• ratings declines, which will lead to higher levels offorced selling by financial institutions;• sluggish (or negative) economic growth, which willharm corporate profitability and force over-12

indebted or insolvent businesses to restructure; and• the inability of PIK toggle loans, “covenant lite” andongoing credit amendment (or “amend topretend”) activity to do more than merely delaythe inevitable.An attractive private equity assetclassCertainly, distressed investing is an expanding asset classfor private equity investors, especially with respect tocompanies in the middle market space which have lessaccess to refinancing capacity than their largercounterparts.From a regional perspective given Europe’seconomic pressures are more severe and its bankingsector is weaker than the US, it is certainly a regionfor growth in distressed debt activity. North America,however, will also continue to offer significantopportunities. Also, while past activity has centred onspecific sectors, the poor economic growth prospects,in particular in Europe, for <strong>2012</strong> and beyond shouldproduce a more diverse spectrum of opportunities.While the basic remit of private equity is to galvanisethe performance of underperforming businesses,distressed specialists can focus on more material rescuemissions. Their aim in many cases is to restructure andturn around troubled businesses that can be madefundamentally sound, with a focus on restoring value andproviding these companies with a future.This can be far different from the asset stripping or“vulture” portrayal that is usually attributed to thisspecialised type of investment.Careful selectionThe policy of seeking opportunities in industries onlywhere investors can both find and add value rules outcertain sectors subject to secular change, or where thebusiness model is obsolete. For example the printindustry has often presented too many challenges, asturnaround potential is also dependent on theprogressive direction of the market. Indeed, initialconsiderations for a distressed investment opportunitymust be pragmatic – focused as much on thepreservation of investment capital at risk as on thepotential profit.Distressed investors need to seek out companiesthat, while financially distressed, remain operationallysound. So operational control – or at least an exertionof influence to secure this outcome – often needs tobe a cornerstone policy for investment.CSP investmentsStellex Aerostructures – a specialist producer oftitanium and aluminium aerostructure components –and Diversified Machine, an auto parts supplier thatCarlyle formed in 2005 from the assets of bankruptpredecessor UniBoring – gaining majority control inboth cases, CSP rapidly achieved strong results fromboth companies, as well as from smaller minority-stakeinvestments.CSP also invested in Texas group Permian Tank &Manufacturing, a manufacturer of steel and fibreglassstorage tanks. In 2009, CSP added Florida’s largestbank, BankUnited, as well as another automotivecompany, components manufacturer Metaldyne.European acquisitionIn September 2011, CSP made its first controlacquisition in Europe – a UK manufacturer calledBrintons Carpets; a family-owned business since 1783,the company has a strong reputation as the producerof premium Axminster. The White House, 10 DowningStreet and venues such as the newly-restoredRenaissance Hotel at London’s St Pancras station haveBrintons carpets. In late 2010, the new Delhi airportterminal provided the company with the world’s biggestsingle order of woven carpet (size of 24 football fields).Brintons is likely to be one of a stream of non-USinvestments for CSP.CSP does not regard its North American andEuropean operations as separate silos – demonstratedby one recent investment in a US company that waspurchased from a European financial institution, buyingstrong US fundamentals on European technicals.The review processCSP follows a rigorous investment process, which beginswith a detailed risk assessment – of both the companyand its operating environment. In Northern Europe, CSPseeks opportunities primarily in countries which haverestructuring creditor schemes of arrangement (mostsimilar to US bankruptcy and other creditor-friendlyenvironments). This means the UK, Ireland, Germany andthe Netherlands meet their criteria.That does not preclude investments where theinsolvency regimes are less investor-friendly: such as inFrance, which has laws aimed at protecting employeesand existing equity holders that can makerestructuring more challenging. It does however meanthat in these countries there are additional hurdles tojump – ones perhaps requiring a greater risk premiumto make the deal attractive. In Greece, which lacksboth restructuring precedents and suffers limitedtransparency – as well as in Portugal, Spain and Italy –the required risk premium may be even larger. CSPalso looks to bypass restructuring risks in how theymay structure their investments in these jurisdictions.To give CSP greater leeway for reviving acompany’s fortunes, CSP aims to acquire a distressedcompany at a significant discount. To reflect the higher<strong>13</strong>

costs prevailing in some countries, CSP would look fora greater discount to the enterprise value. Thejudgement made by CSP is one purely predicated ona calculation regarding its expectations of risk,opportunity and return.Other investment criteriaA crucial decision for CSP is deciding which types ofcompany can best provide us with the fundamentaldrivers of value. Thus far, our investment focus hasbeen on industries where The Carlyle Group has deepindustry experience through its +250 portfoliocompanies in the aerospace, automotive, consumer,defence, energy, healthcare, industrial, media, power,retail, technology, telecommunications andtransportation sectors. And while several of CSPpeers are often termed mega name investors, ourguiding strategy is based on smaller averageinvestment sizes – for example US$100m in the caseof Metaldyne and US$55m for Brintons.Another major consideration is exit strategy, whichCSP considers before any acquisition or investment ismade. While a private equity buy-out typically involvesa commitment of four to 10 years, distressed investinggenerally tends to be for shorter periods. Two to fouryears is more usual; although this strategy may needreassessing should a prolonged period of globaleconomic austerity lie ahead. Certainly, someassurance is vital from the outset that the companycan be sold-on once restored to financial health.Hands-on approachCSP’s approach to the companies where it does havecontrol is very-much “hands-on”. In certain cases thisinvolves selecting new management teams, appointingnew boards of directors or members of our teamserving as directors of reorganised companies atvarying degrees of equity ownership. That said, CSPbrings no prejudices to any of its investments. CSP’saim is not to replace existing management but tounderstand where the company is weak and thenseek to strengthen it. This can, just as often, result insupport of the existing management team, though oneperhaps needing additional operational andmanagement support.Distressed investing is by nature a handicappinggame; essentially one in which to secure control thecompany’s debt is typically bought ahead of ananticipated default. However, on occasions thecompany may avoid such an outcome – in whichcase we trade out of the debt at a par plus accruedor near par plus accrued basis. That said, thehandicapping game is one where CSP has consistentlydemonstrated success, as illustrated in the casestudies below.Brintons: a UK case studyBrintons Carpets came onto CSP’s radar in May 2011.CSP acquired it in the following September: a fourmonthprocess that is typical for distressed investing.Thanks to its premium products, the company thrivedduring the pre-credit crunch era and had made asubstantial capacity-increasing investment in China. Butthe financial downturn had led to a negative impacton its core customer base of hotels, while also dentingdemand from the leisure and housing sectors.CSP was invited to join a distressed sale processinitiated by the board of directors. CSP bought from aUK commercial bank its bilateral debt facility intoBrintons at a discount-to-face value. And to maintainthe company’s operations, CSP provided a significantcapital injection. Shortly afterwards, CSP bought themajority of Brintons’ assets through a “pre-pack”administration process, giving it control of the business.CSP’s action planMedia reports of the Brintons deal were generallynegative, focusing on resulting job losses and thetransfer of the company’s pension fund liabilities tothe Pension Protection Fund. Less attention was givento the fact CSP injected new money into the businessand promptly devised a plan to improve profitability,which would enable Brintons to compete moreeffectively for major commercial contracts in the Asia-Pacific region and the US.CSP always looks for growth potential in itsacquisitions. In the case of Brintons, this potential liesin full utilisation and the future-potential of thecompany’s innovative high-definition carpet weavetechnology. Brintons has developed the world’s mostefficient looms, enabling shorter runs and the deliveryof more complex designs. While a luxury carpettypically incorporates between eight to ten colours,this new technology makes the production of 24-colour carpets feasible with significantly improvedchange-over times: a process we consider a potential“game-changer” in luxury carpet manufacturing.CSP’s most immediate priority is to reduce thecompany’s overheads by updating its operations. CSP’shands-on approach mentioned earlier – which initiallycame as a surprise to Brintons’ management – meansthe investment team regularly visits the Kidderminsterhead office and has become deeply involved in everypart of the company’s sales, supply chain managementand operations. Certainly, the changes being initiatedshould bring more favourable, if less dramatic,headlines, as the benefits emerge.Success storiesBrintons is just one story from a successful portfolio ofinvestments since CSP’s inception. For example, success14

in reviving Diversified Machine’s fortunes was recognisedat the end of 2011, when Carlyle won the inauguralTeddy Forstmann Memorial Private Equity Value-CreationAward (awarded by the New York Times).Diversified Machine’s turnaround story deservesmerit. CSP created jobs at Diversified – increasing theworkforce from around 525 employees to more than2,200. Diversified has also completed several strategicacquisitions to boost its growth and financial prospects.CSP’s first major investment, in StellexAerostructures, lasted just two years. Stellex was soldat a premium to GKN in September 2006 and thisachievement was recognised when Carlyle receivedthe Turnaround Buyout of the Year award from BuyoutsMagazine and the Middle Market Turnaround of the Yearfrom The Turnaround Management Association.There is no alchemy and no one factor that canpredict success. Some assume CSP looks for stronglyunderlying businesses with weak management orleadership who has over-leveraged the company.This may be one route to successful acquisition. Butthere are also many companies that have strongmanagement teams who CSP is keen to partner withduring its ownership. For instance, CSP’s 2009acquisition of Metaldyne was an investment in whatCSP believed to be a well-managed business – with anexcellent management team – that was, nonetheless,suffering short-term problems arising from the motormanufacturing industry downturn and also a need torestructure its balance sheet. Revenue and earningssignificantly recovered in 2010 and again in 2011.Strategic cooperationLooking ahead, CSP’s investment strategy will continue tobe based on investing in businesses which it believes cansteer or be steered through temporary challenges and,once strengthened, can stand the test of the economiccycle and changing consumer and industrial needs.Such a policy occasionally results in partnering withcompetitors that also may buy a portion of the targetdistressed company’s debt. Such partnership mayoccur intentionally or by default, and CSP is certainlyan advocate of the partnership model. In most casesmotivations are aligned, and strategic expertise can becomplementary – making the opportunity to poolresources to achieve greater value for investors awelcome one. In many cases, distressed investing canbe a collegiate business with plenty of opportunities,so in many cases it makes good business sense tocooperate.CSP can also partner with other groups withinCarlyle as and when appropriate. Indeed, our parent’sglobal reach and diverse industry resources is ofparticular value when seeking to maximise theopportunities that we now see opening up in Europeand elsewhere.Authors:Brett Wyard, Managing Director and Co-HeadRaymond Whiteman, Managing Director and Co-HeadCarlyle Strategic PartnersThe Carlyle Group1001 Pennsylvania Avenue, NWWashington, DC 20004-2505USTel: +1 202 347 2626Fax: +1 202 347 1818Email: brett.wyard@carlyle.comraymond.whiteman@carlyle.comWebsite: www.carlyle.com15

IBA Section on <strong>Insolvency</strong>, <strong>Restructuring</strong>and Creditors’ Rights (SIRC)by Judith Elkin, Haynes and Boone, LLP and Co-Chair IBA-SIRC, andDavid Jenny, VISCHER Ltd and Co-Chair IBA-SIRCThe global financial crisis has demonstrated that legal systems must developthe necessary tools to weather uncertain times. <strong>Insolvency</strong> laws are amongthe most important of these tools. Recent events show that insolvency lawsmust be able to address financial difficulties of both the private and publicsector. Nations, local governments and financial institutions are no longerexempt from large-scale financial distress. Additionally, as nations, continentsand their economies become more intertwined, insolvency laws must be ableto adapt to the complications of cross-border transactions and businessentities. SIRC continues in <strong>2012</strong> to analyse and discuss these issues at itsconferences and in its publications. Additionally, by participating actively inUNCITRAL and World Bank working groups, SIRC continues to shape policyand legislative solutions to insolvency and restructuring issues globally.SIRC provides a forum for the examination andimprovement of laws and systems to manage financialdistress and cope with the insolvency andrestructuring of troubled enterprises in a globaleconomy. Through our members, who are high profileinsolvency practitioners in their own jurisdictions, wemonitor, gather and report on internationaldevelopments in cross-border insolvency matters.SIRC serves in a NGO capacity at world bodies, suchas UNCITRAL and the World Bank, organisationstasked with policy-making initiatives in the insolvencyand restructuring area, and provides input intodomestic insolvency law reform initiatives around theglobe. Through our relationships with the judiciary,SIRC provides a bridge between insolvencypractitioners and judges in common and civil lawsystems, fostering not just understanding butcooperation where appropriate.SIRC’s Subcommittees are instrumental in achievingits objectives. The current SIRC Subcommittees andtheir co-chairs are:• Enforcement of Creditors’ Rights (Chris Donoho ofHoganLovells and Anja Droege of BMH Avocats);• Reorganisation and Workouts (Justin Fogarty ofHeenan Blaikie and Michelle Barclay of JorgeAvendano Forsyth & Arbe Abogados);• <strong>Insolvency</strong> Legislation and Legislative Reform andHarmonisation (Robert Van Galen of NautaDutilhand Gregor Baer from San Francisco);• Reorganisation of Regulated Industries (JohnSandrelli of Fraser Milner Casgrain and NunoLibano Monteiro of P L M J Law Firm).Upcoming conferencesDuring <strong>2012</strong>, SIRC will organise or participate inconferences taking place in Helsinki, Sao Paolo, Dublinand Warsaw:18th Annual <strong>Global</strong> and <strong>Restructuring</strong>Conference, Helsinki, Finland, May 20-22, <strong>2012</strong>The theme of SIRC’s <strong>2012</strong> annual conference is “Sinkor Swim: Can We Survive Floating in a Sea of Red Ink.”While it will be difficult to surpass the substance andglamour of our 2011 spring conference in Paris, weare going to try. Our programme will explore severalareas that have generated significant global newspapercoverage recently, as well as areas that have been thesubject of a number of controversial recent judicialrulings. Intellectual property rights are governed by ahost of laws outside the bankruptcy and insolvencyarena, but are often a very valuable asset of insolventcompanies. The sale of intellectual property in themassive cross-border Nortel cases generated billionsof dollars. When a patent owner goes into aninsolvency proceeding, the rights of licensees whoseown economic viability may depend on those licensedrights, can be seriously impacted. Our first panel willexplore these rights and recent conflicting courtdecisions in various jurisdictions. A second timelypanel will explore the recent legislation in Europe andthe US governing the solvency of financial institutionsand how the insolvency of a financial institution ishandled. A third programme will deal with therecent spate of insolvencies in the global shippingindustry. And finally, with Lehman, MF <strong>Global</strong> andMadoff still garnering press coverage, our lastpanel will explore how assets are traced andrecovered, including sometimes from the creditorsthemselves, in proceedings involving global companieswhich have become insolvent through market changesand/or fraud.16

South American Regional Conference onDistressed M&A and <strong>Restructuring</strong>, Sao Paolo,Brazil, August <strong>2012</strong>In 2011, SIRC sponsored its inaugural regionalconference on distressed M&A and restructuring inBuenos Aires, Argentina. The conference was a jointeffort between SIRC and the Latin American RegionalForum. The programme, which dealt with cross-borderrestructurings, both formal and informal, distressedM&A strategies, the insolvency of regulated industriesand the recognition of foreign proceedings, all with aparticular focus on Latin America, was extremelysuccessful. Thus, plans are underway to present asimilarly Latin America-focused programme in August<strong>2012</strong> in Sao Paolo.SIRC programmes at IBA Annual Conference,Dublin, Ireland, September 30 – October 5, <strong>2012</strong>Planning is well underway for SIRC’s programmes at theIBA Annual Meeting in Dublin. Our committee chairsand their counterparts in the Employment andIndustrial Relations Law Committee and in the LitigationSection are in the process of developing strong andinteresting programmes focusing on internationalinsolvency issues of global significance. Theseprogrammes will not only be timely, but cutting edge interms of structure and format.The Enforcement of Creditors’ Rights Subcommitteeis developing a programme entitled “When the MusicStops” discussing new developments in the liability ofdirectors and officers in and after insolvencyproceedings. There are significant differences in liability invarious jurisdictions, and the confluence of theseconflicting laws and conflicting duties are heightened incases involving multi-national corporate groups involvedin cross-border insolvency proceedings.The Reorganisation and Workouts Subcommittee isworking with the Employment and Industrial RelationsLaw Committee on a fascinating and politically sensitivetopic entitled “Blood, Sweat and Tears – Money vs SweatEquity.” The rights of current and former employees areof global economic and political importance. Theprogramme will discuss the competing rights ofcreditors and pension holder of insolvent entities, aswell as the situation where the pension obligationsthemselves may be the cause of the company’sfinancial distress.The <strong>Insolvency</strong> Legislation and Legislative Reformand Harmonisation Subcommittee are working on aprogramme on the restructuring of corporate groupsentitled “Bridge Over Troubled Waters.” Through the useof a hypothetical multi-national corporate groupinsolvency, the programme will examine the success todate of UNCITRAL’s ground-breaking enterprisegroup legislative guide annex, and provide guidance forgreater future cooperation through legal instruments,rules and standards around which consensus might beforged for the benefit of the insolvent entities, theiremployees and their creditors.Lastly, the Reorganisation of Regulated IndustriesSubcommittee, following up on its successful panel inDubai on sovereign debt defaults and insolvencies, willbe presenting a programme entitled “Can you Forecloseon a Country?” The panel will present a practical guideto the restructuring of sovereign entities and howcreditors, such as public bondholders, can best protecttheir interests. In light of recent events in Europe andthe US over potential sovereign debt defaults, politicalcompromises, and the use of US Chapter 9, thisprogramme should not be missed.Central Eastern European Regional Conferenceon Opportunities and Challenges that GrowingBusinesses Face in Selected EU Member States –Perspectives for the Future, Warsaw, Poland,November 21-23, <strong>2012</strong>SIRC is pleased to be participating in a conference inWarsaw, Poland sponsored by the European RegionalForum, on the challenges and rewards of doingbusiness in Central and Eastern Europe. Accession tothe EU has played an important role in shaping thelegal and business environments in new EU memberstates, offering both opportunities and requiringchanges to operations of growing businesses in thesecountries. The programme, which will include one dayof specialised workshops on various topics thatattendees can choose to attend, as well as two days ofseminar-style presentations, will explore what challengesand opportunities will prevail in the future with regardto growing business operations in the new EU memberstates. Programmes will discuss whether there is a riskof facing a so-called “post accession drift,” as opposedto the continuation of the vigorous and positiveactivities that took place during the period just afteraccession. The conference will provide an opportunityto discuss the experiences and projections of some ofthe new EU member states. SIRC will be presentingprogramming on insolvency issues in Central andEastern European jurisdictions. Other topics to bepresented include tax, antitrust, employment law,corporate governance and M&A.Other interesting projectsAside from programmes, SIRC is also working on otherinteresting projects.SIRC's <strong>2012</strong> Annual Scholarship CompetitionThe IBA Scholarship Programme allows each Sectionwithin the IBA Legal Practices Division to award ascholarship to allow a young lawyer to attend theAnnual Conference. SIRC will be able to fund onescholar to attend the IBA Annual Conference in Dublin.The Scholarship will cover a contribution towards travel17

and accommodation expenses, a waived registrationfee, two years free membership in the IBA, LPD, PPIDand one Committee from the awarding Section, as wellas the waiver of a registration fee to either the nextIBA Annual Conference or one of the Section’sconferences to be held the following year.SIRC’s <strong>2012</strong> scholarship topic deals with finding theright balance between the rights of creditors andpension holders of insolvent entities. Each submittershould describe the balance struck in his or herjurisdiction between these competing interests andanalyse critically (i) whether the interests of (future)pension holders are overprotected so that nonprivilegedcreditors of insolvent entities are nottreated fairly; (ii) whether pension holders’ interestsare not sufficiently protected and are junior to therights of creditors; or (iii) whether the law and policyof his or her jurisdiction is a sound compromise.Submissions are due by Monday April 9, <strong>2012</strong>.IBA guide on cash poolingSIRC, through the Herculean efforts of editor MarcelWillems (Kennedy Van der Laan), is well into theprocess of finalising its practical guide on cash pooling inmany significant global jurisdictions. Pooling cash within acorporate group or among a number of relatedcompanies is commonplace and enables the best use ofthe funds available at as low a cost as possible, thusstrengthening the financial position and leverage of thecompanies involved. One result of the currenteconomic low tide, however, is that there are somespecific caveats to observe. Not only are regulatoryconstraints tightening by the day, but the risk ofinsolvency and the resulting competing claims to pooledcash is becoming an increasingly pressing issue.SIRC’s guide will be written by leading practitionersfrom a wide range of countries who will providedetailed analysis on the provisions in their respectivejurisdictions regarding cash pooling and insolvency. Eachchapter follows the same template for ease ofreference and topics featured include specific legalrequirements from various perspectives, the liability ofcompany directors, the potential for veilpiercing/substantive consolidation, banking requirements,regulatory requirements and implicated tax issues.The SIRC journal: <strong>Insolvency</strong> and<strong>Restructuring</strong> International (IRI)The IRI is an informative substantive journal coveringinternational insolvency and comparative law issues andkey developments of concern to the global insolvency,distressed finance and turn-around communities in theinsolvency fields. As IRI moves into its sixth year, thepublication is accepting advertising in <strong>2012</strong>, and with awide global distribution, provides an opportunity forprofessionals to reach out to the insolvency communityin an efficient way. Persons interested in advertisingshould contact Andrew Webster-Dunn(Andrew.webster-dunn@int-bar.org) at the IBA office.IRI is available on a subscription basis to non-IBAmembers, expanding the range and reach of thejournal. Non-IBA members may arrange for asubscription by contacting Katherine Brewer(katherine.brewer@int-bar.org) at the IBA office. Thesuccess of the journal is due in large measure to theimagination and dedication of its Co-Editors, KarenO'Flynn (Clayton Utz) and Jennifer Stam (Gowlings),and to the hard work of the IBA publicationsdepartment. IRI encourages contributions from allsources. Persons who would like to submit articles forconsideration, or with ideas for topics upon and articlecan be written should contact our Co-Editors.The SIRC website – a place to visitPlease see: http://www.ibanet.org/LPD/SIRC/Inslvncy_Rstrcrng_Crdtrs_Rights/Default.aspx. The website isbeing coordinated by SIRC Website Officer TomásMiguel Araya (M. & M. Bomchil) and Graham McPhie(Moon Beever).Readers who are not yet members of the IBAand/or SIRC to join the IBA by going towww.ibanet.org/join_the_iba/join_the iba.aspx, andselect “<strong>Insolvency</strong>, <strong>Restructuring</strong> and Credi-tors’ Rights”as your free committee or, if you are already a memberof the IBA, add the SIRC membership by adjusting yourprofile in the “My IBA” section of the website.Authors:Judith ElkinCo-Chair IBA-SIRCHaynes and Boone, LLP30 Rockefeller Plaza, 26th FloorNew York, NY 10112USTel: +1 212 659 4968Fax: +1 212 884 8228Email: judith.elkin@haynesboone.comWebsite: www.haynesboone.comDavid JennyCo-Chair IBA-SIRCVISCHER LtdAeschenvorstadt 4P.O.Box 5264010 BaselSwitzerlandTel: +41 58 211 33 49Fax: +41 58 211 33 10Email: djenny@vischer.comWebsite: www.vischer.com18

Reflections on shipping andoffshore restructuringsby Richard Sjøqvist, Bugge, Arentz-Hansen & RasmussenTraces of early debt composition procedures can be found in the Bible,Roman law and has probably achieved a level of maturity through the USChapter 11 procedures (for those able to afford it). Many jurisdictionsdeveloped their modern bankruptcy legislation from the mid-1850s until thedeep depression in the mid-1930s with subsequent sporadic amendments.Although certain jurisdictions have sought to improve their restructuringlegislation, the results do not truly reflect the globalisation of the economicenvironment. Each jurisdiction deals with restructuring based on its culturalheritage which probably is very difficult to analyse in a legal context, withcommon law countries having a creditor friendly approach, while civil lawcountries still favour a protection of a larger group of stakeholders, leavingthe Scandinavian jurisdictions somewhere in between. When dealing withshipping and offshore restructuring, these facts often explain the complexityin the task at hand as shipping and offshore companies are by their natureinvolved in a multitude of jurisdictions, having great flexibility in movingassets from one jurisdiction to another.Until the mid-1960s shipping companies (offshorecompanies did not exist) used to be fairly small, with arelatively simple debt structure. During the last 50years much has changed in the way the shippingindustry has developed – from single ship companiesto international multi-billion conglomerates. Theshipping and offshore industries have becomeenormously capital intensive since the early 1970s. Thefinancing arrangements have also developed andwould, as before, quite often contain loan to valuecovenants, but as companies grow, the covenantswould be more corporate style such as leverage ratioand value adjusted equity ratio covenants. Thecovenants would enable the lenders to re-negotiatethe loan agreement or, more unpleasantly, advancetheir legal rights at stages where not only values dropbut also when income is depleting.Upon breach of covenants a usual pattern foldsout: creditors will advance their legal rights, for thenrecognising that to insist upon a payment, as long asthe debtor has insufficient funds, would not bepossible. Even if such debtor would be able to channelfunds to a particularly unpleasant creditor, thepayment might not only be voidable but the creditormight also be accused of defrauding creditors with thecriminal consequences this might have. Consequently,and usually somewhere along the road, the legalniceties will be forgotten, and pragmatic commercialconsiderations prevail.Commercial pragmatismTurning to commercial pragmatism, shipyards whenfaced with difficulties, will ask for a price increase inrespect of a contract, when ship and rig owners facedifficulties they run to the lenders and to shipyards(if they have something under construction), andwhen charterers face problems they turn to theirsuppliers and customers. The striking similarity willalways be that debtors turn to the largeststakeholders in order to (i) have the most effect outof the negotiations, (ii) keep a closed shop in respectof the challenges, and (iii) achieve quick results.Confronted with economic catastrophe, thedebtors will have to understand whether (a) thecreditors actually are willing to talk, or (b) whetheran organised sale of all or a substantial part of theassets might be just as good a solution. Creditors willhave to understand whether (a) the shipowner isseeking to favour its own position over the positionof creditors, or (b) the shipowner is providingtransparent and intelligent information in a timelyfashion respecting the basic principles of internationalrestructuring as spelt out through the INSOLprinciples: (i) provide time for diligence; (ii) standstill(i.e. no enforcement and freezing of positions); (iii)appropriate organisation of restructuring; (iv)exchange relevant information for evaluation; (v)proposals for resolving the financial difficulties of thedebtor and, so far as practicable, arrangementsbetween relevant creditors relating to any standstillshould reflect applicable law and the relativepositions of relevant creditors; (vi) confidentiality;and (vii) new money obtains some sort of prioritystatus.19

The foundationObviously, any restructuring discussions will have toinclude work such as evaluation of insolvency orenforcement options including jurisdictional planning.An analysis will usually contain the following elements:• Do the security documents and set-off rules work?• Will courts respect the priority of liens?• Will the process be sufficiently expedited?• Will the court fees and liquidator fees bereasonable?• Can creditors enforce the security and againstwhom?• Does forum change in order to get a betterprotection?• Are any pre-emptive actions required?• How to deal with the liquidity management.• Can assets be disposed of, or taken over by thebankruptcy estate?A good restructuring will, however, not be possiblewithout a proper commercial understanding. To thiseffect, if in-house expertise is not sufficient, creditorsor debtors are well advised to engage a commercialadvisor. Many debtors will claim to have sufficientexpertise, but it would not be unfair to say thatcreditors might not really agree or share the sameopinion. Creditors will definitely need to possess orhire competence which enables the creditors to testthe commercial viability of the business, and there isprobably a difference on this point if only banks areinvolved (or a club of banks) who will have a fairlyeasy dialogue among themselves as opposed to largesyndicates and bond arrangements, who will probablyneed the assistance of a commercial moderator.Disputes on the appointment of advisors and theirremuneration are common, but often resolved. Theimportant point being that the remuneration shouldbe aligned with the interests of the party such advisoris representing.Organising the workThe restructuring principles are always based on theprinciple of equality, however I would probably go alongwith the allegorical inspiration of George Orwell:“creditors should be treated equally, but some creditorsmore equally than others”. This means that there is anacknowledgement that creditors are not necessarilyequal. The normal technique is to distinguish between(i) financial creditors, secured and unsecured; (ii) relatedcreditors (such as managers); (iii) other creditors suchas charterers, owners and other material suppliers andcustomers; and (iv) truly trade creditors. When allparties are involved, it would seldom be possiblewithout some sort of bankruptcy protection as tradecreditors usually just stop their supply with the liquiditycrisis and this will entail the whole business.During the organisational phase, the main aim ofthe restructuring would thus be to identify thecategories one wishes to establish in order to initiatediscussions. We normally recommend discussing theclassification with the largest stakeholders with an aimto get their support, making it difficult for others toobject. This has a particular impact on boardmembers’ duties to not give preferential treatment tocreditors, and therefore, the stakeholders approachedwould probably be asked to let some other creditorsbe paid off on a going-concern basis in order to keepa certain control over the negotiations.One of the biggest problems is acquiring acommon understanding of the creditor positions.Distinguishing fully secured creditors from unsecuredcreditors is not always easy. A fully secured creditorwill always take the position that any problems willhave to be resolved by parties who have something atstake. Managing the expectation of the creditors andshareholders in this context is a martial art not tobe underestimated – and as old as any otherprofession: fear mongering by threatening to go forbankruptcy or initiate insolvency proceedings in orderto achieve a result. One piece advice is hereby given –do not threaten, but do promise if you actually meanto do it.The level of playing field has to be clearly set out. Insome of the worst default cases which did not end upin a restructuring, the approach of a rig owner was togive priority to shareholder rights rather than creditorrights – the result? Full elimination of shareholder rightsby bankruptcy. I am fairly confident that someshareholder rights would have been maintained if therig owner had respected some of the basicrestructuring principles set out herein.The planIt is usually during a forbearance period (or standstillperiod) that parties reach agreement in principle withtheir creditors (usually after they have used up allavailable funds). During the standstill period the needfor working capital will materialise depending as towhom is involved in the restructuring. If therestructuring is public, the need will be immediate, if therestructuring is kept confidential, there might be someflexibility. The normal pattern during the standstillperiod is for the involved creditors to agree that thosenot involved shall be settled, such as trade creditors.Sometimes a consensual deal is not possible, in whichevent disclosure to such creditors who will not be paidwould be essential in order to give them theopportunity to voice their opposition. This will create a“terror balance” and the gamble will be whether a nonconsentingcreditor who will not be paid, will actuallystart enforcing its creditor rights or not.20

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Another important consideration is whether theplan should seek some public approbation in order toprotect the parties against any liability and get thescheme protected. If the matter is sufficiently large andsubstantial, many debtors have taken the benefit of USChapter 11 proceedings to at least obtain some reliefand release for their conduct. The solution is notalways easy, as filing a foreign company for Chapter 11in the US not always exonorates the board ofdirectors for their duties in the jurisdiction ofincorporation.The interim periodIt is usual that any plan results in an interim periodwhich gives the debtors a reasonable chance to survivein one way or another and it is in the creditor’s interestthat the debtors are able to work normally withoutconsulting the creditors every day. The period mightbe for a couple of years or more. It is better foreveryone involved that the owner concentrates oncommercial matters. The plan will have to set out howthe running of business may continue in order torecover.Usually a payment schedule is fixed, based uponthe owner’s liquidity budget for the period, but with aqualification that a default will occur only if theirpayments are lower than a certain percentage of thebudget, say 80%. Another solution is to link thepayments to the vessels’ earnings, on a cash sweepbasis; by definition there is little or no danger ofdefault.The reconstruction periodAfter an initial period the creditors would usually like tosee a restoration to normality. This might be the‘reconstruction period’. The reconstruction period isusually only decided upon at the end of the interimperiod, and will very often be linked to the marketconditions at that time to make a realistic repaymentschedule, or just simply agree on a final maturity datewhich might be one to two years after the interimperiod. At this stage the debtor has to return to normalfunctioning. If the debtor fails to meet the requirementsof the repayment schedule, either by earnings, or byrefinancing, they will be in default.Distribution of available fundsOne of the most difficult decisions involves thedistribution of the available funds. There are severalpossible systems or combinations of systems. As astarting point, trade creditors usually have to be paid infull. Without total agreement on this point it would beextremely difficult to operate a shipping company. Thedistribution of the remaining funds is based upon thepremise that the trade debt is fully covered.One system of distributing surplus cash is tosimulate a bankruptcy and see how much eachcreditor stands to lose. The income is then distributedpro rata to each creditor’s uncovered debt. Thismethod is very seldom used to dispose of cash fromthe operation of vessels, but can be used when fundscome from the sale of assets.Another system is to distribute available cashpro rata to the gross debt without making anydeduction for the securities the different creditorsmay have. This system has only been used when thefigures turn out to be much the same as thosecalculated using other systems.The cash sweep system is probably one of themost commonly used mechanisms. The basis is that thecreditor is paid what their unit is earning, thephilosophy being that the creditor is entitled towithdraw the ship, and if they withdraw it, others mayoperate it on the market and the creditor then hasaccess to the total earnings of the vessel. If there areseveral mortgage holders in one vessel, the cashsweep will be combined with the ranking of creditorson the unit.The ranking principle has several branches: forexample, that all available funds from one vessel areapplied first to pay interest on the first priority, thencapital instalments on the first priority, thereaftermoving to the second priority. Another examplewould be to serve interest on all mortgages and thenprinciple on the first lien. The latter is usually appliedin situations where creditors have nothing to lose bybankrupting the company and the senior creditorswould like to avoid this situation occurring.A third version is to fix the market value of theunit and regard the debt to the extent of the marketvalue as senior debt, to be serviced fully, reasoningthat the creditor may sell the vessel at its marketprice and at least recoup that money: they should notbe in a worse position by accepting a restructuring ofthe owner’s total indebtedness. The debt above themarket value is called junior debt and will be servicedonly if there are more funds available. Non-service ofthe senior debt, but not of the junior debt, may bedefined as a default.The ranking principle may be applied unit by unitlinked to the individual vessel’s earnings. It can also beapplied to the whole group by fixing the market value,and consequently the senior debt, on the total fleet;the income of the total fleet is then applied to thesenior and junior debt so that good units supportthose with a lower earning capacity.In some companies it may be difficult to defineexactly what the earnings of one unit are. In theoffshore business the value of the software can beconsiderable, and the unit alone cannot take the22

premium for the full earning of the vessel. In suchcases, we can find the cash sweep will have to beshared with unsecured creditors. The creditor in onevessel is for example receiving 90% of the vessel’searnings, while 10% is allocated to a creditors’ fund forequal distribution. The reasoning behind this is that this10% more or less should be considered the softwarevalue, which belongs to all creditors and which cannotbe utilised by one creditor withdrawing his vessel.The parties often agree to make deductions fromthe vessel’s earnings to be used as an incentive to themanagement organisation to secure its full support orto organise some other incentive plan. Experienceshows that to repay old debt is not sufficient incentivefor any organisation, which needs something moretangible and motivating than working only for thecreditors.Another sum will often be set aside to make somepayment to the unsecured creditors who are nottrade creditors, such as third priority mortgageholders or financing institutions which haveunrecovered debt from a previous sale of a vessel. Toencourage such creditors not to put a company intobankruptcy, it is often necessary to let them have apercentage of the earnings of the group to give themsomething more than the zero result they wouldobtain in a bankruptcy.Lengthy discussions in negotiations will occur onthe structure of the owning company and creditors’control. Creditors in the standstill phase of thediscussions are inclined to suggest a transfer ofownership to companies nominated by them withboard representation or at least a creditor committeewith the ability to restrict the operation. This type ofsuggestion fades during the negotiations as no onecreditor is prepared to take on the burden and mostcreditors are reluctant to take part in active ownershipof a company. No major changes will thus be made inownership structure or operation, except perhaps increating profit sharing expectation at some level.Creditor agreements and bankrutpcyCreditors’ agreements are very complex and it isunfortunate that no bankruptcy regime has been ableto develop a truly satisfactory system under whichproperly negotiated agreements earn the approval ofthe court. Most debtors will at some time during thenegotiations question whether they should actually justfile for bankruptcy proceedings, even if this will be theworst outcome for all parties, as the legislation doesnot protect creditor agreements in an appropriatemanner. Normally they continue to operate with theunderstanding of the creditors not getting paid as abankruptcy would jeopardise everything for them.Author:Richard Sjøqvist, PartnerBugge, Arentz-Hansen & RasmussenStranden 1 A (6th floor)N-0250 Oslo, NorwayTel: +47 (22) 83 02 70Fax: +47 (22) 83 07 95Website: www.bahr.no23

International Women’s <strong>Insolvency</strong> and<strong>Restructuring</strong> Confederation (IWIRC)by Tinamarie Feil, IWIRC Director-at-Large and BMC Group, Inc.The International Women’s <strong>Insolvency</strong> and <strong>Restructuring</strong> Confederation(IWIRC) is a non-profit organisation dedicated to helping restructuringprofessionals advance their careers, develop leadership skills and enjoy thebenefits of being part of a global networking community. For almost 20 years,IWIRC has been engaged as an international organisation connecting womenworldwide and offering its members education, mentoring and opportunitiesfor leadership involvement at both the global and local level.A global organisation, a localnetworkAmong a global membership of more than 1,000attorneys, bankers, corporate-turnaround professionals,financial advisors and other restructuring practitioners,members develop a powerful network of contacts,resources, mentors and friends.IWIRC’s international board creates programmes tofoster national and cross-border relationships andeducation. Through events and interactive tools, IWIRCoffers seminars, intellectual capital, career resources,leadership opportunities and guidance for personaland professional development. In addition, IWIRC isproud to be a designated non-governmentalorganisation (NGO) and active participant in WorkingGroup V (<strong>Insolvency</strong>) of the United Nation’sCommission on International Trade Law (UNCITRAL).UNCITRAL proposes model laws and develops policyrelating to cross-border insolvency proceedings,enhancing understanding, cooperation and efficiencieson a global basis. IWIRC’s NGO participation inUNCITRAL’s Working Group V (<strong>Insolvency</strong>) isalongside international financial organisations such asthe International Monetary Fund and the World Bank,intergovernmental organisations, and other invitedNGOs including the International Bar Association,INSOL and the International <strong>Insolvency</strong> Institute (III).Representatives of UN member states and the othergroups include attorneys, judges, government officials,business executives, and professors from widely diversecultural and political backgrounds.IWIRC’s global conferences are scheduled inconjunction with other major restructuringconferences, leveraging business developmentopportunities and travel budgets. Programmingfocuses on substantive insolvency issues as well asissues relating to its commitment to the advancementof women. Recent programmes have included “EthicalDilemmas in Turnarounds and <strong>Restructuring</strong>s” and“A Conversation with Trailblazing Women In the<strong>Insolvency</strong> Profession.” The <strong>2012</strong> IWIRC’s AnnualSpring Conference and Founders’ Awards will be heldin Washington, DC on April 18-19, <strong>2012</strong>. IWIRC’sinnovative programme will focus on the rewards ofcommunity service. On June 20-22, <strong>2012</strong>, in Paris,France, IWIRC will sponsor the Opening Reception ofIII’s 12th Annual Conference and will present a panelon the differing rights and role of unsecured creditorsin global insolvency cases. IWIRC’s Fall Conference willbe held in conjunction with the National Conferenceof Bankruptcy Judges in San Diego, California onOctober 23-24, <strong>2012</strong>.IWIRC, through its over 30 networks worldwide,offers opportunities for its members to activelyparticipate both at a local level, as well as bewelcomed at events in other locations. Local networksorganise professional, educational and social activitieswithin their communities and regions which arestructured to meet the specific needs and interests ofnetwork members. These conferences are ideal formeeting other professionals in a welcomingenvironment. Some of the recent local programmeshave included topics such as “Build a Career WithoutBoundaries: The Truth About How to Succeed” and“Be Retained, Not Detained: The Ethics of RetentionIssues in Bankruptcy.” Pure networking events are alsoregularly hosted. Practitioners new to the business, ora region, can plug into professional communitiesquickly with IWIRC. Successful professional servicespractitioners understand that building a healthyreferral base requires creating and nurturing healthyrelationships with referral sources (other serviceprofessionals) and clients.Expertise and achievementAs the premier advocacy group for women inrestructuring, IWIRC recognises the value in recruitingand promoting women throughout their careers.Members are invited to speak, publish and present theirintellectual capital at meetings, via the website,24

newsletters, through mail and e-mail and other channelsof communication. Professional public profiles arelocated in the IWIRC online directory and in theSpeakers Bureau, a resource to find panelists andexperts among the IWIRC membership.Although IWIRC, as an organisation, concentrateson the insolvency and restructuring fields, the IWIRCSpeakers Bureau is not so limited. Members of theSpeakers Bureau have an array of talents that easilyextend to other areas, including litigation, asset salesand acquisitions, alternative dispute resolution, financeand forensic accounting, professional development,mentoring, rainmaking and balancing a career, familyand self.In recognition of members and networks whichhave made exceptional contributions to theorganisation and their clients and profession overall, theIWIRC Board of Directors established its Founders’Awards. Categories are The Melnik Award forExceptional IWIRC Member, The Fetner Award forOutstanding International Contribution and The RyanAward for Outstanding IWIRC Network. In 2011,IWIRC also established the Rising Star Award torecognise the achievements of women who havebeen in practice for less than eight years but havedemonstrated exceptional skills and dedication to theirprofession, firms and communities. In addition, each year,IWIRC honours a woman for her recent contributionsto or lifetime achievements as part of the insolvencyand restructuring industry with the Woman of the Yearin <strong>Restructuring</strong> (“WOYR” – pronounced like“warrior”) award. She may be an attorney, judge, banker,turnaround manager, academic or other restructuringindustry professional. She is actively engaged or recentlyretired from the restructuring industry – and fromanywhere in the world. IWIRC membership is not arequirement to make a nomination, nor to behonoured. Importantly, achievements do not have to bein nationally or internationally renowned cases or resultin landmark decisions, simply exceptional. IWIRCwelcomes all entries.Leadership opportunitiesIWIRC offers its members the opportunity forleadership. Both local networks and the internationalorganisation offer “fast track” leadership opportunitiesfor those seeking to take their careers to the next level.Website and contactIWIRC networks are located in Asia, Australia, Europe,and North America. We welcome the developmentof new networks in these or new regions. Visitwww.IWIRC.com for more information.Author:Tinamarie FeilIWIRC Director-at-LargeBMC Group, Inc.875 Third Avenue, Suite 501New York, NY 10022USTel +1 212 310 5922Email: tfeil@bmcgroup.comWebsite: bmcgroup.com25

seen a major corporate entity commence insolvencyproceedings under the Federal framework. Given theuncertainty surrounding the application of the region’sexisting legal frameworks, financially troubledcorporate entities and their creditors have sought, andwill likely continue to seek, consensual out-of-courtreorganisations before turning to formal legalmechanisms.World Bank statistics indicate that an averagebankruptcy procedure in the MENA region takes 3.5years to complete, costs 14.1% of the value of thebusiness and delivers an average recovery rate of 29.9cents on the dollar. This does not compare favourablyto the OECD averages (1.7 years, 8.4% and 68.6cents), and pales by comparison to international bestpractice as seen in Japan (0.6 years, 4% and 92.5cents). 1 The statistics for the UAE (5.1 years, 30.0%and 10.2 cents) reflect the fact that the UAE’sinsolvency framework has not developed at the samepace as the country’s development as an economicand commercial hub. Recent history has witnessedunprecedented economic growth and businessexpansion in the UAE; particularly in Dubai, wherelocal businesses have evolved into global corporationswith multiple sources of finance and diverseinvestments. Whilst there has been an evolution in thebusiness landscape, certain aspects of the applicablelegal and regulatory regime have stagnated and nolonger reflect modern business needs.The increased focus on reforminitiativesDuring previous financial crises in Russia, East Asia andArgentina, attention turned to the importance ofinsolvency systems that support the resolution offinancial distress, 2 in particular, the accessibility of therelevant laws and the efficiency of the institutionsimplementing such laws. Recent events in the MiddleEast have resulted in a similar trend, as policy makersbegin to acknowledge weaknesses in the existing legalframeworks and the need for reform to preservebusinesses as going concerns, strengthen creditors’rights, improve the overall investment climate andstrengthen market resilience. 3 There is also a growingacceptance that law reform by itself is not sufficient;while it is essential to have a robust legal frameworkin place, true reform requires a holistic approach,addressing the capacity and efficiency of local courts,the training of judiciary and the development of abody of experienced insolvency professionals, all ofwhich are essential elements of effective insolvencysystems (see further discussion below).The recent restructurings of Dubai World and itsthen subsidiary Nakheel in the UAE provide highprofileexamples of the value of establishing atransparent, predictable insolvency system based uponinternational standards recognised by global investors.Dubai World case studyDubai World is an international conglomerateencompassing over 200 subsidiaries operating in,amongst others, the real estate development, privateequity, retail, hospitality and shipping sectors. InNovember 2009, Dubai World announced its intentionto seek a “standstill” on its debt repayment obligations,amounting to approximately US$24bn spread amongst95 international financial institutions. Nakheel, then asubsidiary of Dubai World, is a real estatedevelopment company that owed approximatelyUS$23.7bn to a wide variety of creditors, includinginternational financial institutions, public holders ofSukuk certificates and trade creditors.The global financial crisis hit Dubai in Q4 2008,resulting in a crash in the Dubai property market thatsaw a 47% decrease in the valuation of real estate inthe 12-month period from Q4 2008 to Q4 2009, andprompting the November 2009 “standstill”announcement. By the summer of 2011, both DubaiWorld and Nakheel had successfully restructured theirdebts on an out-of-court basis, in each case, with theconsent of 100% of financial creditors, and inNakheel’s case over 90% of trade creditors. The keyfactor that enabled the Government of Dubai toexecute one of the most complex and large-scalecorporate restructurings in recent history was thecreation of a bespoke insolvency system based uponinternational standards recognised by Dubai World’sinternational creditors.Decree 57: Levelling the playingfield for negotiationsDubai World is a corporation established pursuant toa decree issued by the Ruler of Dubai, andconsequently has a unique legal status. Due to itsstatus as a decree corporation, Dubai World wasunable to seek to restructure its debts under theexisting Federal regime applicable to ordinarycompanies incorporated in the UAE. As a result, whenDubai World announced its debt repayment“standstill” in November 2009, there was greatuncertainty as to how a restructuring of DubaiWorld’s debts could be implemented. TheGovernment of Dubai responded by enacting “DecreeNo. 57 of 2009 Establishing a Tribunal to DecideDisputes Related to the Settlement of the FinancialPosition of Dubai World and its Subsidiaries” (“Decree57”), which created a modern legal frameworkdesigned to enable Dubai World and its subsidiariesto restructure their debts through a judiciallysupervisedprocess.27

The regime established by Decree 57 was basedon international best practice and a hybrid of Englishlaw procedures and substantive restructuring toolsproven to maximise value in Chapter 11 of the USBankruptcy Code. In practice, however, although itprovided formal legal procedures through which toimplement a restructuring, the major contribution ofDecree 57 to the extraordinary result achieved inDubai was the provision of a “Plan B” against which tonegotiate an out-of-court restructuring.Perhaps most importantly, Decree 57 enables acompany to implement a restructuring without theconsent of all parties. A restructuring may beapproved based on consent of a majority of creditorsand equity holders in each class (i.e. binding minorityobjectors), or provided that specific legal standards aremet, without the consent of all classes based on theconsent of a majority of creditors in one impairedclass (a procedure known as “cram down”). Becauseof this “cram down” mechanism, no creditor or classof creditors, including secured creditors, could becertain of its ability to unilaterally block a restructuringthat had the support of other creditors. In thismanner, by depriving individual creditors and classes ofcreditors of the ability to block the restructuring attheir discretion, Decree 57 created a level playing fieldfor negotiations in which no party could seek toextract “hold up value” for its consent. Having such anoption provided Dubai World with leverage to rejectunrealistic demands and preserve the greatest valueavailable for all constituencies; as a result, allstakeholders were incentivised to work togethertowards a negotiated solution that reflected thecommercial realities of the situation. While Decree 57does not apply beyond Dubai World and itssubsidiaries, and its formal procedures were neveractually utilised, the region’s policy makers may wishto consider the effect of “the shadow of the law”in motivating creditors to take a seat at thenegotiating table.Of course, not all distressed companies will havethe benefit of a new law created to govern theirrestructuring, and companies in the Middle East inparticular regularly face challenges arising from legalregimes that are perceived to be opaque,unpredictable and ultimately ineffective as a means toimplement a commercial restructuring on a goingconcernbasis. Reform efforts are underway in theUAE, and elsewhere, that may provide companies withgenerally-applicable and more standardised options tobind dissenting parties to a restructuring, as discussedbelow. In the meantime, companies in the Middle Eastmust work to overcome these challenges throughcreative planning among management and legal andfinancial advisors based on an analysis of the particularsituation, the needs of the business, the terms ofexisting agreements and legal procedures that may beavailable outside of the company’s home jurisdiction.UAE bankruptcy law reformAs noted above, the international markets generally donot perceive the procedures set out in the existingUAE legal framework to be sufficient to providecompanies with an opportunity to restructure andreorganise as a going concern through an efficient,transparent and open process. In early <strong>2012</strong>, followingthe successful restructurings of Dubai World andNakheel, the UAE distributed a draft new Federalinsolvency and bankruptcy law that seeks to create newalternatives for companies in the UAE to implement arestructuring without the consent of all creditors. Thedraft law aims to facilitate corporate rehabilitation byintroducing transparency and predictability viainternationally recognised best practices. Some of thekey features of the draft law are:• An ability to implement a restructuring based onconsent of majority of creditors without consentof all individual creditors.• A broad moratorium or stay on action bycreditors, including secured creditors.• The opportunity for a debtor to obtain newfinancing with priority in payment and security overexisting debts, including secured debts, subject to acourt finding the interests of existing securedparties are adequately protected, based on“debtor-in-possession” or “DIP” financing under theUnited States Bankruptcy Code.• The option for a debtor to terminate leases andcontracts, akin to the “assumption or rejection” ofcontracts under the United States BankruptcyCode.The draft law is currently undergoing a thoroughconsultation process and will likely undergo furtherrefinement before being presented to the UAE’sCouncil of Ministers for Cabinet approval andeventual promulgation as Federal law. Based on theconcepts already integrated in the draft law, itsenactment will represent a dramatic step in thedevelopment of insolvency and restructuring practicein the Middle East and a leading example of thereform efforts ongoing across the region.The need for a holistic approach toinsolvency law reformThe success of any new insolvency regime will dependon a number of factors, not just the drafting of therelevant laws. In particular, it should be noted that “theprinciples of reform must be considered in thecontext of the unique political structure, legal culture,and economic and social framework of each country.28

Considering the political, economic, social and judicialdifferences between countries, a “one-size fits all” isneither wise nor workable in this area of law”. 4 Someof the key issues to be addressed in parallel with thereform of insolvency laws are set out below:Challenging cultural stigma and criminalimplicationsBusinesses in all countries face negative perceptions orstigmas when they are forced to restructure, especiallywhen a formal bankruptcy proceeding is commencedto facilitate such efforts. In some countries, such as theUS, and to a lesser extent in the UK, this stigma hasbeen eroded, as well-known companies have gonethrough the bankruptcy process, continuing to operateduring their bankruptcy and then reorganising andbecoming profitable companies once again. Companies,creditors, investors and other interested parties in theMiddle East, tend to have a strong negative bias againstbankruptcy, which can have a profound effect onplanning a successful debt restructuring.A procedure that authorises a company torestructure specific financial debts without the consentof all creditors and without the requirement that they“file for bankruptcy” or engage in a drawn-out courtprocess could be an invaluable tool for companies inthe Middle East to restructure debts while avoiding aperception of “criminal”, “fraudulent” or “dishonest”behaviour and preserving the goodwill of theircustomers and the public. Whilst there is scope foreffective insolvency systems to punish those guilty ofbehaving fraudulently, recklessly or dishonestly, there isalso scope for cases of genuine business failure to betreated in a fair and respectful manner.Building institutional and professional capacityCourt systems play a central role in any effectiveinsolvency regime. It has been widely observed thatthe current court systems in most regionaljurisdictions would find it challenging to overseecomplex bankruptcy and reorganisation proceedings,both in terms of the infrastructure of the courts andjudicial capacity. The Emirate of Dubai has taken stepsto enhance its institutional capacity through, initially, theestablishment of the Dubai International FinancialCentre (“DIFC”) Courts, and more recently thecreation of a special tribunal for the restructuring ofDubai World pursuant to Dubai Decree 57. Inpractice, the effectiveness of the reforms efforts willbe dependent on the ability of the courts andjudiciary to effectively implement the laws in a certain,transparent and consistent manner. In many respects,institutional capacity building with a special focus onthe role of the judiciary, the insolvency professionalsand the state agencies represents a greater challengethat reforming the law itself. The region’s policy makersmight consider creating specialised bankruptcy courtswith access to the expertise needed to decide thecomplex financial issues so often associated withbankruptcy cases – The World Bank’s Doing BusinessReport confirms that recovery rates are much higherin jurisdictions that operate specialised courts.Similarly, the role of insolvency professionals oughtto be considered; insolvency professionals (sometimesreferred to as trustees, nominees, administrators,liquidators etc.) play an important role in aninsolvency system; however, it is essential to theefficiency and credibility of any process that suchindividuals have the necessary skills and experience todischarge their duties to the requisite standard. Nojurisdiction, other than the DIFC, requires insolvencyprofessionals to have received insolvency-specifictraining, and many jurisdictions do not regulateinsolvency professionals at all.Revision of laws relating to the creation andenforcement of asset securityThe presence of an effective and transparent securityregime is a key factor in determining the terms onwhich banks, financial institutions and other investorsare willing to deploy capital in any given jurisdiction –even more so in times of financial uncertainty and lowliquidity. Generally speaking, taking effective andcomprehensive security in the Middle East is not astraightforward process - the registration, priority andenforcement of security interests is particularlychallenging.The region’s policy makers might consider specificreform of the applicable laws, in particular: (i) thetypes of security interest (i.e. mortgages and fixedcharges) available should be clearly distinguishable; (ii)the introduction of the “floating charge” as a means ofsecurity over groups of assets that may fluctuate withtime (such as cash in a trading bank account, stock orinventory) should be considered; (iii) the priorityafforded to each type of security should beunambiguous and identifiable; and (iv) while weappreciate that there are specialist registers forcertain classes of asset (specifically real estate, shipsand aircraft), the introduction of a mandatory centralregister of all security interests against companieswould create more certainty for lenders and wouldlikely have the overall effect of reducing the cost ofborrowing.<strong>Restructuring</strong> of Shari’ah compliant financings<strong>Restructuring</strong>s involving Shari’ah compliant financingsraise a series of endemic issues that have not yet beenspecifically integrated into the region’s insolvency lawsor received common treatment by courts that havehad occasion to consider them. In particular, there aresignificant questions as to: (i) whether Shari’ahcompliant financings should be classified and receivetreatment as a claim for debt (as opposed to equity,30

which typically may not recover value unless claims arepaid in full), or a type of class that is senior to equitybut not considered debt in recognition of the intendedcharacteristics of Shari’ah compliant financing; (ii)whether Shari’ah investors are entitled to vote directlyin an insolvency proceeding, or whether they must votethrough a trustee and have only one vote; and (iii)whether contracts with a debtor that form part of aShari’ah financing may be subject to assumption orrejection. These and other questions should beconsidered as part of the reform process given thesignificance of Shari’ah financing in the region.ConclusionThe fallout from the global financial crisis has proventhat the Middle East is not immune from economichardship and has highlighted the importance of effectiveinsolvency systems in mitigating the financial impact ofsuch crises. <strong>Insolvency</strong> systems in the Middle East aregenerally outdated and unworkable; there is a pressingneed to address the cultural stigma and criminalimplications associated with bankruptcy, to distinguishbetween debtors capable of being rehabilitated andthose in need of efficient liquidation, to modernise lawsin line with the evolving business landscape, and toimprove the function and efficiency of courts andinsolvency professionals. Through the evolution of theDIFC Courts, Decree 57 and its draft Federalbankruptcy law, the UAE’s policy makers have set anexample for the rest of the Middle East and laid downthe beginnings of a roadmap for regional reform.Notes:1Statistics obtained from The World Bank / IFCreport: Doing Business 2010.234“Resolution of Corporate Distress in East Asia” –World Bank Group, Journal of Empirical Finance, 10:199 – 216.“The Challenges of Bankruptcy Reform” – World BankPolicy Research Working Paper 5448.“Corporate Rescue: An Overview of RecentDevelopments from Selected Countries” – GromekBroc K., Parry R., 2006.Authors:Christopher Hall, Partner(Head of Regional Finance Practice)Tel: +971 4 704 6333Email: christopher.hall@lw.comAnthony Pallett, PartnerTel: +971 4 704 6402Email: athony.pallett@lw.comChristian Adams, AssociateTel: +971 4 704 6420Email: christian.adams@lw.comAdam Goldberg, AssociateTel: +1 212 906 1828Email: adam.goldberg@lw.comLatham & Watkins LLPDubai International Financial CentrePrecinct Building 1, Level 3P.O. Box 506698, DubaiUnited Arab EmiratesTelephone: +971 4 704 6300Fax: +971 4 704 6499Website: www.lw.com31


Australian restructuring in thewake of the Eurozone crisisby Marcus Ayres, PPB AdvisoryAustralia’s sound economic position in the pre-Lehman era is a result of strongeconomic growth, largely generated from our significant mineral reserves andstrong demand from neighbouring fast-growth emerging economies.Even in the post-Lehman era, when most of the industrialised worldstruggled to right their economies, Australia survived relatively unscathed;whether through good management, sheer luck, or a combination of the two.In fact, Australia’s real GDP has surpassed pre-Lehman levels, unemploymenthas fallen and business and consumer confidence has remained stable. This isin stark contrast to many developed economies that are still seeking tostabilise GDP.However, with the International Monetary Fund recently releasing adownward revision of about 75 points in growth targets for most majorcountries in <strong>2012</strong>, 1 it is becoming clear that the Australian economy will starthitting troubled times. In particular, the Eurozone crisis is now exposing ourstructural foibles, with the significant shortage of capital at the top of the list.As a result, economic growth for Australia will come under immense pressure,which we consider will result in a marked increase in distress during <strong>2012</strong>.Local banks – challenging timesaheadAustralia is a relatively young economy that lacks thecapital base to take advantage of its endowments.Consequently, one of the pressing issues facingAustralian businesses (and their lenders) is the heavyreliance on foreign-sourced debt to plug a significantcapital shortage. The Australian Bureau of Statistics’September 2011 quarter statistics indicated netforeign debt liability was A$741bn – and on anincreasing trend.Given the Eurozone crisis, the jockeying forposition in debt capital markets is starting to causeproblems for Australian debt issuers. The market istaking a somewhat apathetic approach to Australiandebt, a counter-intuitive strategy given the relative highratings for these debt issuers.For Australia’s bankers that rank as some of thesafest globally, their position is no different. Case inpoint was the pulling of a covered bond issue inEurope during November 2011 by theCommonwealth Bank of Australia (CBA) becausecosts were blowing out.In an attempt to bolster funding, lenders are againlooking domestically. In January, both the CBA andWestpac Banking Corporation raised funds, but at asignificant cost (175 bps and 165 bps over the swaprate respectively).These two debt issues highlight the dark stormclouds already over our shores. For smaller financierswith poorer credit ratings, the position will be farworse. With pricing for these financiers above theselevels, debt issues will be too prohibitive, leavingthem with little choice but to continue their heavyreliance on retail deposits, which already come at asignificant cost.It is also questionable whether domestic raisingsare a sustainable solution to the capital shortages ofAustralian corporates (and their lenders). There isunlikely to be sufficient capacity in the domestic bondmarket to enable continued on-shore debt issues andso our lenders will inevitably need to tap foreignmarkets.When we throw into the mix the high-cost ofdomestic debt, the strong Australian dollar, Basel II andIII capital adequacy requirements and the pressure forlenders to meet analyst growth expectations, a perfectstorm is developing. In order to weather this storm,we expect to see deleveraging accelerate and forlenders looking to improve collateralisation rates, loanportfolios put on the market in <strong>2012</strong>.Not all distressed debt is equalDue to tight debt capital markets, we expect ourlenders will be looking to secure quicker and/oralternative exit strategies to recover capital fromdistressed lends. For instance, we have already seenAustralian lenders returning to the secondary debtmarket after a long hiatus.However, whilst distressed debt sales have releasedmuch needed capital, pricing has started to ease off.When combined with a shortage of new lending34

opportunities, it is unclear whether we will seeAustralian lenders continue to trade as actively in themarket as they have in the past few years. To that end,we expect lenders will need to be more judicious indealing with their distressed lends, perhaps tolerating atie-up of capital whilst other alternatives are exploredfor some deals, and pursuing quick exits at a higherthan expected haircut for others.Nevertheless, one thing is certain; the growing costof capital must be passed on to borrowers whilst themarket adjusts. We expect this to fall largely ontomid-cap and retail borrowers given most institutionaldeals appear to have worked through their problems(at least for the moment). In turn, a combination of afaltering economy and rising borrowing costs will putpressure on these businesses. This may cause them totrip on covenants in the immediate future. As a result,we believe there will be a purge of mid-cap businessesentering the distressed arena throughout <strong>2012</strong>.Flight of foreign capital from AustraliaMany syndicated deals in Australia have enjoyed theparticipation of foreign banks, in particular Europeanlenders. However, with the tightening of debt marketsin Europe, and a growing demand for Europeanlenders to repatriate funds, we have seen a flight offoreign capital out of both distressed and commerciallyviable deals.The flight of foreign capital creates significantproblems for Australian business, primarily because theability to plug the gap left behind by exiting banks isvery hard in the current environment. Local lendersare generally unwilling to increase exposure on olddeals, and are in fact rationalising exposure to certainindustries. Furthermore, US and Asian lenders are notexpected to step into the breach, at least for theforeseeable future.This dynamic creates a very real opportunity for anew lender(s) to penetrate the Australian market. Inparticular, we think there is a real possibility thatChinese banks will look to enter the Australian marketin a meaningful way, considering:• our geographic proximity;• the increasing trend of Chinese investment inAustralian assets; and• significant capital resources in China.The impact Chinese lenders will have on therestructuring market is an unknown, but it is likely theworkout approach will be different if management ofdistress by these lenders is consistent with thatdeployed in South-East Asia.Are hedge funds the capital solution?The flow of hedge fund capital into Australia is arelatively new phenomenon compared to otherregions, but we are now seeing hedge funds injectsignificant capital into distressed deals in a moremeaningful, consistent way. Major Australiancorporations such as Centro, Nine Entertainment Coand Redcape Property Fund have experiencedsignificant hedge fund investment in recent times.With the lack of capital at the traditional end ofthe spectrum, hedge funds may use this marketopportunity to acquire more distressed debt andcapture a longer-term foothold in Australia. This initself raises new issues for lenders and practitioners.Whereas traditional lenders took on a more vanillaview in workout scenarios, the hedge funds are keento explore alternative ways to maximise returns, oftenin ways that the traditional lenders would be unwillingto do. For instance:• Funds are looking to acquire distressed assets ‘offmarket’. There is therefore an opportunity fortraditional lenders to achieve a discrete exitwithout the cost and exposure of a formalappointment. We consider this will prove criticalfor dealing with certain asset classes such asdistressed agricultural assets.• Funds have been more willing to look atalternatives such as debt for equity swaps,something traditional lenders have been keen toavoid for the most part (and will likely remain so).However, debt for equity may present the best‘value recovery’ pathway if asset pricingdeteriorates.• We will likely see a need for more pre-packadministrations that are in vogue in various otherregions, but still underutilised by many practitionersin Australia. The benefit of these ‘pre-packs’ is thatthey often offer an expeditious exit route to alender, consequently avoiding lengthy and oftenvalue-eroding administration periods.There is one major difference setting Australiaapart from most jurisdictions which may have animpact on alternative sources of capital - our insolventtrading laws.Australia’s insolvent trading laws are quite tough,especially when compared to other financial centressuch as the UK or US. In broad terms, Australianlegislation places the onus on the directors to avoidtrading a business whilst insolvent at all times, withstrict civil and criminal repercussions if there is abreach. These laws create an added tension to largeand/or complex informal restructuring assignmentswhere the appointment of an insolvency practitioner(in a formal capacity) is best avoided.In the context of hedge fund involvement indistressed deals, these laws add an interestingdimension. In Australia, it is more difficult for the fundsto deploy their usual arsenal to the asset once they35

get involved. It may therefore be the case that whilsthedge fund penetration into the Australian market willcontinue, it will not be at as high a run rate as withother countries given the funds may feel somewhatlimited in their ability to generate returns.Time to revisit our legislation?Albeit the federal treasury proposed reforms toinsolvent trading legislation in early 2010, thereappears little short-term likelihood of anyamendments to legislation. However, this issue reflectsan interesting conundrum for our legislative body thatpervades the issue of Australia’s attractiveness tocapital on a whole. If insolvent trading laws were to berelaxed, would there be an additional flow of capitalinto the country?A more lenient insolvent trading legislativeframework would provide additional flexibility during arestructure. Perhaps one practical alternative may beto allow an insolvency practitioner to enter adistressed company to guide it to safe harboursbehind the scenes without the fear of being construeda director and liable for insolvent trading (so long asthat practitioner can show the decisions made were inthe best interests of creditors as a whole). Were thisslight legislative change adopted, workouts of largercorporations may be more successful on the basisthat skilled practitioners would be involved earlier.An added benefit might be a greater willingness ofcapital providers to invest in distressed deals on thebasis that they have greater control over the process(by inserting a known quantity behind the scenes)whilst avoiding the ramifications of a formalappointment.An additional hindrance to restructuring inAustralia, and a significant consideration for lendersseeking to inject funds into distressed entities that arecontract focussed, is the upholding of ‘ipso facto’clauses (provisions in contracts permitting terminationof the agreement by one party in the event of theinsolvency of the other). Unlike the US where theseclauses are unenforceable, they are enforceable inAustralia. Consequently, success in a formalrestructuring in Australia is heavily (if not entirely)reliant on the co-operation of major suppliers andcustomers during the restructuring process.Unfortunately, despite a great deal of discussion locallyregarding this issue, it is unlikely legislative change willoccur in this space for some time.Recalibration of asset pricingAustralian asset prices have generally not recalibratedin line with the rest of the world, largely because theeconomy has enjoyed strong economic growth.However, one ramification of the capital shortage is apotential downward recalibration of asset prices.With a potentially greater emphasis on expeditiousexiting by our lenders, lower recoveries on assetprices are likely. This will trickle into the marketresulting in loan-to-value ratio covenant tripping.Consequently, the downward cycle could perpetuateas otherwise good lends will be forced to move to‘bad bank’. Consequently, lenders will need to setaside even more capital to meet adequacyrequirements. Borrowers will then feel the addedstrain as lenders pass these extra costs on.A second issue relating to asset prices is theimpact of unemployment, which has generallyremained low throughout the post-Lehman era. Signsare beginning to emerge that unemployment mayincrease in our market. If these signs prove true, weare likely to see a downward impact on residentialproperty values. Declining residential property valueswill affect consumer demand, again leading to furtherunemployment in a self-perpetuating cycle.Industries facing challenges in <strong>2012</strong>Albeit the mining sector will likely tread water in asoftening environment (although we expect miningservices to come under pressure), other industries,particularly on the eastern seaboard, will not fare aswell. This will further exacerbate the oft-referredtwo-speed economy our Government and centralbankers are trying to manage.We have already seen trouble in the retail sectorfor some time now, and expect that the environmentwill only get tougher. In particular, we would expectconsumer spending to continue weakening as theEuropean crisis remains unresolved, particularly whencombined with further uncertainty in our market andthe recent job losses in the manufacturing and financesectors. Retailers are also facing greater pressure fromoverseas internet shopping sites, which have lowoverheads and provide an attractive alternative giventhe high Australian dollar.We anticipate that the Australian dollar is alsolikely to be a major cause for reduced demand in thetourism and hospitality sectors as outbound tourism isbecoming more affordable for Australians, whilstinbound tourism is becoming more expensive forforeigners.The high Australian dollar is also going to makethis a tough year for our exporters, particularly inmanufacturing. For instance, even though we haveseen significant government support in theautomotive sector, the high Australian dollar simplyprices our product out of the market, the impact ofwhich is already leading to job cuts in the industry.Agriculture will also continue to find it tough.Holding aside weather anomalies associated with the36

Corporate Advisory<strong>Restructuring</strong> and Turnarounds Forensics and Investigations tions<strong>Insolvency</strong> Services

La Nina weather pattern, the high cost of productioncombined with logistical challenges will continue toput pressure on the industry. Competition in thesector is also increasing internationally as investmentramps up in developing countries. As a result, Australiais quickly losing its competitive advantage.Finally, we also expect to see significant challengesfor the energy sector (both non-renewable andrenewable sub sectors) which have been destabilisedlargely because of legislative changes.ConclusionFollowing the global financial crisis and post-Lehmanera, Australia’s economic story has remainedsteadfastly positive, less volatile and remarkablyresilient to global economic shocks. This ‘lucky country’has found itself in the right place at the right time,ideally positioned to weather storms brewing in itsmajor trading partner economies.However, great as that is, it is becoming clear thatAustralia is not immune or permanently shelteredfrom the financial crisis taking hold in other parts ofthe globe.An overarching priority for Australia’s financialinstitutions and companies is being able to accessliquid, cost-efficient capital flows. When combined withthe changing flow of capital into Australia because ofglobal deleveraging and competition for credit, ourhealthy banking sector will likely face challenges, whichwill be exacerbated by stricter banking regulations anduncertainty in local consumer demand.These challenges require an adjustment that willaffect certain sectors of the economy. We also expectto see Australia’s insolvency and restructuring marketchange in a very real and possibly permanent way inthe near future.Note:1IMF World Economic Outlook Update, January 24,<strong>2012</strong>, http://www.imf.org.Author:Marcus Ayres, PartnerPPB AdvisoryLevel 46, MLC Centre19 Martin PlaceSydney NSW 2000AustraliaTel: +61 2 8116 3000 (general)Tel: +61 2 8116 3295 (direct)Fax: +61 2 8116 3111 (direct)Email: mayres@ppbadvisory.comWebsite: www.ppbadvisory.com38

Back to the rescue: How the 2011 Belgianbank crisis was (mis)managed 1by Nora Wouters and Hendrik Bossaert, McKenna Long & Aldridge LLPUntil the beginning of the 1990s, regular banking activities were limited toreceiving deposits or other repayable funds from the public and to grantingcredit. 2 For Belgian financial institutions such as Dexia, Fortis and KBC, thiswas a profit generating undertaking because Belgian citizens are known asgreat savers. The Second Bank Directive made it possible for creditinstitutions from EU Member States to undertake their activities in otherEU Member States without the requirement to obtain a banking licence fromthe host Member State 3 : thus the European passport was born. This increasedcompetition between credit institutions, particularly in Belgium where therewas an enormous amount of deposits waiting for interesting offers. In orderto survive in such a harmonised competitive European financial market, atthe beginning of the millennium Belgian banks formed the view that they hadto grow in size and territory and expand to investment banking in order toremain profitable. Fortis was the result of the merger of AG and Amev, ASLK,the Generale Bank and finally ABN AMRO. Dexia (the result of a mergerbetween Gemeentekrediet and Crédit Local de France), acquired, amongothers, the American bond insurance company FSA and Turkish Denizbank.KBC is the result of a national merger, which saw potential in EasternEuropean acquisitions. In the good times these acquisitions were financedfrom the available excess capital of banks, which was also used for themarketing of and investment in complex financial instruments such asCDOs, which (at the fall of 2008) appeared to be one of the reasons for thefinancial crisis.The first bail-out round in 2008-09 resulted in a splitof Fortis into Belgian, Dutch and Luxembourgundertakings, whereby the banking activities of theBelgian undertaking became 75% owned by BNP Parisand 25% by the Belgian government. Dexia and KBCwere able to survive the 2008 banking crisis thanks toa mixture of capital contributions and stateguarantees. 4 At that time, it was already clear thatmany of the measures taken would not be sustainablein the long term.The bigger picture: Basel III and EUCapital Adequacy RulesUnder the Basel III rules, which will be phased in atdifferent stages, with 2019 as the end date, banks willhave to hold top quality capital equal to 7% of theirassets adjusted for risk. Basel III sets out 14 criteriawhich have to be met by own funds instruments,ensuring that these funds can be used in cases of stress.In addition, Basel III asks banks to be ready withsufficient cash in cases of stressed market conditions.A leverage ratio will be an additional method ofsupervision. The biggest banks will be hit with additionalsurcharges of up to 2.5%. In <strong>2012</strong>, banks in theEuropean Economic Area (EEA) will also have to hit atemporary 9% ratio after discounting their riskysovereign debt holdings.In 2011, the European Commission (EC) released anew legislative package consisting of a proposeddirective 5 and a proposed regulation. 6 The proposedregulation sets out harmonised prudential rules whichinstitutions throughout the EEA must respect, ensuringa uniform application of Basel III in all EEA MemberStates, focusing on capital adequacy requirements, thenecessity of liquidity buffers, reduced leverage throughthe introduction of a leverage ratio and counterpartycredit risk. Furthermore, the proposed directivefocuses on enhanced governance, enhancedsupervision, and the possibility of supervisors to applysanctions and initiatives whereby the overreliance bycredit institutions on external credit ratings isdecreased.The individual case studies1) DexiaDespite the €6.4bn capital increase and €150bn ofstate guarantees in 2008, the reform plan which Dexiafiled at the EC in November 2008 did not impressCompetition Commissioner Neelie Kroes because thefinancial market still did not have enough confidence inDexia due to its huge debts. 7 A major problem wasthat Dexia Crédit Local, the French branch of Dexia,39

had established a system whereby local governmentswere financed with deposits which only came fromBelgian deposits. The Belgian-French lobby machinefinally managed to convince Commissioner Kroes thatan accelerated write-off of these debts was notnecessary. The result was that Dexia’s legacy (includingan enormous portion of obligations of several PIIGS 8countries and interest-rate swaps) would remain inDexia, accompanied by a sufficient amount of capitaland strict monitoring. This resulted in a deadlycombination: the French concern regarding localgovernment financing remained, but the Belgian branchwas further abused and the dividends payable tohistorical shareholders of Dexia and the bonus policywere kept in force.The interest-rate swaps would become the triggerto the second bail-out. Dexia had boosted itsprofitability by relying on cheaper short-term financingin the wholesale market. It reinforced the effect bypurchasing long-maturity bonds using short-termborrowings. One could easily conclude that the bankwas a “hedge fund of rates”: it played on the spreadbetween long-term and short-term interest rates togenerate returns. However, if the German long-terminterest rate decreased, the interest-rate swaps losttheir value. As a result, Dexia was forced to add cashas collateral. It appears that Dexia did not take anyinsurance to cover this risk. In the summer of 2011,when the debt crisis returned to the financial spotlight,this risk became heightened because investorsinvested heavily in German debt paper, resulting in anhistorical decrease of the German long-term interestrate. As a result, by the end of September, Dexiasuddenly had to deposit up to €46bn, which had tobe borrowed on the interbank market which becamemore and more difficult because of the euro crisis.Dexia Holding was already working internally on areorganisation plan during the summer of 2011,whereby the major shareholdings would be soldgradually and the revenues would be used to increasethe capital structure of Dexia Holding, as a buffer foraccrued losses which may occur when selling orwriting off the legacy. On October 3, 2011 Moody’sreleased a communication stating that the credibilityperspectives of Dexia Holding would be decreased.The Belgian government, which was at that time stillofficially in the throes of resignation, decided that theonly reasonable option would be to nationalise DexiaBank Belgium out of Dexia Holding, and thereforeoffered the French government, as co-mainshareholder of Dexia Holding, €4bn, 9 who undertookto pay the social liabilities related to Dexia Holdingand kept 60.5% (€54bn, to be increased with interestand accompanying elements) of the state guaranteeswith respect to loans offered by Dexia Holding.Therefore, the Belgian and French governments stillremained responsible for Dexia Holding 10 (becoming aso called “bad bank”), which would collect the salerevenues of its subsidiaries.The EC raised concerns that the guaranteesgranted by the Belgian, French and Luxembourggovernment might infringe state aid regulations.However, on December 21, 2011 the EC authorised,under the EU state aid rules, a temporary guaranteeon the refinancing of Dexia considering that, given thesystemic importance of Dexia SA, the guaranteemechanism would be necessary in order to preservethe financial stability of Belgium, France andLuxembourg. 11 In addition, three Belgian organisationsfiled a cancellation request at the BelgianAdministrative Court (Raad van State/Conseil d’Etat)against the Royal Decree dated October 18, 2011 ongranting a state guarantee with respect to specificloans of Dexia NV and Dexia Crédit Local SA,approving the abovementioned state guarantee,claiming that the state guarantee which might beenforced represented 15% of the Belgian GDP whilethe French guarantee only represented 2% of its GDP.Furthermore, the organisations claimed that it was athreat to the nation that such a guarantee could beenforced solely by the Minister of Finance.Besides the Belgian and French governments, therewere three other main shareholders of DexiaHolding: i.e. the Communal Holding, Arco and Ethias.The Communal Holding consisted of almost allBelgian communes, provinces and regions as itsshareholders. The sole main asset of the CommunalHolding was a participation of 14.1% of the Dexiashares and instead of a diversification of itsshareholding, the Communal Holding began to act as ahedge fund regarding its participation in DexiaHolding. Furthermore, in 2008 the Communal Holdingparticipated in the capital increase of Dexia through aloan, whereby the new shares were used as security.However, given the fact that Dexia’s share price wasseriously decreased, a new state guarantee becamenecessary in September 2009. As a result, it becameclear that it had run into serious financial difficultieswhen a second bail-out was required in October2011. This resulted very quickly in a logical decisionby Communal Holding to go into liquidation onDecember 7, 2011, in order to avoid bankruptcy.Arco, which is a cooperative company of theChristian Democratic party’s labour movement, ACW,had a participation of <strong>13</strong>.8% in Dexia. Approximately750,000 Arco shareholders had an averageparticipation of €1,850. Because of Dexia’s situation,three Arco cooperative companies had no otherchoice than to go into liquidation. However, itappeared that the contribution of Arco shareholders40

would be protected by a guarantee offered by theBelgian government, which would cost approximately€1bn. Arco states that this state guarantee is grantedby law 12 on the condition that a case-specific RoyalDecree is approved.The Royal Decree dated November 7, 2011 ongranting a guarantee of the capital of recognisedcooperative companies provided a state guarantee forthree Arco cooperative companies. Critics argued thatthis royal decree is an infraction of the principle ofequal treatment because the Arco shareholders aregranted a protection which does not apply to othershareholders. The Flemish Federation of InvestmentClubs and Investors filed a writ against the Belgiangovernment in order to suspend and cancel the Arcoguarantee.Finally, the insurance company Ethias held 88million or 5% of the Dexia shares. Under BGAAP,these shares were accounted for in Ethias’ books atnominal value (different to ISFRS) and far above thereal value of these shares in the light of Dexia’sfinancial difficulties. Because of the state aid Ethiasreceived during the 2008 financial crisis, it must sell itsDexia shares by <strong>2012</strong> at the actual market valuewhich would have resulted in serious losses andeventually the withdrawal of its insurance licence.Ethias complied with the EC’s requirement by passingthis participation on to its parent company, EthiasFinance. In order to take over this participation whichwas originally booked at €280m, Ethias Finance had toundertake a bond issue, subscribed for approximately€180m by the federal and regional governments. As aresult, the Belgian taxpayer again paid for the lossessuffered by shareholders on the Dexia downsize.It is unlikely that the nationalisation processundertaken by the Belgian government will besuccessful. Dexia Bank Belgium, which is as fromMarch 1, <strong>2012</strong> renamed as Belfius, could still run intodifficulties given the fact that (1) the exact amount ofDexia’s holding state guarantees is currently unclearbecause it also refers to interests and accompanyingelements; and (2) Belfius still has a substantial amountto be reimbursed by Dexia Holding. In the meantimethe Belgian government would receive a remunerationfrom Belfius for the state guarantees they provided,but this is also a reason for rating offices todowngrade the Belgian rating. Furthermore, thepresentation of the 2011 financial results (€11.6bnlosses) showed that those remunerations are veryunlikely to happen. In addition, Dexia Holding mightneed to be recapitalised. A key element indetermining the success of the Dexia transformationwill be the revenues from the sale of Dexia Holdingsubsidiaries. Some of these subsidiaries have alreadybeen sold, such as Dexia’s Luxembourg subsidiaryDexia BIL (90% to Precision Capital, a Qatarinvestment group). Other divisions of Dexia Holding,such as its French division Dexia Crédit Local (whichmay be nationalised by the French national government)and Dexia Asset Management are still to be sold.2) FortisAfter the 2008 bail-out, the banking activities of FortisBelgium became 75% owned by the French financialgroup BNP Paribas and 25% by the Belgiangovernment. Similar to the Dexia case, BNP Paribas hadalready used several billion euros deposited at BNPParibas Fortis Belgium by Belgian citizens to rectify itsown liquidity situation in France, which was moreproblematic because of the BNP Paribas exposure toGreek bonds. This cash mobilisation towards BNPParibas has not been compensated by matchingtransfers to its Belgian subsidiary, BNP Paribas FortisBelgium. This could present a problem because (1) itcould become increasingly difficult for the Belgian bankdivision to grant credit; and (2) in a scenario whereBNP Paribas would have to be dismantled, BNP ParibasFortis Belgium would lose part of its deposits in BNPParibas. One might raise the question as to whether allof these cash mobilisations are done at arm’s length.Fortis Insurance, having a division in Belgium andThe Netherlands, was renamed as ‘Ageas’. Together,BNP Paribas (11.8%), Ageas (44.7%) and the Belgiangovernment (43.5%) have a participation in Royal ParkInvestments, the “bad bank” of the former FortisHolding which was largely dismantled in 2008. Thedismantling of Fortis Holding has led to several judicialclaims during the last few years, in which Ageas (assuccessor of Fortis Holding) was involved. Ageas wona case against the Belgian-Luxembourg fund managerTreeTop concerning “Floating Rate Equity-linked HybridSecurities” which Fortis Holding sold as perpetualbonds in order to strengthen its capital position withinthe group. TreeTop claimed that certain contractualclauses were invalid and that the securities should bedeclared null and void, resulting in the possiblereimbursement at the nominal value of the securities,which was much higher than the actual market value.In a worst-case scenario, this would have cost Ageasup to €1.25bn, but in February 2011 the BrusselsCommercial Court rejected TreeTop’s claim.Furthermore, a group of former Fortis Holdingshareholders began proceedings against the Belgiangovernment, claiming that the dismantling of FortisHolding was unlawful. The Brussels Commercial Courtruled in February 2011 that Ageas and not the formershareholders were allowed to claim compensation.3) KBCIn order to save KBC from bankruptcy, the BelgianFederal and Flemish governments each made a nondilutivecore capital contribution of €3.5bn. In addition,41

an asset relief measure (a type of state guarantee) on aportfolio containing Collateralised Debt Obligations(CDOs) was granted by the Belgian Federal authorities,covering 15 CDO portfolios with an aggregate notionalamount of €20bn. Given the fact that KBC receivedthree substantial aid measures due to the financial crisis,the EC ruled that it would have to undergo in-depthrestructuring in November 2009. The EC approved thestrategic plan submitted by the Belgian authorities,which included a refocus on its key bancassurancebusiness on its core markets (Belgium, Czech Republic,Hungary, Slovakia, Bulgaria), a reduction of its riskweightedassets and a decrease of its risk profile.As a result, KBC needed to divest or run-down asignificant number of businesses, including some inCentral and Eastern Europe, particularly those thatwere not fully in line with its core bancassurancebusiness model on its core markets. Furthermore, itwould divest a banking business (Centea) and aninsurance business (Fidea) in Belgium which wouldstimulate competition in this core market. Thereorganisation plan also included the repaymentmodalities of the two capital injections to the Belgianand Flemish authorities. <strong>13</strong>The reorganisation plan meant that not only wouldKBC have to reduce its size in Belgium, it would also,as a result, have to make cutbacks of its expansionwhich it had predominantly reached in EasternEurope. The dream of becoming a large Europeanplayer had suddenly come to an end by the sale ofCentea (to Landbouwkrediet, which consequentlybecame one of the bigger mid-sized Belgian financialinstitutions), Fidea (to the American investment groupJC Flowers & Co) and its private banking division, KBLepb located in Luxembourg, to Precision Capital. Thesale of the Eastern European subsidiaries is currentlymore difficult, but on February 28, <strong>2012</strong> KBCannounced that Banco Santander would take overKredyt Bank, allowing KBC to gradually leave the Polishbanking market. The divestment projects of AbsolutBank (Russia) and KBC Banka (Serbia) has yet to bestarted. The positive outlook resulted in KBC’s shareprice increase in December 2011.However, although at first glance it seems that KBChas come out in a better position when comparedwith the three major Belgian financial institutions(contrary to Fortis and Dexia it has not beennationalised and seriously dismantled), critics fearthat the worst is yet to come for KBC and eventuallyit will have to undergo a similar bail-out as for Dexiaand Fortis.Conclusion: Back to the futureIt is clear that the banking crisis has severely hit thethree major Belgian financial institutions at a time of fullexpansion. One could argue that Dexia, Fortis and KBCare now back in the same position that they were atthe millennium: a strong national presence backed bysignificant Belgian deposits. But as a result of the crisis,they are also carrying both known (owed tonational/regional governments) and undetermined(CDOs and other toxic products) debts. The debts andthe reorganisation measures taken to solve them could,for some of these credit institutions, lead to a creditshortage vis-à-vis their customers, but also to financialproblems at national state level because defaults underthe governmental guarantees and loans granted to thefinancial institutions could still occur. Such uncertaintyon the repayment of state guarantees and loans couldtrigger downgrades by rating offices, emphasising thefinancial instability and create a waterfall impacting onthe rating of the country. Furthermore, the EC’slegislative proposals, which are intended to strengthenthe financial institutions internally in the long term andimplement the Basel III guidelines, will also in the shortterm force the financial institutions in the EEA tostrengthen their financial status, which could bring theminto even greater financial difficulties.Notes:1This article has been written mainly on the basis offacts as were presented in the financial press andpress releases of the relevant credit institutions.2General definition of a credit institution as definedby Article 1 of the First Council Directive77/780/EEC of December 12, 1977 on thecoordination of the laws, regulations andadministrative provisions relating to the taking upand pursuit of the business of credit institutions(OJ L 322, 17.12.1977, p. 30–37) (“the First BankDirective”).3Second Council Directive 89/646/EEC of December15, 1989 on the coordination of laws, regulationsand administrative provisions relating to the takingup and pursuit of the business of credit institutionsand amending Directive 77/780/EEC (OJ L 386,30.12.1989, p. 1–<strong>13</strong>) (“the Second Bank Directive”).4See “The European banking crisis of 2008/09 – theproblems yet to come” by Hendrik Bossaert andNora Wouters, Euromoney <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> Yearbook 2010/2011.5Proposal for a Directive of the European parliamentand of the Council on the access to the activity ofcredit institutions and the prudential supervision ofcredit institutions and investment firms andamending Directive 2002/87/EC of the EuropeanParliament and of the Council on thesupplementary supervision of credit institutions,insurance undertakings and investment firms in afinancial conglomerate.42

mckennalong.com<strong>Global</strong> ExperienceFor further informationplease contact:Nora WoutersMcKenna Long & Aldridge LLPAvenue de Tervueren 2B-1040 BrusselsBelgiumEmail:nwouters@mckennalong.comennalong.comTel: +32 2 278 12 11McKenna Long & Aldridge LLP (MLA) is aninternational national law firm with 475 attorneys andpublic policy advisors. The firm provides businesssolutions in the areas of corporate, finance, litigation,environmental, energy, climate change, governmentcontracts, health care, intellectual property andtechnology, international law, public policy andregulatory affairs, fairs, and real estate.The MLA Brussels office fice opened in 1990 and featuresa diverse group of lawyers from multiple countries, allof whom are leaders in important legal practice areasand provide counsel to clients on a wide-range of EUregulatory and business law matters.Nora WoutersMs. Wouters has a wealth of experience in assisting international national banks, companies andprivate equity clients in complex financing activities and corporate restructurings throughoutEurope, securitization structures, collateral arrangements and public or private issues offinancial instruments. She is appointed liquidator in Belgian companies and frequently actsas advisor to foreign restructuring and recovery specialists.Ms. Wouters advises national governments, clearing houses, banks, investment funds,brokerage houses, and investment companies on all aspects of financial services regulation.Ms. Wouters is a speaker at various conferences ences on corporate restructurings and has alsowritten related articles. Furthermore, per the request of the DG for internal nal policies of theEuropean Parliament, Ms. Wouters co-authored the note titled “Harmonization of <strong>Insolvency</strong>Law at EU Level.”ALBANYANYl ATLANTAl BRUSSELSlDENVER l LOS ANGELESl NEW YORKl PHILADELPHIAl SAN DIEGOl SANFRANCISCOl WASHINGTON, DC

6789101112Proposal for a Regulation of the EuropeanParliament and of the Council on prudentialrequirements for credit institutions and investmentfirms.Press release available at: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/399.PIIGS is an acronym for Portugal, Italy, Ireland,Greece and Spain.Instructions have been given to the FederalParticipation and Investment Company by the Royaldecree dated October 10, 2011.Article 2 of the Royal Decree dated October 18,2011 on granting a state guarantee with respectto specific loans of Dexia NV and Dexia CréditLocal SA.Full press release:http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/1592&type=HTMLLaw dated February 22, 1998 on the organic statuteof the Belgian National bank.<strong>13</strong>Commission Decision on the State Aid n° C18/2009 (ex N 360/2009) implemented by Belgiumfor KBC.Authors:Nora Wouters, PartnerTel: +32 2 278 1215Fax: +32 2 278 1200Email: nwouters@mckennalong.comHendrik Bossaert, AssociateTel: +32 2 278 1260Fax: +32 2 278 1200Email: hbossaert@mckennalong.comMcKenna Long & Aldridge LLP2 Avenue de Tervueren1040 Brussels, BelgiumWebsite: www.mckennalong.com44

The close relationship between insolvency practitioners andfinancial regulators in the Caribbean and Bermudaby Scott Andersen & Tim Le Cornu, KRyS <strong>Global</strong>Historically, in the Caribbean and Bermuda offshore financial centres, therehas been a close relationship between those who provide insolvency andrelated services (<strong>Insolvency</strong> Practitioners) and those who regulate thefinancial services industry (the ‘Regulators’). Regulators may seek theassistance of <strong>Insolvency</strong> Practitioners in limited roles in investigating certaintransactions or in much greater roles as examiners, controllers or liquidatorsof regulated entities.While such a relationship may on the face of it seemunusual, the reasons that such a relationship existsarises from the specialised skills and experience that<strong>Insolvency</strong> Practitioners possess in the Caribbean andBermuda. In many of the insolvency assignments thatoccur offshore, <strong>Insolvency</strong> Practitioners have to usediverse skills ranging from forensic accounting, fraudinvestigation, and asset identification and procurement.These same skills are those that can assist Regulators ininvestigating regulated entities for potential breaches ofthe laws and regulations or where the Regulators needto exercise their enforcement powers.This article will focus on those situations where,based on our experiences in the Caribbean andBermuda, <strong>Insolvency</strong> Practitioners have been broughtin by the Regulators to assist them in the conduct oftheir duties and responsibilities in the monitoring andenforcement of the regulated financial services sector.Off-site regulatory investigationsRegulators, in monitoring the regulated financial servicessector, conduct off-site investigations of regulatedentities. As the word implies, ‘off-site’ inspections involvework done on information outside the premises of theregulated entity (usually conducted in the offices of theRegulators) using information and documents receivedby the Regulators. This may include financial records,correspondence or in unusual circumstances, computerrecords. These may come from the regulated entity orvia the gateways of regulator to regulator assistance.In certain circumstances the Regulators may receiveinformation from the criminal authorities (via thegateways available with them), clients or other parties.In those circumstances where the Regulatorsrequire particular skills or capabilities not readilyavailable within their staffing, skills or resources, orwhere they require the added comfort that anindependent investigator may provide (particularly ifthere is a risk of judicial review), they may seek theassistance of an <strong>Insolvency</strong> Practitioner to conduct theinvestigation or analysis. In these circumstances, theRegulator will retain the <strong>Insolvency</strong> Practitioner toprovide certain agreed upon procedures or analysis,and provide either a formal report or financial analysis.These will then be utilised by the Regulator along withits own work and analysis, to determine what furtheraction may or may not be required.Examples of off-site investigations in which the firmhas been involved include a review of certaintransactions of a regulated entity involving allegationsinto inappropriate payments and activities; and aforensic review of the data on the hard drive of acomputer presented to the Regulator by an employeeof a financial institution.On-site regulatory investigationsIn addition to monitoring the regulated financialservices sector off-site, the Regulators conduct frequenton-site inspections of regulated entities. Those on-siteinspections occur at the premises of the regulatedentity and can either be focused (that is, limited tocertain functions or processes) or full inspections. Anexample of a focused inspection is one that reviews theanti-money laundering policies and procedures. Anotherexample may be a review of corporate governance.Similar to off-site inspections, the Regulators mayrequire certain specialised skills or capabilities notreadily available within their staffing contingent orresources. Where the retention of external expertiseis deemed appropriate, the Regulator will retain the<strong>Insolvency</strong> Practitioner to act as an agent of theRegulator for the purposes of the specific area wherethe assistance is required. In this role the <strong>Insolvency</strong>Practitioner will conduct his work and report hisfindings and recommendations to the Regulators inthe agent role. It is possible that the <strong>Insolvency</strong>Practitioner will also provide input on the reportissued by the Regulator to the regulated entity. The<strong>Insolvency</strong> Practitioner will normally not provide anyindependent report or analysis, and once the report is45

issued, will not have any further role in relation tomonitoring and supervision of the licensee.Situations where this firm has been involvedinclude review of anti-money laundering policies andprocedures; analysis of complex derivative andsecurities transactions; and an investigation into certainshareholders transactions.Examination of the regulated entityMost Regulators have the powers to appoint anexaminer to examine the affairs or business of alicensee for the purposes of satisfying the Regulator thatthe laws have been or are being complied with, andthat the licensee is in a sound financial position and iscarrying on its business in a satisfactory manner. Theexaminer is required to provide a report to theRegulator as to his findings. The fees of the examinercan be borne by the licensee or the Regulator.When Regulators exercise this power, it is usuallybecause the scope and extent of the examination ismore comprehensive than that which may arise in anon-site inspection, and also the Regulator intends onrelying on the independent examination in order toassess what action is required. In conducting his work,the examiner will need certain investigative and forensicskills and resources to determine whether the licensee isin sound financial position and carrying out its businessin a satisfactory manner. These are skills and experiencewhich <strong>Insolvency</strong> Practitioners will have in the offshoreworld and it is often the case that Regulators willappoint <strong>Insolvency</strong> Practitioners for this role.One of the issues that can arise is access toinformation. It is thus important that the Regulator issatisfied that the licensee will allow the examineraccess to the information he or she requires toconduct the work that is necessary to comply withthe scope of the examination. To the extent suchaccess is not available, it is often difficult for theexaminer to conduct his or her work or to provide asubstantive report. Gaining access can particularly bean issue when there are allegations of fraud ormisconduct, and/or where the books and records areheld outside the jurisdiction and there may be adispute as to who owns the documents or howaccess can be gained. In these circumstances, anexamination may not be productive or beneficialand the Regulator will need to assess whether someother alternative course of action is appropriate andshould be taken.Appointment of a controller oradministratorThere may be circumstances where the Regulator hasto take more draconian and stronger action in regardsto a regulated entity. The Regulator will consider suchaction normally where it has completed its owninvestigation, which may or may not include any of theprocesses mentioned above, and it feels it necessary totake certain enforcement action to protect theinterests of stakeholders, particularly if there is a fearthat the licensees’ assets may be at risk of dissipation.In certain offshore jurisdictions this is referred to asappointing an administrator; in others it is referred toas a controller. Their role and purpose, however, ismuch the same.In the Cayman Islands, the Regulator has thepower to appoint an independent party, to assumecontrol of a regulated company’s business andoperations when the licensee has contravened lawsand regulations. Between 2008 and 2010 the CaymanRegulator appointed a controller on five separateoccasions.The decision to appoint a controller (oradministrator) is not something that the Regulatorstake lightly and without due consideration. Such actionwill only be exercised where no lesser action isappropriate and it is necessary for the Regulators toprotect stakeholders and reduce financial crimes byseeking to stop licensees and unauthorised personscarrying on insolvent or unlawful business, and toprotect the assets of a company. The factors that theRegulator will consider prior to exercising this actionis the seriousness of any breach of regulations andsteps required to correct the breach; the extent ofany loss, risk of loss or other adverse effect onstakeholders; the extent to which the stakeholder’sassets appear to be at risk; the financial resources ofthe licensee; management’s present and historicalattitude to resolving problems; and the availability andeffectiveness of alternative solutions. The Regulator hasto balance the adverse impact that the appointmentof a controller may have on the business of theregulated entity compared to the interests of thecreditors and other stakeholders in the entity and thereputation of the jurisdiction as a whole.<strong>Insolvency</strong> Practitioners are usually the preferredpersons for the controllership role as they have theindustry specific skills and experience needed toeffectively discharge the duties and obligationsconferred upon them as a controller. Suchappointment is done through formal appointment, theRegulator instructs the appointee of the statutorypowers the regulator is exercising to effect theappointment; the powers conferred upon thecontroller; and the basis on which it is seeking theirappointment.The powers conferred on the controller willenable him or her to assume control of the affairs ofthe entity, conduct the necessary investigation into theregulated entity’s financial affairs and consider whether46

the said entity has been acting in a manner that is inthe best interests of its creditors, investors and/orother stakeholders. In order for these powers to bereinforced and to assist the controller generally todischarge its duties, the Regulator may require thecontroller to apply to the court seeking orders thatthey have all the powers of a person appointed as areceiver or manager pursuant to the bankruptcy law.Obtaining such powers will assist the controller incollecting the records and assets, particularly whenthey might be domiciled outside of the jurisdiction andthe controller needs to apply to the Court fordirections on any matter.As mentioned above, the appointment of acontroller is a serious action for the Regulator to take.In effect, the controller will assume the powers of thedirectors of the regulated entity. The directors remainon the board and continue with their duties andresponsibilities to the creditors, investors andstakeholders, but cannot use the powers usuallyavailable to them.In order to discharge the mandate of hisappointment, a controller will immediately take stepsto take possession or make copies of the books,records and other documents pertaining to the affairsof the entity to enable analysis of the financial position.In conjunction with this, he will also take steps toassume control of, and collect in, all the property orassets to which the regulated entity is entitled; andinterview any person who may assist in theinvestigation into the company’s affairs.Because of the seriousness of the enforcementaction, and the possibility that the regulatory issues orconcerns can be rectified or hived off and theregulated entity could continue to operate, controllerswill maintain an active and open dialogue with theRegulator, keeping them informed of the progress oftheir investigation, preliminary findings and any othermatters which they believe should be brought to theattention of the Regulator. The Regulator will invariablyreceive enquiries from stakeholders seekinginformation pertaining to the status of the entity,therefore the active and open dialogue between theController and the Regulator will assist the Regulatorto assess the situation and take appropriate action inthe circumstances, particularly where it is possible toaddress the concerns to permit the entity to continueto operate and/or conduct regulated business.The terms of the appointment require thecontroller to file a preliminary report with theRegulator, usually within a short period of time, settingout his findings and recommendations. In assessing hisrecommendations, a controller has a number ofoptions, which include, but are not limited to: returningthe control of the entity to its directors; de-registeringthe entity; replacing its promoter or officers;appointing an advisor or inspector to the entity;reorganising the entity; continuing the controllership;or making an application to the court for liquidationof the entity. Due to the importance of therecommendations to the Regulator and the impactthey may have on the regulated entity, a controllermust perform its investigation and analysis diligently toensure that the suggested course of action isappropriate, measured and justified.The Regulator will consider the recommendationscontained in the report and decide what, if any,further action it might take, mindful of its objectives inoverseeing the conduct of entities within theregulated financial services sector.Appointment of a liquidatorIf the Regulator determines that the extent of thedeficiencies and/or breaches in the law are so seriousthat it is impractical or impossible for the regulatedentity to rectify them or where the ability of theregulated entity to continue as a going concern isseriously in doubt, the Regulators may decide thatwinding up the entity is the appropriate course ofaction. In this circumstance, the controller’s role willterminate on the appointment of the liquidator so thatthe winding up can be done without a separate anddistinct duty to the Regulator. Usually the professionalappointed as liquidator is the same as that appointed ascontroller, but that is not necessarily the case.In certain jurisdictions the liquidator must be alicensed or authoried insolvency practitioner from thelocal jurisdiction. In other jurisdictions foreigninsolvency practitioners may be appointed or may actjointly with a local insolvency practitioner. In ourexperience offshore Regulators will often look to haveat least one of the persons put forward as liquidatorto conduct the winding up of the regulated entity andinvestigation of the entity’s affairs locally residing in thejurisdiction. Because a regulated entity may still haveregulatory obligations even after the appointment of aliquidator, or simply because there may be informationor lessons that can be learned and will assist theRegulator in the conduct of monitoring andenforcement of the regulated financial services sector,the Regulator may request that the liquidator provideit with reports or updates during the course of theliquidation.Conclusion<strong>Insolvency</strong> Practitioners and Regulators in theCaribbean and Bermuda offshore financial centres havealways had a close relationship in the supervision andenforcement of the laws and regulations particularly incircumstances where there are allegations or concerns47

of fraud or mismanagement. <strong>Insolvency</strong> Practitionershave specific expertise and experience in the areas offraud investigation, forensic accounting and assetrecovery which are important in the conduct ofinvestigations of regulated entities and the provision ofrecommendations arising from such investigations andenquiries. <strong>Insolvency</strong> Practitioners can assist Regulatorson off-site and on-site inspections in the provision ofresources, investigatory and analytical skills in the areasof financial analysis, and understanding of anti-moneylaundering regulations. Further, <strong>Insolvency</strong> Practitionerscan conduct more comprehensive investigations intoregulated entities in roles as examiners, controllers oradministrators by using the powers bestowed uponthem and the resources and expertise available to themto gain access to and conducting analysis of theregulated entity’s books and records and assets. Shouldthese or any other actions determine that a regulatedentity’s future is in serious doubt, either due to theextent of the deficiencies and/or breaches in the law orthe ability of the regulated entity to continue as a goingconcern, then winding up of the entity and theappointment of an <strong>Insolvency</strong> Practitioner to that rolemay be appropriate.Authors:Scott Andersen, Senior AnalystEmail: scott.andersen@krys-global.comTim Le Cornu, DirectorEmail: timothy.lecornu@krys-global.comKRyS <strong>Global</strong>Governors Square, Building 6, 2nd Floor23 Lime Tree Bay AvenuePO Box 31237, Grand Cayman, KY1-1205Cayman IslandsTel: +1 345 947 4700Fax: +1 345 946 6728Email: admin@krys-global.comWebsite: www.krys-global.com48

Bermuda – The Cambridge Gas in offshore restructuringand insolvency: Not fit for all purposesby Martin Ouwehand, Appleby (Bermuda) LimitedIt is very difficult for those practising in the field of cross-border insolvencyand restructuring not to notice the significant moves towards internationalcomity by various jurisdictions around the world. This is to a substantialdegree influenced by the enactment of statutory frameworks forco-operation such as section 426 of the English <strong>Insolvency</strong> Act 1986 or theUNCITRAL Model law on Cross-Border <strong>Insolvency</strong> adopted by the UK andthe US. Despite these statutory routes to co-operation, the use of a court’sinherent jurisdiction has remained important, particularly for offshorejurisdictions such as Bermuda which has no similar statutory basis forrecognising another jurisdiction’s insolvency representatives or restructuringregimes. The courts in offshore jurisdictions, by the very nature of theinternational business in those jurisdictions, are asked very regularly to dealwith cross-border issues including the extent to which they should grantremedies for the benefit of foreign appointed insolvency representatives ormake orders implementing in their own jurisdiction the court approvedrestructuring which has taken place in a foreign jurisdiction.The Supreme Court of Bermuda has embraced thedeveloping law in this respect, for the most partderived from the decision of the Privy Council inCambridge Gas Transportation Corpn v OfficialCommittee of Unsecured Creditors of Navigator Holdingsplc [2007] 1 AC 508 (“Cambridge Gas”). CambridgeGas marked a watershed in the approach of theEnglish-based common law to international comity incross-border insolvency; that is, that under thecommon law there should be a single insolvencyproceeding, be it domestic or foreign, and thattherefore a foreign insolvency representative must beextended recognition and assistance by the court. Thepurpose of recognising and assisting the foreignrepresentative is to permit this to happen without thetrouble of having to commence a parallel domesticinsolvency proceeding.On the facts of Cambridge Gas this meant that aplan implemented under Chapter 11 of the USBankruptcy Code in respect of an Isle of Mancompany could be given effect by a Manx court, atthe request of a New York court, because thecompany and its creditors could have entered into acompromise and arrangement under Manx law whichwould have achieved the same result as that underthe Chapter 11 plan.The controversy arises when it comes to how farthe court can go under its inherent jurisdiction inproviding assistance. It is worth bearing in mind thaton the facts of Cambridge Gas, in reality, there was nodirectly equivalent mechanism for achieving in a ManxScheme of Arrangement what had been achievedunder the Chapter 11 Plan because of the need forthe consent of certain shareholders who would havehad to be treated, and voted as, a separate class andwhose wishes could not have been crammed downby the wishes of creditors. Yet the effect of the court’sorder was to treat the two mechanisms as beingequivalent.The Bermuda Court has in this same vein beenincreasingly willing to apply the principles in CambridgeGas liberally; for example, in Re Founding Partners <strong>Global</strong>Fund Ltd (No2) [2011] SC (Bda) 19 Com, the BermudaCourt expressed the view that its powers underCambridge Gas were wider than applying domesticinsolvency law and could extend to empoweringforeign liquidators (appointed in the Cayman Islands inthat case) “to assert in Bermuda whatever claims areavailable under Caymanian law, provided that (a) theforeign substantive law to be applied is broadly similar tolocal insolvency law, and (b) the specific relief which issought is available under local law.” 1In the context of a restructuring, in In the Matter ofContel Corporation Limited [2011] Bda LR 12, theBermuda court was asked on an ex parte applicationto recognise, in accordance with Cambridge Gas, ascheme of arrangement confirmed by a foreign court.The company concerned was listed on the SingaporeStock Exchange. It was incorporated in Bermuda butno parallel scheme was sought in Bermuda. The courtapproved the scheme relying on the “extremely wide”jurisdiction referred to in Cambridge Gas. The courtappeared to be influenced by the fact that therequisite majority for approval of the scheme would49

have been the same as that for a scheme underBermuda law and that there was an “extraordinarilyhigh level of creditor participation”. The court alsonoted that there appeared to be no indication thatthe absence of a parallel scheme in Bermuda was“a deliberate attempt to avoid any consequences ofBermuda law”. Further, the court took into accountthat the scheme involved a “simple debt for equityswap”, was one often approved by the Bermuda courtin cross-border schemes of arrangement, and thatthere was no question under Bermuda law thatcreditors can agree this type of compromise.Contel has not been considered in any subsequentcases; however, it would be wrong to consider it asauthority for the proposition that the Bermuda courtwill routinely approve schemes of arrangement madein other jurisdictions. Had there been an issue as towhether the creditors would have voted differently ina Bermuda scheme, or that there was some feature ofthe compromise or arrangement which meant it maynot have been approved by the court if it were aBermuda scheme, then there would be a convincingbasis for the court refusing to approve it.For this and other reasons, those seeking torestructure an insolvent debtor incorporated in anoffshore jurisdiction such as Bermuda, or with liabilitiesgoverned by Bermuda law, should not simply assumethat they can dispense with the need for parallelproceedings in that jurisdiction. As a matter of Englishlaw (which would almost certainly be followed by thecourts in Bermuda and similar British territories),whether a contractual obligation is discharged under aforeign bankruptcy law depends on the law governingthat contractual obligation. 2 Similarly, a discharge froma liability in tort would be valid only if it wasdischarged under the law governing the tort. As aconsequence, a Bermudian law governed contract isnot discharged as a result of a discharge in foreigninsolvency proceedings, even though the dischargetook place in that party’s country of domicile.The authority for this principle was laid down in acase in 1890 but does not appear to have beenconsidered by the Bermuda courts. 3 It was recentlyconsidered and upheld in the English case of <strong>Global</strong>Distressed Alpha Fund 1 Ltd Partnership v PT BackrieInvestindo [2011] EWHC 256 (Comm). The case washeard by a High Court judge who regarded himself asbound to follow Gibbs, a Court of Appeal decision.The case concerned a company incorporated inIndonesia which had provided a guarantee governedby English law to which the claimant, <strong>Global</strong>, wasentitled. A debt reorganisation plan in respect of thecompany under Indonesian law was approved bycreditors and confirmed by the Indonesian court.<strong>Global</strong> could not, therefore, enforce its guarantee inIndonesia and so it commenced proceedings inEngland. It argued that, in accordance with theprinciple of Gibbs, the guarantee could only bedischarged under English law and that the Indonesianplan was not effective to do so. The court acceptedthat the Gibbs principle was open to criticism in lightof Cambridge Gas however followed it and held thatthe guarantee had not been discharged. The widerconsequence is that a parallel restructuring processwould have had to be implemented in similarcircumstances in England in order to discharge anEnglish law governed liability.Given its liberal approach to Cambridge Gas, itwould be interesting to see whether the BermudianCourt would be willing to follow Gibbs. However ifthe court regards Gibbs as good law, then it is possiblethat this could affect the exercise of the court’sdiscretion as to the nature of the order givingassistance to a foreign restructuring.Conceptually, the order recognising the Plan inCambridge Gas can at the very least be regarded asserving the practical purpose of recognising a transferin the property of those shares at the place ofincorporation where the shares in the Manx companyare registered. The company in Contel was a Bermudaincorporated company and presumably the ordermust have been directed to a similar aim, that is, torecognise that the creditors bound by the schemehad swapped their debt for equity and therebybecome shareholders. It is not clear from thejudgment in Contel whether the order approving theSingapore scheme in that case was intended to havesome additional effect.No doubt the debts of the company which weregoverned by Singapore law would be discharged bythe approval of the scheme in Singapore. This wouldprevent such creditors proceeding against assets ofthe company in that and any other jurisdiction whichfollows the rule in Gibbs. However, where thegoverning law of the company’s debts is a differentjurisdiction, there may be a question as to whetherthe company’s liabilities were properly discharged.Such creditors may sue in their own courts toenforce their claims against a company despite thescheme of arrangement. It would be a mistake toassume therefore that the order had the same effectfor all purposes as if a parallel scheme had beenimplemented in Bermuda; for example, a creditorfrom the US, with a debt governed by US law, andnot within the jurisdiction of the Singapore court,could conceivably enforce its debt in Bermuda,perhaps by appointing a liquidator over the company.It could conceivably enforce its claim against assetsoutside of Singapore and Bermuda.As Lawrence Collins J (as he then was) said in the50

Navigating offshore op ptions can betricky. Guiding clients,while keepingtheir unique business goals in mind,takes skilled lawyers with an unbiasedperspective and complete knowledge ofj urisdictionalstrengths. Experiencedprofessionals providing tailoreds olutions. Appleby.applebyglobal.comTHE RIGHT PEOPLE. THERIGHTPLACES.THE RIGHTSOLUTIONS.BermudaBritish Virgin IslandssCayman IslandsGuernseyHong KongIsle of ManJerseyLondonMauritiusSeychellesZurichOffshore Legal, Fiduciary& Administration Services

English case of In re Drax Holdings Ltd [2004] 1 WLR1049: “In the case of a creditor’s scheme, an importantaspect of the international effectiveness of a schemeinvolving the alteration of contractual rights may be that itshould be made, not only by the court in the country ofincorporation, but also (as here) by the courts of the countrywhose law governs the contractual obligations. Otherwisedissentient creditors may disregard the scheme and enforcetheir claims against assets (including security for the debt) incountries outside the country of incorporation.”A jurisdiction outside of Bermuda and Singaporemay not necessarily take the Bermuda court’s approvalas having the same effect as if there had been aBermuda scheme; i.e. a discharge of liabilities governedby the company’s place of incorporation. Much of thiscould depend on the analysis under the governing lawas to what can amount to a discharge of such liability.The Bermuda court recognised as much in its decisionin Re Loral Space & Communications Ltd [2007] Bda LR26 where Kawaley J (as he then was) said that thecourt in the place of incorporation had jurisdiction toassist a US court by giving effect to a Chapter 11 Planin general terms but that “this should not be taken assuggesting that it may not be desirable in other cases forschemes of arrangement to be formally implementedunder Bermuda law to either (a) meet the contingencythat certain creditors may not be bound by the US Planor (b) to deal in appropriate detail with unique Bermudalaw issues which cannot appropriately be dealt withunder the Plan.” 4Similarly, when it comes to the question of whethera liquidator ought to be appointed in Bermuda over aBermudian incorporated company, great caution oughtto be exercised in assuming that this can be dispensedin favour of simply an application to the Bermudacourt to recognise a foreign insolvency representativeof the company; for instance, under Bermuda law as inmany other jurisdictions, the fact of incorporation of acompany in Bermuda means that, without a Bermudaliquidation and dissolution of such company, a creditoror shareholder may re-open the affairs of thecompany, long after a foreign liquidation anddissolution of such a company.That aside, the traditional view of most commonlaw-based jurisdictions is that the place ofincorporation of a company governs the entitlementof an office-holder to collect that company’s assets. Itgoes without saying that an order of recognition by aBermuda court will not necessarily have any effectunder the law of a third jurisdiction in which assets ofthe company are located. In jurisdictions which haveenacted the UNCITRAL Model Law, the question ofthe extent of the powers to be afforded torepresentatives appointed in foreign insolvencyproceedings is resolved by reference to the location ofthe insolvent debtor’s Centre of Main Interest (or“COMI”). The US has enacted the Model Law inChapter 15 of the US Bankruptcy Code. UnderArticle 17 of the Model Law, the foreign proceedingmay be recognised as (i) a “foreign main proceeding”if it is pending in the country where the debtor hasits COMI or, alternatively (ii) a “foreign non-mainproceeding” if it is pending in a country where thedebtor just has an “establishment”. There is apresumption that the place of a debtor company’sregistered office (i.e., its place of incorporation) is itsCOMI and this confers certain statutory advantages.This is an important reason to commence insolvencyproceedings in the place of incorporation, even if inparallel with other proceedings.There are indications that this will be rewardedwhere that jurisdiction is an offshore one such asBermuda. For example in the US case of Millennium<strong>Global</strong> Emerging Credit Master Fund (SDNY 11-<strong>13</strong>171,Gropper J, August 26, 2011) the court recognised theBermuda appointed liquidators as being appointed inthe COMI and emphasised the need to ensure thatoffshore representatives generally could have access tothe US judicial system. The court said that there oughtnot to be, in effect, a presumption against recognitionof offshore foreign representatives and that an offshorejurisdiction (in this case, that of Bermuda) should begranted comity by US courts because of itssophisticated, fair and impartial legal system.For all of these reasons, those planning strategy incross-border insolvency or restructuring are welladvised to consider carefully the steps which ought tobe taken in a debtor’s place of incorporation, at leastin jurisdictions such as Bermuda. The decision will bedriven often by the desire for efficiency andunderstandably so. Much will depend upon theparticular circumstances of the debtor, howeverefficiency must be balanced against the other equallykey imperatives of certainty and finality. Indeed, inthe right cases, and if there are well coordinatedparallel proceedings, there will be no need for anysuch trade-off.Appleby is a leading offshore provider of legal servicesand act on a wide range of significant and high-profilecases involving insolvency, commercial litigation, trustsdisputes, funds disputes and insurance usually having amulti-jurisdictional component. Our litigation team isskilled in all types of commercial resolution andadvocacy and is regularly instructed by the leading USand UK law firms, financial institutions, insurancecompanies as well as high net worth individuals. A keypart of our practice relates to insolvencies andrestructuring, be they domestic, international, contentiousor non-contentious.52

Notes:1See paragraph 59 of the Judgment. There is supportfor this approach in the recent English High Courtcase of Schmitt v Deichmann [<strong>2012</strong>] EWHC 62where a German administrator could rely uponEnglish statutory provisions which did not apply tothe foreign jurisdiction and had no direct equivalentin the foreign jurisdiction.2Lawrence Collins (ed.) Dicey, Morris & Collins, TheConflict of Laws (14th edition), Rule 200.3Gibbs & Sons v Societe Industrielle et Commerciale desMetaux (1890) LR 25 QBD 399 (CA).4See paragraph 18 of the report.Author:Martin Ouwehand, Senior AssociateTel: +1 441 298 3591Email: mouwehand@applebyglobal.comAppleby (Bermuda) LimitedCanon’s Court22 Victoria StreetPO Box HM 1179Hamilton, HM EXBermudaTel: +1 441 295 2244Website: www.applebyglobal.com53

Corporate restructuring and insolvency:the Cyprus perspectiveby Criton Tornaritis, Tornaritis Law FirmThis article aims to provide a brief introduction to the Cyprus Law ofrestructuring and insolvency. During the last few years the global economyhas experienced one of the most severe credit crises and economic slumps. Itis at such times that the law of restructuring and insolvency becomes ofsignificant importance and its statutory provisions are thoroughly used and atthe same time scrutinised.The main players in a corporate restructuring orinsolvency case are the shareholders, the directors, thetrade and financial creditors, the employees andgovernment authorities. All the above share conflictinginterests, which combined with the complexity ofcorporate restructuring and insolvency mechanisms andthe economic crisis, make the attempts to handle acorporate restructuring process and bring it to apositive final result extremely difficult and complex.During the process of a corporate restructuring orinsolvency all parties involved seek to secure as muchof their interest as possible. The shareholders struggleto avoid loss of their entire investment or evenassuming further liability; the creditors line up andrequest full recovery of their credit; directors try toavoid being held responsible through their acts for anyloss incurred; and the employees wish for thecompany to retain their employment or at leastcompensate in full as per statutory provisions.The work required by a good corporaterestructuring and insolvency practitioner is to find theway to bring all these conflicting interests in line andpersuade all involved to follow his plan in an effort torestructure or liquidate a company in the mosteffective manner, thus securing as much of theinterests of all involved as possible.Procedures available under CyprusLaw for corporate restructuring andinsolvencyUnder Cyprus Law the following procedures areavailable:• Winding up by the court (compulsory liquidation).• Members’ voluntary liquidation.• Creditors’ voluntary liquidation.• Receivership.• Company arrangements and reconstructions.Winding up by the courtWinding up by the court (compulsory liquidation)according to article 2<strong>13</strong> of the Companies Act Cap.1<strong>13</strong>(hereinafter referred to as ‘the Act’) may be initiated bypetition presented either by the company or by anycreditor or creditors (including any contingent orprospective creditor or winding up creditors),contributory or contributories, or by all or any of theabove parties, together or separately, provided thatspecific provisions of Article 2<strong>13</strong>(1) apply.Such compulsory liquidation may be initiatedunder the Act when, a company takes a decision by aspecial resolution in a general meeting that thecompany should be wound up by the court; where acompany has not started its operations within a yearof its incorporation; where the company’s operationswere postponed for a whole year; in the event ofpublic company not filing its statutory report with theregistrar of companies; when a company fails to callfor a statutory meeting; when the company isincapable to pay off its debts; or when the court is ofthe opinion that it is just and equitable that thecompany be wound up.The provisions of Article 212 of the act as withthe definition of when a company is consideredunable to pay off its debts are:(i) if a creditor, by assignment or otherwise, to whomthe company is indebted in a sum exceeding£500.00 then due has served on the company, byleaving at the registered office of the company, ademand requiring the company to pay the sum sodue and the company has for three weeksthereafter neglected to pay the sum or to secureor compound for it to the reasonable satisfactionof the creditor;(ii) if execution or another process issued on ajudgment decree or order of any court in favourof a creditor of the company is returnedunsatisfied in whole or in part; or(iii) If it is proved to the satisfaction of the court thatthe company is unable to pay its debts, and, indetermining whether a company is unable to payits debts, the court shall take into account thatArticle 214 of the Act provides for the powersof the court on hearing a petition.54

On hearing a winding-up petition the court maydismiss it, or adjourn the hearing conditionally orunconditionally, or make any interim order, or anyother order that it thinks fit. However, the court shallnot refuse to make a winding up order on thegrounds that the assets of the company have beencharged or mortgaged to an amount equal or inexcess of those assets, or that the company has noassets.Where the petition is presented by members ofthe company as contributories on the grounds that itis just and equitable that the company should bewound up, the court shall make a winding up order ifit is of opinion that:(i) the petitioners are entitled to relief either bywinding up the company or by some othermeans; and(ii) in the absence of any other remedy it would bejust and equitable that the company should bewound up.However, the court may decide against the windingup order if it is also of the opinion that some otherremedy is available to the petitioners and that theyare acting unreasonably in seeking to have thecompany wound up instead of pursuing that otherremedy.Where the petition is presented on the ground ofdefault in delivering the statutory report to the registraror in holding the statutory meeting, the court may:(i) instead of making a winding up order, direct thatthe statutory report shall be delivered or that ameeting shall be held; and(ii) order the costs to be paid by any persons who,in the opinion of the court, are responsible forthe default.The Act further provides that at any time after thepresentation of a winding-up petition, and before awinding-up order has been made, the company, or anycreditor or contributory may:(i) where any action or proceeding against thecompany is pending in any District Court or theSupreme Court, apply to the court in which theaction or proceeding is pending for a stay ofproceedings herein; and(ii) where any other action or proceeding is pendingagainst the company, apply to the court havingjurisdiction to wind up the company to restrainfurther proceedings and the court to whichapplication is so made may, as the case may be,stay or restrain the proceedings accordingly onsuch terms as it thinks fit (Art. 215).In a winding up by the court, any disposition of theproperty of the company, including things in action,and any transfer of shares, or alteration in the status ofthe members of the company made after thecommencement of the winding up shall, unless thecourt otherwise orders, be void (Art. 216).Additionally any attachment, sequestration, distressor execution put in force against the estate or effectsof the company after the commencement of thewinding up shall be void to all intents (Art. 217).The winding up of a company by the court shall bedeemed to commence at the time of the presentationof the petition for the winding up except where,before the presentation of a petition for the windingup of a company by the court, a resolution has beenpassed by the company for voluntary winding up. Inthis case, the winding up of the company shall bedeemed to have commenced at the time of thepassing of the resolution, and unless the Court, onproof of fraud or mistake thinks fit otherwise to direct,all proceedings taken in a voluntary winding up shall bedeemed to have been validly taken (Art. 218).On the making of a winding-up-order, a copy ofthe order must be forwarded by the company to theregistrar of companies who shall make a note relatingto the company in his books (Art. 219).When a winding up order has been made or aprovisional liquidator has been appointed, no action orproceeding shall be commenced against the companyexcept by leave of the court and subject to suchterms as the court may impose (Art. 220).An order for winding up a company shall operatein favour of all the creditors and contributories of thecompany as if made on the joint petition of a creditorand a contributory (Art. 221).The role of the official receiver and registrar ofcompanies in the winding up procedure is definedunder sections 222 and 223 of the Act where it isstated that “the term official receiver” means theofficial receiver and registrar of companies andincludes any other person appointed for the purposeby the Council of Ministers.Further, the Act provides that the official receivermay apply to the court and request the appointmentof any person to act as official receiver in a windingup case under the directions of the official receiverand registrar.Where the court has made a winding-up order orappointed a provisional liquidator, there shall, unlessthe court thinks fit to order otherwise and so orders,be made out and submitted to the official receiver astatement of affairs of the company in the prescribedform, verified by affidavit. This should show theparticulars of its assets, debts and liabilities; the names,residences and occupations of its creditors; thesecurities held by them respectively; the dates whenthe securities were respectively given; and such otherinformation as may be prescribed or as the officialreceiver may require.55

The statement of affairs shall be submitted andverified by one or more of the persons who are thedirectors at the relevant date and by the person whois at that date the secretary of the company. Theofficial receiver retains the right to apply to court andseek an order requesting other persons connectedwith the company to submit and verify the statement.The statement shall be submitted within 14 daysfrom the relevant date, or within such extended timeas the official receiver or the court may for specialreasons appoint (Art. 224).As soon as practicable after receipt of thestatement, or in a case where the court orders thatno statement shall be submitted, the official receivershall submit a preliminary report to the courtoutlining:(i) the amount of capital issued, subscribed and paidup, and the estimated amount of assets andliabilities;(ii) if the company has failed, the cause of the failure;and(iii) whether, in his opinion, further inquiry is desirableas to any matter relating to the promotion,formation or failure of the company or theconduct of the business thereof (Art.225).According to the Act, the court may appoint aliquidation or liquidators for the purpose ofconducting the proceeding in winding up a company.A provisional liquidator may be appointed at anytime after the presentation of a winding up petition bythe court, which will have the power to limit andrestrict his powers by the order appointing him (Art.226, 227).The official receiver, by virtue of his office, isappointed as provisional liquidator and shall continueto act as such until he or another person becomesliquidator and is capable of acting as such.The official receiver summons separate meetings ofthe creditors and contributories of the company forthe purpose of determining whether or not anapplication is to be made to the court for appointinga liquidator in the place of the official receiver.Where a person other than the official receiver isappointed liquidator, that person shall not be capableof acting as liquidator until he has notified hisappointment to the registrar of companies and givensecurity in the prescribed manner to the satisfactionof the court. The liquidator shall give the officialreceiver such information and such access to andfacilities for inspecting the books and documents ofthe company and generally such aid as may berequisite for enabling that officer to perform his dutiesunder this law (Art. 229).The powers of the liquidator in a winding up bythe court are described in Art. 233 of the Act Withthe sanction either of the court or of the committeeof inspection to:(i) bring or defend any action or other legalproceeding in the name and on behalf of thecompany;(ii) carry on the business of the company so far asmay be necessary for the beneficial winding upthereof;(iii) appoint an advocate to assist him in theperformance of his duties;(iv) pay any claims of creditors in full;(v) make any compromise or arrangement withcreditors or persons claiming to be creditors orhaving or alleging themselves to have any claim,present or future, certain or contingent,ascertained or sounding only in damages againstthe company, whereby the company may berendered liable; and(vi) compromise all calls and liabilities to calls, debtsand liabilities capable of resulting in debts, and allclaims, present or future, certain or contingent,ascertained or sounding only in damages, subsistingor supposed to subsist between the company anda contributory or alleged contributory or otherdebtor or person apprehending liability to thecompany, and all questions in any way relating toor affecting the assets or the winding up of thecompany, on such terms as may be agreed, andtake any security for the discharge of any such call,debt, liability or claim and give a completedischarge in respect thereof.The liquidator in a winding up by the court shallhave the power to:(i) sell the real and personal property in action of thecompany by public auction or private contract,with power to transfer the whole thereof to anyperson or company or to sell the same in parcels;(ii) do all acts and to execute, in the name and onbehalf of the company, all deeds, receipts andother documents, and for that purpose to use,when necessary the company’s seal;(iii) prove, rank and claim in the bankruptcy, insolvencyor sequestration of any contributory for anybalance against his estate, and to receive dividendsin the bankruptcy, insolvency or sequestration inrespect of that balance, as a separate debt duefrom the bankrupt or insolvent, and ratably withthe other separate creditors;(iv) draw, accept, make and indorse any bill ofexchange or promissory note in the name and onbehalf of the company, with the same effect withrespect to the liability of the company as if the billor note had been drawn, accepted, made orindorsed by or on behalf of the company in thecourse of its business;56

(v raise on the security of the assets of thecompany any money requisite;(vi) take out in his official name letters ofadministration to any deceased contributory, andto do in his official name any other act necessaryfor obtaining payment of any money due from acontributory or his estate which cannot beconveniently done in the name of the company,and in all such cases the money due shall, for thepurpose of enabling the liquidator to take out theletters of administration or recover the money, bedeemed to be due to the liquidator himself;(vii) appoint an agent to do any business which theliquidator is unable to do himself; and(viii) do all such other things as may be necessary forwinding up the affairs of the company anddistributing its assets.The Act provides a liquidator, in the case of awinding up by the court, extensive powers toinvestigating into the affairs of the company, andespecially the conduct of persons involved in thecompany affairs.When affairs of the company have been completelywound up, the court, if the liquidator makes anapplication in that regard, shall make an order that thecompany be dissolved from the date of the order, andthe company shall be dissolved accordingly.A copy of the order shall, within 14 days from thedate thereof, be forwarded by the liquidator to theregistrar of companies who shall make in his books anote of the dissolution of the Company (Art. 260).Voluntary winding upAccording to the Act (Section 261) a company may bewound up voluntarily in the following circumstances:(i) when the period, if any, fixed for the duration ofthe company by the articles expires, or the event,if any, occurs, on the occurrence of which thearticles provide that the company is to bedissolved, and the company in a general meetinghas passed a resolution requiring the company tobe wound up voluntarily;(ii) if the company resolves by special resolution thatthe company be wound up voluntarily; or(iii) if the company resolves by extraordinaryresolution to the effect that it cannot, by reasonof its liabilities, continue its business, and that it isadvisable to wind up.When such a resolution for voluntary winding uphas been passed, then the company shall, within 14days after the passing of the resolution, give notice ofthe resolution by advertisement in the official gazette.The commencement of the voluntary winding up isdeemed to be at the time of the passing of theresolution for voluntary winding up.In the case of a voluntary winding up, the companyshall, from the commencement of the winding up, ceaseto carry on its business, except so far as may berequired for the beneficial winding up thereof, providedthat the corporate state and corporate powers of thecompany shall, not withstanding anything to the contraryin its articles, continue until it is dissolved (Art. 264).Any transfer of shares, not being a transfer madeto or with the sanction of the liquidator, and anyalteration in the status of the members of thecompany, made after the commencement of avoluntary winding up shall be void (Art.265).Where a voluntary winding up is proposed, thecompany directors make a statutory declaration tothe effect that they have made a full inquiry into theaffairs of the company and that to this effect theyhave formed the opinion that the company will beable to pay its debts in full within such period notexceeding 12 months from the commencement ofthe winding up as may be specified in the declaration.The declaration takes full effect for the purposes ofthe Act only if:(i) it is made within five weeks immediatelypreceding the date of the passing of theresolution for winding up the company and isdelivered to the registrar of companies forregistration before that date; and(ii) it embodies a statement of the company’s assetsand liabilities as at the latest practicable datebefore the making of the declaration.Members’ voluntary winding upA members’ voluntary winding up is applied in caseswhere an existing solvent company is no longerrequired by the members as it has fulfilled its purpose.This procedure will facilitate distributing any assetsamong the members and repaying any liabilities thereof.This procedure is used often during groupreorganisations.A company in general meeting shall appoint oneor more liquidators for the purpose of winding up theaffairs and distributing the assets of the company.Upon such appointment all the powers of thedirectors shall cease except so far as the company ingeneral meeting or the liquidator sanctions thecontinuance thereof (Art. 268).In the event that after the commencement of thevoluntary winding up the liquidator is at any time ofthe opinion that the company will not be able to payits debts in full within the period specified in thedeclaration under Article 266, he shall immediately calla creditors meeting and lay before such meeting astatement of the assets and liabilities of the company(Art.271).The liquidator has the obligation to call suchgeneral meeting at the end of each year, and laybefore the meeting an account of his acts and dealings58

and of the conduct of the winding up during thepreceding year (Art.272).As soon as the affairs of the company are fullywound up the liquidator shall make an account of thewinding up, showing how it has been conducted andthe property of the company has been disposed of.The liquidator shall call a general meeting and lay suchaccount before it, giving any explanation thereof.Thereafter, the liquidator sends a copy of theaccount to the registrar of companies and shall alsomake a return of the holding of the meeting and of itsdate. The registrar on receiving the account and thereturn mentioned above shall immediately registerthem and on the expiration of three months from theregistration of the return the company shall bedeemed to be dissolved (Art. 273).Creditors voluntary winding upThis procedure is used to facilitate the distribution of allavailable assets of an insolvent company to its creditorsand thereafter the company ceases to exist bydissolution.According to Article 276 the company shall causea meeting of the creditors to be summoned for theday on which the meeting at which the resolution forvoluntary winding up is to be proposed.The directors for the company shall lay before themeeting a full statement of the position of thecompany’s affairs together with a list of the creditorsand the estimated amount of their claims, and appointone of them to preside at the said meeting.A meeting of the company members is alsoconvened with the purpose of passing the winding upresolution and appointing a liquidator.As soon as the affairs of the company are fullywound up the liquidator shall make up an account ofthe winding up, showing how the winding up has beenconducted and the property of the company has beendisposed of, and thereupon shall call a general meetingof the company and a meeting of the creditors for thepurpose of laying the account before them and givingany explanation thereof (Art. 283).The procedure then followed in the case of amembers’ voluntary liquidation is that of informing theregistrar of companies and registering the decision inthe companies file.ReceivershipAfter a charge over the assets of a company has beenplaced by a creditor, such creditor may appoint areceiver with the purpose of facilitating the sale of thecompany’s assets, subject to the charge and discharge ofdebt out of the proceeds of the sale.As soon as the receiver realises the charged assetand provider account to his appointer and thecompany, he is discharged. The company debtor,however, in contradiction to the winding upprocedures described above, remains in existence.Usually the document (agreement) signed betweenthe company debtor and the creditor creating thecharge includes all powers to the extent thereof andthe degree of supervision of the receiver.Company arrangements and reconstructionsAccording to Article 198 of the Act where acompromise or arrangement is proposed between acompany and its creditors or any class of them, orbetween the company and its members, the court mayon the application of the company, a creditor, amember, or – in the case of a company being woundup – the liquidator, order a meeting of the creditors, orthe members to be summoned in such manner as thecourt directs.If the majority in number represented by threequartersin value of the creditors or memberspresent and voting at the meeting agree to anycompromise or arrangement, such compromise orarrangement shall be binding or all the creditors ormembers (Art. 198).Such order shall have no effect until an office copyof the order has been delivered to the registrar ofcompanies for registration.Such procedure is frequently used to facilitate thefinancial restructuring of the company to effectmergers and reorganisation of group of companies,thus taking advantage of favourable tax treatment ofreorganisation.Upon approval of a reorganisation andrestructuring scheme by the court, the whole processmay be completed within weeks, thus offering aflexible and swift process.ConclusionThe Cyprus Companies Act covering all aspects ofrestructuring and insolvency law in Cyprus is a perfecttranslation of the corresponding UK Law provisionsdating back to the 1950s.In today’s economic circumstances it is more thancertain that many provisions will be challenged andmany issues litigated in the Cyprus court which in itsturn will move the institutions involved to seek andprepare a more modern insolvency legal frameworkassisting the rescue of corporate debtors and helpingenterprises overcome obstacles.Author:Criton Tornaritis, Senior PartnerTornaritis Law Firm16 Stasikratous Street, 6th Floor1065, Nicosia, CyprusTel: +357 (22) 456 056Fax: +357 (22) 664 056Email: office@tornaritislaw.comWebsite: www.tornaritislaw.com59

Brazil – Opportunities for restructuringin family-owned companiesby Osana Mendonça, André Schwartzman and Salvatore Milanese, KPMG BrazilIn Brazil, a large number of profitable enterprises had their inception basedon a business concept which was initially nurtured in a family company. Astime goes by, the one who originally conceived the business transfers thecompany to other family members, or, oftentimes after sudden success, thecompanies are sold to investment groups.On the occasions in which the founding owner hasnot prepared a successor, or when the company inquestion has not been sold to new owners whoinstituted professional management, there may be aneed for restructuring the business.The restructuring of a family-owned companyoften has to deal with problems related to control notbeing clearly defined, on those occasions in whichthere was no preparation of a successor to thefounding partner. This situation could lead to a mix-upbetween the legal entity’s equity and the individuals’equity. These aspects can seriously impact theassertiveness and transparency of companyinformation.Currently, a significant number of family companiesin a stress or distress situation is noticeable. In Brazil,out of the last 42 filings for judicial reorganisationwhich involved a significant debt amount, 45% wererelated to family companies (see Figure 1).Figure 1: Judicial reorganisation comparison – family vs.non-family companyNon-familycompanies55%Source: KPMG BrazilFamilycompanies45%Those are companies for which the founding groupdeveloped the brand, established the operationlocations, but have neither prepared the successionplan nor professionalised the management. Veryoften, the business started small and was notprepared for growth. It operated as a small bakery,which grew into a food factory, but without planning,control and overall management.Therefore, despite the enterprise’s good prospects,management absence or failure leads it to a stressedor distressed situation.In distressed situations it is common for thecurrent managers and shareholders to understandthat the only solution might be the sale of thecompany, in part or in its totality, to an investor whoinjects capital. This solution may prove to beexcellent, or dreadful, for both parties. This will alwaysdepend on the way in which each of the parties willconduct their analyses.A foreign investor needs to be very well advisedby law offices and consultancies which have alreadyhad experience in similar situations within the samecountry. The right services, both legal and financial,will ensure that the M&A process occurs in good faithand under the best possible legal protection.Performing a careful due diligence may bring forthinformation which is otherwise not transparent, thusfacilitating proper decision-making on the part of theinvestor.Each country has its own characteristics,particularity in the legal field, but also has its owncultural traits which are normally directly reflected inthe manner in which the owners interact during thecourse of the M&A negotiations.In the case of stressed and distressed companies,seeking the help of advisors specialised in M&A avoidsthe need for solving serious future problems, such assuccession processes involving tax, labour and otherdebts.In Brazil, companies in situations of stress ordistress, when timely advised, go through arestructuring process which may end in a judicialreorganisation process, due to the amount of debtsand other factors. In this in-court proceeding, thenew owner may find protection against tax and labourcontingencies. Yet, for the aforementioned protection60

to be valid, the negotiations and the takeover of thebusiness should take place in an orderly manner andunder the authorisation of the legal proceeding.Otherwise, the new investor may become jointlyliable for tax, labour and other contingencies he or shemight be unaware of. Additionally in the case of familyownedcompanies, usually there are strong personalloyalty ties between the employees and the originalshareholders. Such ties, even when those shareholdersare removed, cause the company to still operateunder former orders, procedures and culture.On the occasions in which the financial andoperational restructuring in a distressed or stressedcompany does not occur in an orderly manner, anddoes not rely on professionals specialised in this typeof environment, the cultural change is less likely.For instance, a Swiss company acquired a familycompany in the car parts sector in Brazil. The familymanagement team stepped down, and just onemember of it remained in the board of directors. Thenew professional management team took over thebusiness management and started to manage the dayto-daybusiness. Two years after the acquisition, it wasidentified that the company paid an excessive amountin the purchase of tooling, and that there was thesuspicion of embezzlement. It was found that therewere slush funds in the company, and that, for morethan 25 years, one of the company’s professionals hadbeen responsible for the slush funds, which used to berecorded in a notebook and reported to the CEO ofthe company, at the time it was a family company. Thecash was used in payments which ensured receipt ofnew goods for manufacturing.The acquisition of a family company also involvesthe negotiation with the various existing ‘manors’ thatexist within the typical family-owned company. At thetime of a crisis, the ‘manors’ may gather around theidea of selling the share control, or of a sellout.Therefore, the investor could enter the enterprise bymeans of the acquisition of a portion of the debt, orby means of the acquisition of equity which wouldentitle him or her to share control.However, when a new investor takes over themanagement of the business and begins areorganisation process of the business using leadingpractices and financial and operational restructuring,the family groups realise that the family business wasvery attractive. At this time what happens is that some‘manors’ give up the sale option of the share control.The following thought pops up: “the family’s goodbusiness is priceless”. The crisis arising from theexisting conflicts at this stage does really impact thenegotiations and the conduction of the M&A process:• succession process vs. solving the existing financialproblems;• keeping the ownership vs. not run the risk of losingeverything in a possible bankruptcy;• hiring of family members vs. beginning a newprofessional career.Starting to hold equity interest in a family company,assuming the company’s management, requiresadvisory services from specialised firms, due to thearray of conflicts which will arise, as outlined inFigure 2.Figure 2: Family management vs. professionalmanagementFamily managementUnconditional acceptanceSocialistCooperativeEmotionalEqualitySource: KPMG BrazilProfessional managementConditional acceptanceCapitalistCompetitiveRational/logicalMeritGood conduction in the resolution of conflictsresults in the continuity of the company as a goingconcern, as well as in the contract entered intobetween the parties resulting from the M&A process.Therefore, the continuity of the company as a goingconcern has to be the main goal, in common withboth parties (see Figure 3).Figure 3: Continuity of the company as a common goalFamilyconflicts andownershipSource: KPMG BrazilFamilyconflicts andmanagementCONTINUITYConflictsmanagementand ownershipSome examples of conflicts may be:a) showing that a very trusted old employee may bereplaced by a skilled professional, who worksefficiently;b) showing that the phasing-out of an unprofitableproduct, which has always been manufactured bythe company, will result in gains;c) keeping or not keeping all the production units,and/or the company’s real estate properties;62

d) performing the segregation between the company’sreal estate/properties and the ones which belongjust to the family; ande) keeping or not keeping employees who are familymembers, and payment of salary to the latter.With few exceptions, cultural matters, equity mixupand a succession process lacking preparation andprofessional management are the major points whichprejudice management in a family company. On theoccasions in which the succession process was notprepared, a dispute for power, which in a familyownedcompany is conducted in a passionate manner,arises, not taking into consideration the win-win orwin-lose outcome. What is noticeable is that the onesinvolved in the fight for power aim at the opponent’sloss, not reflecting, in a rational manner, whether thissearch will result in serious problems to the company,and, therefore, their own equity interest in thebusiness company.The good management of these matters whichnormally occurs during the course of the company’srestructuring, when performed with focus andknowledge, will result in a strengthened company,which may enjoy sustainable growth in the future.What is the reason for this statement? The reason isthat, if the company has survived all conflicts which ledto the stress and distress, once it recovers from theaforementioned conflicts it will have a solid base togrow!Authors:Osana Mendonça, DirectorTransactions & <strong>Restructuring</strong>Tel: +55 (11) 3245 8338Email: omendonca@kpmg.com.brAndré Schwartzman, Partner<strong>Restructuring</strong> ServicesTel: +55 (11) 3245 8258Email: aschwartzman@kpmg.com.brSalvatore Milanese, Partner<strong>Restructuring</strong> ServicesTel: +55 (11) 3245 8312Email: smilanese@kpmg.com.brKPMG BrazilAv. Nove de Julho, 5109 - 7º Andar01407-905 - São Paulo, SP, BrazilFax: +55 (11) 3245 8310Website: www.kpmg.com.br63

Brazilian insolvency systemseeks maturityby Bruno Gutierres, Ramos, Zuanon e Manassero AdvogadosBy the year 2005, the bankruptcy system in Brazil, established by Decree-LawNo. 7661 of 1945, still remained in force. Inspired by an outdated concept ofenterprise, the bankruptcy legislation that prevailed in Brazil for 60 years waslong ago obsolete and incompatible with economic order, particularly goingagainst instruments and mechanisms that could allow the reorganisation ofcompanies facing difficulty and also the preservation of economic activity inthe bankruptcy process.To better illustrate just how far behind Brazilianlegislation was on an international level in 2005, theUnited States edited its first specific laws onreorganisation in the early 1930s, later groupedsystematically in the Chandler Act, enacted in 1938;France has had in place legislation aimed at therehabilitation of companies in difficulty since 1985, LawNo. 85-98; Germany and Portugal edited newbankruptcy laws to also contain mechanisms for judicialrecovery of business in crisis in the first half of the1990s, respectively in 1994 and 1993; and neighbouringArgentina modernised its bankruptcy laws to allow theraising of firms in difficulty with Law No. 24,552 of1995, a decade in advance of Brazil.So many years of waiting in frustration with anextremely inefficient bankruptcy system hypedexpectations about the new Judicial Recovery andBankruptcy Act, No. 11101 of 2005 (LRF). Despite therelevant number of critics on several aspects of thenew law, the consensus has always been that LRFrepresented an enormous improvement over theprevious bankruptcy system and that the importanttask of correcting inaccuracies and filling gaps in theapplication on concrete cases would be up toprofessionals, lawyers, judges and financial advisors,among others.The practical application for LRF soon arrived. Onlythree years after its entry into force, by virtue of theglobal financial crisis triggered in 2008, there began agreat movement of applications for bankruptcy inBrazil. Many of these applications were of expressivevalues, especially from exporters of agriculturalcommodities highly indebted in foreign currency as aresult of structured transactions with domestic andforeign financial agents.What was observed in this first major test of theLRF, however, was a dialectical movement, with thepredominance of inexperienced professionals trying tomake the new system of insolvency the antithesis ofthe previous inefficient system. That is, if earlier therecovery of the a company in difficulty through thejudicial system was practically impossible, after theentry into force of the new legislation adisproportionate and excessive concern prevailedamong the operators of the new law to avoidbreaking a company into crisis by the approval ofrecovery plans at any cost.The relevant principle that a non-viable enterpriseshould not be kept in operation but go to liquidationwas forgotten. The operators of the new law lost sightof the view that an efficient liquidation of a non-viableenterprise is the best alternative to avoid a generationof even greater losses, not only because liquidationprovides a better return to creditors and societywhen the bad player is removed from the market, butalso because the maintenance of economic activitybenefits workers, business partners and consumers.In an expressive number of cases, under thejustification of avoiding the liquidation of a company incrisis, the judiciary allowed, for example, the early saleof a debtor’s property given as collateral forimmediate use as working capital, in clear violation ofthe rights of creditors and without any concern forthe viability of the effective reorganisation of theenterprise in crisis.Many other decisions contrary to the law and tothe principles of the insolvency and credit rightssystem were made to support the recurring argumentthat liquidation should be avoided at any cost,sometimes causing imbalance in the complexrelationship of interest that permeate the bankruptcyprocedure established by the LRF. Because they feltconfident that bankruptcy would be avoided at anycost, the business controllers of companies in crisiswere refractory to the reorganisation proposalswhere they would lose control of the company, andwere even against the adoption of more stringentcorporate governance rules, obviously damaging theefficiency of the reorganisation process.It is fair to recognise that, in a few cases, creditors64

that are well advised and represented by specialisedlaw firms have succeeded in the enforcement of creditrights and collaterals against companies that hadunacceptable judicial recovery plans. However, ingeneral, we can say that the outcome of the judicialrecovery processes in Brazil could be much better andneeds to evolve.Consequently, just two years after the approval of alarge number of recovery plans since the globaleconomic crisis started in 2008, it is already clear thatmost of the judicially reorganised enterprises areunable to overcome their difficult situation. Even afterthe big haircuts, debt rescheduling and collateral lossesimposed to the creditors, they preserved theirinefficiencies, lost credibility and seriously threaten tofail, thus multiplying the losses to all stakeholders.However, although so far the outcome of theimplementation of the LRF, in general, has beendisappointing, a few recent decisions andinterpretations, especially from the Court of Appealsof the State of São Paulo, show a trend ofdevelopment and maturation of the Judiciary.On March 14, 2011, the chamber reserved tobankruptcy and judicial recovery of the Court ofAppeals of the State of São Paulo edited its first bookof precedents which, although without binding power,serve as strong guidance for the implementation ofLRF within São Paulo State. Among the precedentsedited, there are two that are noteworthy: number 61,which provides, “In bankruptcy, the removal orreplacement of warranty will only be permitted uponexpress approval of the holder”; and number 62,which says, “In Recovery court, it is inadmissible torelease latches with a pledge of bank receivables and,therefore, the amount received in payment guaranteesshould remain in an escrow account during thesuspension period provided for in § 4 of Art. 6 ofthat Act.”On February 28, <strong>2012</strong>, the same specialisedchamber of the Court of Appeals of the State of SãoPaulo, in the judgment of the interlocutory appealnumber 0<strong>13</strong>6362-29.2011.8.26.0000, annulled thedetermination of the general meeting of creditorsfrom a judicial recovery process who had approved aplan of reorganisation, due to improper predictions,such as, lengthening of the period for repaying thedebt to 18 years with a three-year grace period,unequal treatment among creditors of the same class,and also because the company showed clear signs ofnon-viability.Hopefully precedents and decisions like these willget notoriety and will become increasingly frequent,especially if confirmed by the Superior Court ofJustice (STJ), responsible for the final interpretation offederal law, settling controversial issues between theState Courts of Justice and Federal Regional Courts,and ensuring the application of federal law.Although it is understandable that after 60 years ofwaiting for legislation that allows the effectiverecovery of viable enterprises initially there would besome exaggeration and inaccuracy in the applicationof new concepts, we believe it is already andsufficiently clear that the price paid for thisdisproportionate response to the previous model isvery high.A safe and efficient insolvency system isindispensable for the stability of the trade and financialsystem of a country, it encourages investment and thefinancing of productive activity, thus generatingsustainable economic growth, and encouragingresponsible corporate behaviour. We believe that theSuperior Court of Justice is aware of this reality andwill fulfill its role in the final interpretation of the LRF,which will provide relevant progress in the Brazilianbankruptcy system.Author:Bruno Gutierres, PartnerRamos, Zuanon e Manassero AdvogadosRua São Tomé, 86 - cj. 111São Paulo - SP - 04551-080BrazilTel: +55 (11) 3055 2008Fax: +55 (11) 3848 9449Website: www.rzmadvogados.com.br65

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Strategies for use of bankruptcylaw by creditors in Chinaby Fanghua Duan, Zhongzi Law OfficeThe Enterprise Bankruptcy Law of the People's Republic of China (EBL)enacted on June 1, 2007, introduced a comprehensive bankruptcy regime toprotect lawful rights and interests of creditors when the debtor falls intofinancial crisis. As the first judicial interpretation of EBL, Provisions (I) of theSupreme People's Court on Several Issues concerning the Application of EBLwhich came into effect on September 26, 2011, aims at enhancing theapplication of the EBL as well as providing creditors with a more effective andefficient mechanism to commence bankruptcy proceedings. This articlefocuses on practical strategies for creditors to realise their rights andinterests under EBL and newly-adopted Provisions (I) of SPC in China.To employ bankruptcy avoidancelaw in a bankruptcy proceedingOverview of bankruptcy avoidance law underthe EBLBy following general modern bankruptcy laws, the EBLhas established a bankruptcy avoidance mechanismwhich covers three kinds of avoidable pre-bankruptcytransactions: avoidable fraudulent transfers andobligations, invalid fraudulent transfers and obligations,and preferences.• Avoidable fraudulent transfers and obligations.A bankruptcy trustee is entitled to requestthe court to avoid the following actions takenwithin one year before the court accepts thebankruptcy petition in respect of the debtor’sproperty: (1) to transfer the property of thedebtor without consideration; (2) to conducttransactions at a obviously unreasonable price;(3) to provide property guaranty to unsecureddebts; (4) to pay off debts undue; and (5) toabandon claims.• Invalid fraudulent transfers and obligations.If a debtor hinders or transfer its property withactual intent to defraud any entity to which thedebtor was or became indebted, or if a debtorinitiatively fabricates debts or passivelyacknowledges unreal debts, all of the debtor’sforesaid actions will be invalid, and the bankruptcytrustee may recover the property thereof obtainedregardless when such transfer or obligation isincurred.• Preferences. A bankruptcy trustee is entitled toavoid any repayment made while the debtor wasinsolvent to a creditor within six months beforethe court accepts the bankruptcy petition, exceptthat such specific repayment benefited theproperty of the debtor.Strategies for use of bankruptcy avoidance lawunder the EBLOn the one hand, a creditor may bear the risk thatthe property it obtained from the debtor may berecovered by the bankruptcy trustee after the debtorenters into a bankruptcy proceeding; on the otherhand, a creditor is entitled to request the bankruptcytrustee to recover the property from other creditorswhich involves avoidable or invalid fraudulent transfersand obligations, or preferences.Who can file? According to the EBL, only abankruptcy trustee is able to file bankruptcy avoidancelitigations. Creditors are not allowed to file such a suit.If a bankruptcy trustee fails to perform his duties tofile such a suit, creditors are entitled to request thecourt to change the bankruptcy trustee thereof.What court to file with? The bankruptcy trusteeshould file the bankruptcy avoidance litigation with thecourt which accepts the bankruptcy petition. Chinahas a four-tier court system: trial People’s Court ofeach county, Intermediate People’s Court of eachregion(including several counties), High People’s Courtof each province, and Supreme People’s Court ofChina. A bankruptcy petition shall be filed with andaccepted by the trial or the Intermediate People’sCourt where the debtor is domiciled.When should the filing occur? As for avoidablefraudulent transfers and obligations, and preferences, atwo-year statute of limitation applies. A bankruptcytrustee must file a bankruptcy avoidance litigationwithin two years after the termination date of thebankruptcy proceeding. According to the EBL, incase of no assets to distribute, or upon conclusionof assets distribution, the bankruptcy trustee shallreport to the court and request the court toterminate the procedures for bankruptcy. The courtshall make a decision on whether to conclude the67

procedure within 15 days of reception of suchrequest.To maximise creditors’ interests in acorporate reorganisationOverview of the reorganisation mechanismunder the EBLUnder the EBL, aside from that a debtor may file aninvoluntary petition for reorganisation, a creditor or thedebtor’s shareholder(s) whose capital contributionscomprise more than one-tenth of the registered capitalof the debtor are also eligible to commence aninvoluntary reorganisation proceeding. The courtdesignates a trustee for each case when deciding toaccept the case. The trustee would take over thedebtor, examine all claims filed by creditors and conductall other duties under the law. The debtor or trusteeshould provide a reorganisation plan within six monthsfrom the date on which the court makes an order toaccept the petition.For the purpose of enabling a vote on thereorganisation plan, all claims would be classified intofour classes: the claims that enjoy a security interest onthe particular property; the claims of salaries, medicaltreatment, injury or disability allowance and pensions;basic old age insurance and medical insurance owedby the debtor to its employees; and tax claims, andother unsecured claims.If the plan involves adjustment to the rights orinterests of the stockholders, a class of stockholdersshould also be established. The court would convene acreditors’ meeting within 30 days of receipt of theplan to take a vote on it. If more than one-half of thecreditors in the same voting class, who hold at leasttwo-thirds in the total amount of claims of the saidclass, present at the meeting and accept the plan, sucha class would be considered to have accepted theplan. When each class accepts the plan, the plan wouldbe confirmed by the court. When one or more classesfail to accept the plan, the debtor or the trustee mayapproach and negotiate with these class(es). The classmay vote again to accept the plan based on thenegotiated results, provided such results do not impairany other classes’ interests. If the class still fails toaccept the plan after negotiation, the court wouldconfirm the plan provided it satisfies all relevantrequirements. 1 The confirmed reorganisation planbinds the debtor, all creditors, as well as, allstockholders. All debts should be discharged as longas they are paid off under the confirmed plan.Strategies to maximise creditors’ interests in acorporate reorganisationTo file for reorganisation instead of bankruptcyliquidation against the debtor. According to the EBL,both a creditor and a debtor may directly file forreorganisation. Once a creditor files for bankruptcyliquidation against a debtor, the creditor will beprohibited from applying to transfer such liquidationproceeding into reorganisation, while the debtor or itsshareholder(s) whose capital contributions comprisemore than one-tenth of the registered capital of thedebtor may, after the court accepts such liquidationapplication and before it declares the debtor bankrupt,apply to transfer liquidation into reorganisation.Therefore, a creditor may choose to directly file forreorganisation against the debtor once it deems itreasonably feasible for the debtor to succeed inreorganisation.To sit on the Creditors’ Committee. According to theEBL, the Creditors’ Meeting may decide to establishthe Creditors’ Committee. Members of the Creditors’Committee shall be recognised by the court with awritten decision. The Committee excises the functionsand powers to supervise management and dispositionof the debtor’s property by the bankruptcy trustee orthe debtor itself, to supervise the distribution ofbankruptcy property; to propose to convene theCreditors’ Meeting to make decisions and take a voteon significant issues concerning creditors’ interests andrights, and to negotiate with the debtor, the equityinterests holders of the debtor, and the investors whowill become the new equity interest holders of thereorganised corporate, to set down the repaymentratio in the reorganisation plan. To sum up, theCreditors’ Committee plays a significant role in acorporate reorganisation.A creditor will have more control on protecting itsown rights once it becomes the member or theChairman of the Committee. However, under the EBL,all expenses incurred in the performance of the dutiesof the Creditors’ Committee shall be born byCommittee members themselves rather than beingincluded into administrative expenses. This mayintensify the incentive for creditors to free ride.To decide a debtor’s going-concern value by means ofcompeting bids. Under the EBL, once the courtaccepts the reorganisation petition, a trustee shouldbe assigned concurrently to the case to take over thedebtor. After the confirmation of the plan, the newequity owners pay the price set in the plan and takeover the debtor from the trustee. The reorganiseddebtor thereof becomes a new entity. The price whichthe new owners have paid is the realised value of theinsolvent debtor and would be used to pay off allcreditors according to the statutory priority order.Who and how to decide such a price? How cancreditors bargain for a higher price, consequently ahigher repayment ratio? Under the EBL, for thepurpose to cram down a plan, the “best interests ofcreditors test” must be satisfied, which means all68

unsecured creditors should be given no less than theywould receive under a liquidation scenario. Suchhypothetical liquidation only calls for appraising theliquidation value, instead of the going concern value ofthe debtor. Since some assets can have value onlywhen the company remains in operation, valuingassets under the liquidation scenario tends to end upin a substantially lower amount than under ongoingbusiness circumstances. Therefore, the threshold tosatisfy the “best interests of creditors test” would beconsequently compelled to be generally low. Since theEBL neither adopts the “absolute priority rule” norprovides creditors with the authority to file analternative plan, creditors are not equipped with apowerful leverage to bargain for their payment.Fortunately, both the court and the bankruptcytrustee prefer exposing an insolvent debtor to amarket to determine its value. To hold a competingbid has been widely used in those successfulreorganisation cases since 2007. Creditors mayrequest the bankruptcy trustee to choose the bidderwho pays the highest price as the new owner ofthe reorganised debtor, unless the thin-market effectholds back the bid.To file bankruptcy petition against adebtor failing to pay the debtInsufficiencies of bankruptcy filing system underthe EBLAn efficient and effective filing system is vital forcreditors to strategically make use of bankruptcy laws.However, the EBL contemplates an “acceptance” of thebankruptcy petition in every case including both thedebtor’s voluntary petition and the creditor’sinvoluntary petition. Such acceptance generally occurssubjecting to the general criteria, equitable insolvency(generally not paying debts when they come due) andbankruptcy insolvency. Apparently, as for a voluntarypetition, the debtor is able to provide financialdocuments as evidence that the debtor meets thecriteria. Generally a creditor has no access to itsdebtor’s financial information. Since the EBL fails toilluminate a different burden of proof for an involuntarypetition, a creditor will never be certain that itsapplication against the debtor will result in the court’s“acceptance”. Thus, a creditor’s ability to threaten abankruptcy filing or to use involuntary bankruptcy in astrategic way is undoubtedly restricted. After Provisions(I) of SPC, however, involuntary bankruptcy petitionwould never be the same.Involuntary bankruptcy filing under Provisions(I) of SPCWho can file? A creditor holding an unpaid due claimagainst the debtor. There are no limitations on thevalue of such a claim.What is the burden of proof for a creditor to file?According to Provisions (I) of SPC, 2 for the purpose ofcommencing an involuntary bankruptcy proceeding, acreditor only needs to meet a burden of proof of allthe following: (1) the debt relationship has been legallyestablished; (2) the time limit for repayment of the debthas expired; and (3) the debtor has not fully repaid thedebt. The creditor is not required to provide the courtwith any information about the debtor’s financialsituation or the reason of the debtor’s failure to repay.Will the court accept or reject a creditor’sapplication? After receiving a creditor’s bankruptcyapplication, the court should notify the debtor withinseven days. Where the debtor fails to raise anobjection to the creditor’s application within thestatutory time limit or the objection raised by thedebtor is incorrect, the court shall decide to acceptthe bankruptcy application according to law. Thefollowing objections may be deemed correct by thecourt: (1) the liability is contingent; (2) there is a bonafide dispute as to liability or amount, or the time limitfor repayment; (3) the debtor has fully repaid thedebt. Therefore, when facing with an involuntarybankruptcy petition by a judgment creditor, a debtorwill be forced either to pay off the debt or enter intothe bankruptcy proceeding.Notes:1Enterprises Bankruptcy Law, Art. 87.2Provisions (I) of SPC, Art.2.Author:Fanghua Duan, Attorney at law, PartnerZhongzi Law Office6th Floor, New Era BuildingPingAnLi West Avenue 26Xicheng DistrictBeijing100034ChinaTel: +86 10 66256417Fax: +86 10 66091616Email: duanfanghua@zhongzi.com.cnWebsite: www.zhongzi.com.cn70

New Danish insolvency regulation has not been adapted by themarket. <strong>Restructuring</strong> is still based on out-of-court restructuringsby Jens Boëtius Andersen, Deloitte <strong>Restructuring</strong> ServicesOn April 1, 2011 changes to the Danish insolvency regulation becameeffective. The intention of the new rules was to reduce the number ofbankruptcies and increase the number of restructurings. Now almost a yearlater a preliminary status of the new rules can be made. There is no evidencethat the rules have been a success with respect to reducing the number ofbankruptcies and furthermore the rules have only been applied to a verylimited extent.This article includes an overview of the new rules and a discussion of howrestructurings are handled in Denmark. Furthermore the article includes acurrent overview of the economic climate in Denmark and how this mayimpact the need for restructurings throughout the coming years.At the brink of <strong>2012</strong> it is my view that we can expect the coming year tobecome busy with respect to restructuring of distressed Danish businesses.New Danish insolvency regulationOn April 1, 2011 changes to the Danish insolvencyregulation became effective. The intention of the newrules was to create a modern in-court instrument toreduce the number of bankruptcies and increase thenumber of restructurings.Now a year later a preliminary status of the newrules can be made: There is no evidence that the ruleshave been a success with respect to reducing thenumber of bankruptcies and, furthermore, the schemeunder the new rules has only been applied in about200 cases.The new regulation in shortThe new regulation has invented a new legislativeconcept/scheme: restructuring (in Danish“Rekonstruktion”). Along with the invention ofrestructuring, the former rules relating to suspension ofpayments and compulsory settlement have beenremoved since they form the basis of the restructuring.A restructuring under Danish rules must containeither:• a compulsory settlement;• a sale of the business; or• a combination of the above.The restructuring has to be court approved. If it isnot possible to approve a restructuring, or therestructuring ends for other reasons, the entity willautomatically be transferred into bankruptcy by orderof the court. This is of course exempt in the very rareinstances in which the entity becomes solvent duringthe process.Below I have included an overview of certainissues related to the new restructuring rules:• Filing of restructuring• The restructuring team• The restructuring process and timing• M&A issues• Floating charge and restructuring• Change of management• Commercial contractsFiling of restructuring<strong>Restructuring</strong> can be filed by the debtor and, as a newthing in Danish legislation, creditors can also file forrestructuring.The fact that creditors can now file forrestructuring underlines the ambition of giving thecreditors improved and increased influence in therestructuring process.Filing of restructuring starts the process and setsout a reference date, which is an important date withrespect to any later claw-back actions.When filing it is a demand that the filing includes aproposal of the restructuring team, in which theproposed team members have declared theirwillingness to undertake the responsibilities and theirindependence of the debtor.The restructuring teamThe restructuring team is mandatorily defined asincluding one or more restructurers (in Danish“Rekonstruktør”) and one financial advisor/trustee (inDanish “Regnskabskyndig tillidsmand”). The restructureris often a lawyer and the financial advisor/trustee isoften an accountant.The restructuring team is proposed in the filingand is formally appointed by the court.71

Figure 1: New restructuring processFilingCreditorsmeeting incourtCreditors voteor decision onextension ofrestructuringDay 1 Week 1Filing + 4weeksFiling + 3monthsCreditorsmeeting +6 months+2months+2monthsCreditorinformationCreditorinformationApproval orrejection ofrestructuringproposalThe task of the restructurer is to investigateoptions for restructuring and/or sale of the distressedbusiness together with the debtor/management of thebusiness.The task of the financial advisor/trustee is to assistthe debtor and the restructurer with accountingexpertise in the restructuring process. This, amongothers, includes valuation of pledged and unpledgedassets.The restructuring process and timingWhen lawmakers designed the new scheme, the overallintentions were to increase creditor influence andincrease the speed associated with in-courtrestructuring proceedings since the old system wascriticised for being too slow and inefficient and gaveopportunities to delay hopeless cases.This has led to a restructuring process asillustrated in Figure 1.• At the time of filing – the restructurer and thefinancial advisor/trustee are appointed by the court.• Immediately after filing – any pledgees under thefloating charge system must be notified that thecompany went into restructuring.• During week one – all known creditors need to beinformed of the restructuring.• No later than four weeks after filing – a meeting isto be held in court during which the creditorsdiscuss and either approve or reject a restructuringplan presented by the restructurer.(i) At least one week before the creditors meetingthe initial restructuring plan must be sent to thecreditors. If needed the restructuring plan can bechanged during the meeting in order to obtaincreditor approval.• Three months after filing – the restructurer has toprovide information on progress of the process tothe creditors.• At least six months after the creditors meeting – ameeting is to be held in court during which therestructurer is to present a final restructuringproposal. The creditors have to vote and eitherapprove or reject the proposal.(i) If the proposal is approved, the companyreceives a court sanctioned restructuring.(ii) If the proposal is rejected, the company goesinto bankruptcy.• The vote on the final restructuring proposal can beextended two times by two months each.Extension is subject to creditor approval.• The process can be stopped at all times, such as:(i) If the creditors do not approve the initialrestructuring plan presented on the creditorsmeeting after four weeks, the restructuring will endand the company will go into bankruptcy.(ii) If the restructurer at any point does not believethat the restructuring can become successful, therestructurer is obliged to ask the court to transferthe company into bankruptcy.M&A issuesUnder the new regulation the restructurer is theperson responsible for a sales process underrestructuring. This of course means that the restructureris given significant power and a responsibility to try tofind a potential buyer during the process.Completion of an M&A process must end up in afully negotiated agreement with the buyer(s). Theagreement must be unconditional for the buyer andconditional for the seller as the sale of the business or72

First Aid.We provide investigation, restructuring and turnaroundadvice to underperforming and financially distressedbusinesses. We help management to regain control, managecrisis, maximise return to creditors and limit exposure to risk.Contacts: Claus Hansen (Tel +45 40 15 08 67. Email clhansen@deloitte.dk)and Jens Boëtius Andersen (Tel +45 20 82 04 33. Email jensandersen@deloitte.dk)Weidekampsgade 6, DK-2300 Copenhagen S, Tel. +45 36 10 20 30Member of Deloitte Touche Tohmatsu

a part of it under the new regulation is regarded as arestructuring proposal that a majority of the creditorsneed to accept during a vote. After acceptance fromthe creditors the transaction is still subject toverification by the court.The regulation has set out a few rules relatedto selling a business or part of it when the companyis in restructuring. This among others includes thefact that a sale must be approved by the creditorsby vote. As a basis for such a vote the restructureris entitled to ensure that creditors are informed ofthe following:• the sales price;• an overview of assets, liabilities and mutuallybinding agreements included in the transaction;• the identity of the buyer.The rules do not include any restrictions orguidance on how the sales process must be designedand carried out.The restructurer of course has to find a balancebetween getting the highest price possible andensuring that the transaction will actually becompleted within the timeframe accepted.Floating charge and restructuringIn order to better understand the context of the newrestructuring rules, the Danish rules related to floatingcharge should be taken into consideration.Floating charge was introduced to Danish law in2005 in order to establish new means for businessesto finance growth. The rules have been popular andbanks have been very efficient in applying the tool forimproving their securities. Floating charge can includethe value of inventories, receivables from customers,equipment, certain vehicles, goodwill and certain otherspecified assets.The downside of the floating charge instrument isthat in the event of insolvency the amount of freeassets available for restructuring efforts is often quitelimited and the pledgee has a high degree of controlover the situation.In the event of insolvency the pledgee is liable ofa security of DKr50,000 (equals €6,700) to thereceivership.It is obvious that the interests of the lendersand the borrowers are not necessarily equal andDanish law does not include any rules or dutiesrelated to lenders-liability principles. This combinedwith the lack of free assets often prevents efficientrestructuring processes (in court as well as outof court).Change of managementThe new rules include the opportunity of changingmanagement, if management does not cooperateloyally or jeopardise the creditors’ rights during theprocess.Change of management can be forced if creditorswho represent at least 25% of the registered debtrequest to the court that the restructurer should takeover the management of the business. Change ofmanagement has to be decided by the court.Commercial contractsDistressed companies often explore that businesscritical commercial contracts are terminated by thecontract partners due to default in the form ofdelayed payment by the distressed company. Underthe new rules it has become possible for the entity, if itis in restructuring, to continue such terminatedagreements again.It is further included in the new rules that contractpartners are not able to terminate an agreementmerely due to the fact that the company goes intorestructuring. However the contract partners can askthe company in restructuring if they wish to enterinto the agreement. If the distressed company entersinto the agreement monetary claims following theagreement become privileged for the time after thereference date.Furthermore it is not subject to approval from thecontract partner if a business contract included in abusiness transfer agreement is part of a courtsanctioned restructuring.The above items have been included in Danish lawin order to support the ambition of saving morebusinesses and jobs and in order to encouragebusinesses to file for restructuring “early”.Of course these tools are in breach with basicprinciples of regular Danish contract law and are onlypossible under certain conditions. One of the primaryconditions is that the contract may not be terminatedearlier than four weeks before the company inrestructuring wishes to continue it (and before thereference date). It is also a condition that the contractpartner has not acted as a consequence of thetermination.Experience from using the newregulation so farAt the end of February <strong>2012</strong> there had been about200 cases under the new regulation, this includedlimited companies as well as physical persons.A review of the cases shows that most of thecases are minor in size and only a few of the caseshave so far ended in court sanctioned restructurings.Some cases are still in progress and a large number ofthe cases have stopped and entered into bankruptcy.The number of cases indicates that a lot ofdistressed companies are handled out of court and74

the size of the distressed companies further indicatethat larger and more complex cases are also handledout of court.Critics of the rules state that:• the rules are too rigid and complex;• the rules do not efficiently handle the relationshipbetween the distressed company and the floatingcharge pledge; and• the risk of ending in unnecessary bankruptcy istoo high.This view so far seems to have overcome thepositive elements of the new rules.In conclusion, Denmark has had, and still has, atradition of restructuring businesses out of court,where it is possible to negotiate individually designedagreements between debtors and creditors.At Deloitte it is our view that as a consequence ofthe new rules we will discover a larger share of outof-courtrestructurings and also that the new rules willlead to more bankruptcies and not less.The economic climate in Denmark,March <strong>2012</strong>Denmark as an open economy was severely hit by theglobal economic and financial crisis during 2008 and2009, whereas 2010 and 2011 to some extent werebetter off. Now at the brink of <strong>2012</strong> it seems as if theDanish economy may be facing either low growth oreven a recession.Denmark has however kept a good and stableposition out of the euro zone with high ratings and astrong currency, which has led to a very low interestlevel due to a large inflow from foreign investors.Overview of the Danish economicclimateDenmark has an open economy and is to some extentas volatile as the development in macroeconomicfigures from its most significant business partnerGermany. This means that the Danish economy hasbalanced at the edge of low growth and recessionduring 2011.Denmark is not part of the euro zone, butDenmark has chosen that the Danish currency islinked to the euro, which means that the developmentof the Danish kroner is closely linked to the eurodevelopment. Accordingly Denmark has to someextent been affected by the euro zone crisis from thedifficulties in the Southern countries of the EU.In spite of positive trends, such as the number oftransactions via the Danish payment card “Dankort”which showed an all time high during December2011, consumer spending has decreased during 2011and the outlook measured as consumer confidence isquite pessimistic.The relatively low consumer confidence is amongothers related to the fear of unemployment.Unemployment rates have of course risen during theyears of crisis, but it is still at a low level compared toother European countries.The housing market as well as the professional realestate market peaked during the good years around2006 and 2007 and have been characterised bydecreasing prices and a low number of transactionsever since.However Denmark has also proved to be a safeharbour to investors since Denmark has kept its AAAratings. This has led to a descending and very low levelof interest rates and a strong Danish currency.Danish government has tried to act on the lowlevel of growth by keeping public spending at a highlevel, which is expected to lead to a significant budgetdeficit during <strong>2012</strong>.At an overall level Danish banks have been underpressure since 2008. A majority of banks had at thattime created a funding gap. The Danish governmentFigure 2: Bankruptcies in Denmark – January 1979-20117,0006,0005,0004,0003,0002,0001,0006,4615,468019791983198719911995No. of bankruptcies1999200320072011Source: Statistics Denmark75

and the banks have since then created a total of five“bank aid packages” in order to secure funding andliquidity, but also in order to ensure that any distressedbanks are handled under acceptable terms in order tomitigate losses. Even though we have witnessed about10 bankruptcies among Danish banks, there are stillabout 115 independent banks in the country.Most of the 115 banks are small and regional orlocal and less than 20 of them have a working capitalabove DKr10bn (about €1.3bn). It should be notedthat only a few banks have direct, but limited,exposure towards Greece.During the last couple of years there were timesduring which it could be difficult for businesses as wellas consumers to obtain financing. However it seems asif this, to some extent, has become less difficult during2011 and the start of <strong>2012</strong>.The number of Danish bankruptcies peaked in2010 at 6,461, and even though it showed adecreasing level during 2011, 5,468 bankruptcies is stilla high level for Denmark. The development duringJanuary and February <strong>2012</strong> showed that the numberof bankruptcies is still at a high level.Outlook for <strong>2012</strong>In conclusion, it is my view that Denmark has beenaffected by the crisis and it is uncertain how long it willlast. A number of factors will impact the ability to regainfrom the crisis, some relating to the overall euro zonedevelopment and others to internal Danish matters.Public spending has been kept at a high level tosupport the economy, but private spending hasdecreased. The ability of regaining private spending isclosely related to the opportunities of obtainingfunding from the banks. As mentioned above thebanks have been supported by five bank aid packagesand we see signs that the industry is recovering.The banks have been accused of decreasedwillingness to lend to businesses. We do not have aview on this, but we have noticed a number of trendsin the behaviour from Danish lenders.When we were hit by the crisis during the years of2008 and 2009 we experienced that the bestbusinesses to cope with the crises were those whohad the best and most suitable and professionalgovernance structure. Since then banks have tried topersuade and convince their customers to improve thiselement of their businesses. At Deloitte we expectthat this element will become increasingly importantfor all businesses, no matter of the size, if they wish tomaintain a good relationship with their banks.Today banks set out higher demands towards theircustomers in terms of coherence between businessplans, budgets, risks, sensitivities and contingency plans.Accordingly we expect that Danish banks, to a higherdegree than, what has historically been the case, willdemand that customers’ document business plans,increase their ability and willingness to adapt tomarket fluctuations and set out new standards forprofessional governance.Danish banks are still under pressure from volatileinternational markets, a large amount of loans to,among others, distressed farmers and real estateinvestors with high loan to value ratios. We furtherexpect that Danish retailing and constructingcompanies will experience increasing difficulties during<strong>2012</strong>. It is characteristic for these industries thatlenders have floating charge or similar, which enablesthem to gain control of most of the business cycle.We expect that Danish lenders to a higher degreethan historically will use this power to influence theconduct of daily business and encourage restructuringmeasures.At Deloitte it is our view that a relatively highnumber of Danish businesses are distressed or nearlydistressed at this time. It is further our view that anumber of lenders have been reluctant to aggressivelypursue these distressed businesses. We expect that alarger portion of the distressed businesses will be“handled” by the lenders during <strong>2012</strong> and foreseehigher activity in the market for giving advice to banksand distressed businesses.Author:Jens Boëtius AndersenDeloitte <strong>Restructuring</strong> ServicesWeidekampsgade 6P.O. Box 16000900 Copenhagen CDenmarkTel: +45 20 82 04 33Email: jensandersen@deloitte.dkWebsite: www.deloitte.dk76

<strong>Insolvency</strong> and corporate restructuring issues in Finland:Current examples of swift restructuring proceedingsby Pekka Jaatinen and Marian Johansson, Castrén & Snellman Attorneys LtdIn this article we present two recent insolvency cases from Finland thathighlight the current trends in insolvency proceedings. In the first case,restructuring proceedings were carried out swiftly, following the provisionsfor the summary approval of the restructuring programme. The other case isan example of restructuring proceedings carried out in connection with thebankruptcy of a group’s parent company, with the shares of the subsidiarycompanies sold at the same time. The summary approval procedure was alsofollowed in this second case. We also discuss summary approval as part ofpre-pack restructuring. Finally, we present trends in the number ofrestructuring proceedings in Finland.<strong>Restructuring</strong> proceedings with the aim of rehabilitating a debtor’s viablebusiness are governed by the <strong>Restructuring</strong> of Enterprises Act (25.1.1993/47).The Act came into force during the economic recession that struck Finland inthe early 1990s, and it was extensively revised in 2007, mainly based on theexperiences gained from applying the Act to date. Section 92, regulating thesummary approval of the restructuring programme, was added to the Actin 2007.Average processing time ofrestructuring proceedingsThe average processing time of a restructuring matter inFinland in 2010 was 11 months, starting from the filingof the application and ending with the approval of therestructuring programme by the court. However, in45% of cases, processing lasted for over a year. Thefigures for processing times for 2011 have not yet beenpublished, but there have probably been no majorchanges to this trend.The district court is obligated to handle arestructuring promptly due to the nature of the matter,and thus the problem of prolonged proceedings is notcaused by long processing times in the courts. However,the legal regulations concerning proceduralrequirements have led to a situation where restructuringprogrammes are often approved approximately a year,or even longer, after the filing of the application. Thetimetable of restructuring proceedings is also to a largedegree dependant on the swift actions of theadministrator, as the administrator plays a large role indetermining the timetable of the proceedings. Thus, wewish to give an example of a restructuring programmethat was approved only six months after the applicationfor restructuring was submitted to the court.Case example of the summaryapproval of a restructuringprogrammeThe restructuring we handled concerned a Finnishchain of sport and leisure stores with over 20 storessituated all over Finland. The company was facing adifficult financial situation during and following therecent global economic crisis, with falling sales of sportand leisure products in Finland. The application forrestructuring proceedings was filed with the districtcourt in the beginning of July 2011. Attorney PekkaJaatinen, one of the writers of this article, wasappointed as administrator for the restructuringproceedings. The restructuring proceedings werecarried out with the help of a team of several lawyers,including experts in insolvency, finance andemployment law.The financial report prepared by the administratoris the first major step in the proceedings. The reporton the debtor’s assets, liabilities and otherundertakings and on the circumstances affecting thefinancial position of the debtor as well as on theexpected development of that position was deliveredto all creditors at the end of September 2011. Afterdrafting the report, we had gained a comprehensiveperspective on the prerequisites of a successfulrestructuring programme. The drafting of therestructuring programme took about two months,as the first draft restructuring programme wassubmitted to the district court and to the creditors inmid-November.The amount of secured debts, which will be paid infull, was about €5m. The company’s unsecuredrestructuring debts were just short of €20m. It wasproposed that unsecured debts be cut by 80%, andthe remaining 20% would be paid during the next77

10 years. The programme provided for the company’sright to premature payment of restructuring debts.According to the restructuring programme, thecompany is entitled to have the restructuringprogramme prematurely ended by effecting allremaining payments, pursuant to the restructuringprogramme, to the creditors as lump-sum payments,along with additional, percentage based payments onall original claims. This provision was important forsecuring wide acceptance of the programme.The draft restructuring programme was amendedbased on initial comments received from creditors,before the programme was submitted to the creditorsfor final approval. The final version of the programmewas sent for approval to all creditors in earlyDecember. The creditors reserved a period ofapproximately two weeks for considering whether toapprove or reject the programme, as they were askedto submit their statements before Christmas 2011.Summary approval procedure of arestructuring programmeIn order to speed up restructuring proceedings forreasons of procedural economy, the administrator filedfor summary approval of the draft restructuringprogramme in accordance with section 92 of theFinnish <strong>Restructuring</strong> of Enterprises Act. Under section92 of the Act, the draft restructuring programme canbe approved as the restructuring programme withoutthe need to comply with the provisions of sections72 and 74-76 of the Act, if written acceptance isreceived from all known creditors whose claims totalat least 80% of the overall total claims of thecreditors, and from each creditor whose claim is atleast 5% of the overall total claims of the creditors.A written statement from the debtor is also required.The draft restructuring programme shall, however, notbe approved, unless the creditors who object to it aretreated lawfully, or if the draft programme otherwisedeparts from the provisions of the Act concerning thestatus of creditors, or if there is a barrier to approvalreferred to in the Act.When following the conventional procedureconcerning the restructuring programme, the courtprovides the parties to the matter with a set timeperiod in which to submit written statementsconcerning the draft programme. Normally, creditorsalso have the right to submit objections to the claimsof other creditors referred to in the draft. Theadministrator then needs to serve these objections onthe debtor and on the creditors whose rights areaffected by the objections in question. After theparties have had the opportunity to state their viewson the draft restructuring programme and the courthas made a decision on the consideration of unclearrestructuring debts, the administrator is given theopportunity to rectify, review or supplement the draftprogramme within a set period, normally severalweeks in length. After the court has received the finaldraft, it makes a decision on how the creditors are tobe divided into voting groups, and which groups havethe right to vote. The court then exhorts thecreditors with the right to vote, and the creditorsstate to the court in writing within a set periodwhether they accept or reject the draft.To summarise, the summary approval of theprogramme is carried out without giving writtenstatements on the draft (section 72 of the Act),contesting the claims (section 74 of the Act), handlingobjections (section 75 of the Act) or voting on thedraft (section 76 of the Act). Consequently, usingsummary approval speeds up the procedure byseveral months.Though summary approval means that creditorsare prevented from presenting claims against othercreditors’ claims, they are however allowed torequest the rectification of errors included in theirclaims, and to further specify their claims. After thecreditors have had the opportunity to evaluate thedraft programme and give their approval or reject it,the court is presented with an account of how andwhen the creditors who have not accepted the drafthave been informed of it and been given theopportunity to comment on it, as well as with thewritten statements of the creditors objecting to thedraft. Thus, the court ensures that the administratorhas complied with the rights of the objectingcreditors, and that everybody has had the chance toreview the draft.In the case at hand, we held discussions with themain creditors of the company beforehand. Based onthe initial discussions between the administrator teamand all the relevant creditors, it appeared likely thatthe necessary consents for summary approval of theprogramme would be obtained. In this case, theprogramme was accepted by creditors whosereceivables amounted to more than 80% of all therestructuring debts, and thus the necessary approvalswere received. The restructuring programme wasapproved by the court in mid-January, only six monthsfrom the commencement of proceedings. Beforeapproval of the restructuring programme, anagreement was made with the main financier bank forthe future financing of the company. The company isnow implementing the approved programme.The support the company received from itscreditors shows that the company’s creditors haveconfidence in the future of the company. The swiftrestructuring was possible thanks to seamlesscooperation between the administrator, the company78

and its main creditors. In addition to saving time, it isnoteworthy that the summary approval procedurealso leads to savings of costs compared to theconventional procedure.Rapid restructuring of a groupcombined with the parentcompany’s bankruptcy and thepurchase of sharesAnother recent case example of the summary approvalof a restructuring programme concerns a group ofcompanies in the wind power industry. The parentcompany was declared bankrupt at the same time as itstwo subsidiaries filed for restructuring in June 2011.In this case, the parent company’s bankruptcyestate initiated a process to find a buyer for the sharesof its subsidiaries. The bankruptcy estate hiredinvestment bankers to look for buyers, while thefinancier of the group continued to finance thecompanies in restructuring, in order to enable them tocontinue their business operations, and thus topreserve the value of the shares. It is worth notingthat financing given to a company during restructuringproceedings has seniority in case bankruptcy is filedfor before the restructuring proceedings have ended.The bid for the shares had to cover at least theamount of the new senior debt mentioned above, thatpart of the restructuring debt covered by thecollateral, as well as an adjusted portion of unsecuredrestructuring debts. Hence the bidders in practicecompeted on the adjustment percentage. After carefulinquiries and bidding, the parent company’s bankruptcyestate found a buyer for the shares of its subsidiaries.The shares were sold to a foreign industrial groupwhose bid allowed for the maximal repayment ofunsecured debts. Accordingly, the percentagededucted from unsecured debts was determined bythe purchase price. The approval of the court for therestructuring programme was set as a preconditionfor the sale.The draft restructuring programme was submittedto the court and to the creditors in November 2011,after the signing of the share purchase agreement.At this point, some aspects connected withcompetition law also needed to be handled. Therestructuring programme was approved in Decemberin accordance with the provisions on summaryapproval presented above. After closing the SPA, thenew senior debt, the secured debts and the unsecureddebts were paid as lump-sum payments. The paymentto unsecured debts paid in February <strong>2012</strong> was over25% of the original debt. Additional payments forunsecured debts are still contingent.The summary approval of the restructuringprogramme only six months after filing was possibledue to swift cooperation between the bankruptcyadministrator, the restructuring administrators of thesubsidiaries and the main creditors of the companies.Summary approval as part ofpre-pack restructuringsPre-pack restructuring, an alternative way of carryingout swift restructuring which includes the summaryapproval of the programme, can be discussed here onlyin brief. The pre-pack discussed here is however,different from the pre-pack restructuring commonlyused in the United States and the United Kingdom.Pre-pack here refers to the restructuring programmebeing already pre-drafted before filing for restructuring.In this way, restructuring is pending in the court only fora very short period of time, minimising the feelings ofuncertainty experienced by the debtor company’sbusiness partners.Pre-packed restructuring requires that the draftrestructuring programme is as close to the final form aspossible before filing for restructuring. The programme isusually drafted in cooperation with a legal restructuringexpert, financial adviser, the company and all the majorcreditors, not just with the secured creditors. Beforefiling for restructuring, it is important to ensure that thenecessary approvals required for summary approvalpursuant to section 92 of the Act can be obtained.A successful pre-pack also requires that the filing isdone jointly with at least two creditors whose totalclaims represent at least one fifth of the debtor’sknown debts and who are not related to the debtor,or that these creditors declare their support for thedebtor’s application. In these circumstances, the aim isto avoid the time-consuming public announcementsand notices concerning the initiation of restructuring.In practice, it is possible for the restructuringprogramme to be approved right after, or even at thesame time as the court initiates the restructuringproceedings. In cases where the programme cannotbe submitted at the same time, it is generallysubmitted quickly after, pending some briefmodifications. In all respects, the approval procedurefor the programme follows the requirements set forthin Section 92 of the Act.Trends in the number ofrestructuring proceedingsThe number of restructuring proceedings filed withcourts in Finland in 2011 decreased slightly incomparison to 2010. In 2011, there were approximately500 applications for restructuring proceedings filed withthe courts. It is important to note that not all of theapplications led to the initiation of restructuringproceedings, and not all initiated proceedings led to anapproved restructuring programme.79

When compared with the numbers for 2008 andbefore, there is a marked shift in the number ofrestructuring proceedings. When the Act came intoforce in February 1993, there were over 500restructuring proceedings during that year. After that,the number of restructuring proceedings remainedsignificantly lower until 2008. The recent globaleconomic crisis can be seen much more clearly in thenumber of restructuring proceedings than in thenumber of bankruptcy proceedings. Between 2009and 2011, the number of restructuring proceedingshas once more peaked at around 500 applications peryear. However, we must also note that the number ofrestructuring proceedings per year is considerablysmaller than the number of bankruptcies.The number of bankruptcies in Finland in 2011 hasincreased slightly from 2010. However, there has beenonly a very minor increase. During 2011, a total of2,944 bankruptcy proceedings were initiated.Statistics are not yet available for the first monthsof 2011. However, we expect that the number ofrestructuring proceedings and bankruptcies in <strong>2012</strong>will be approximately the same as in 2011.Authors:Pekka Jaatinen, Senior PartnerMarian Johansson, AssociateCastrén & Snellman Attorneys LtdPO Box 233FI-00<strong>13</strong>1 HelsinkiFinlandTel: +358 (0)20 7765 765Fax: +358 (0)20 7761 001Email: marian.johansson@castren.fipekka.jaatinen@castren.fiWebsite: www.castren.fi80

Finland – Financial analysis and M&A transactionsas part of enterprise restructuringby Kari Niemenoja and Jonni Leporanta, Grant Thornton Finland OyFollowing economical downturn since 2009, the number of businessrestructuring proceedings according to the <strong>Restructuring</strong> of Enterprises Acthas increased. After certain legislative renewals in 2007, more focus has beenput on operational and business improvement instead of plain haircutting ofdebts. However, due to a number of reasons, improvement of financial andoperational performance is still an underweighted aspect in the proceedings.In particular, structural elements and transactions are lacking.The underlying ratio of the <strong>Restructuring</strong> of EnterprisesAct is primarily to enable companies to vitalise andimprove their distressed businesses and only secondlyto cut debts, as part of the restructuring toolkit. The<strong>Restructuring</strong> of Enterprises Act provides a relativelywide spectrum of tools:• reorganisation of the company’s business, changingthe legal form of the company, changes in Articles ofAssociation, etc.;• liquidation of funds or assets;• reorganising or downsizing personnel;• reorganising funding;• cutting debts; and• changing maturities or interests of debtsThe <strong>Restructuring</strong> of Enterprises Act does not ruleout sales of business or even acquisitions of newbusinesses. However, in practice the acquisition of newbusinesses takes place quite seldom, if at all. Themajority of transactions have related to real estatedivestments i.e. restructuring of real estate assets bysale-and-lease arrangements, etc; mainly in order tostreamline balance sheets and cost structures.In practice, only a handful of restructuringproceedings have included buy-side M&A transactions.Underlying reasonsThe creation of permanent performance improvementrequires, amongst others:• systematic, professional analysis of current status;• deep analysis of (real) underlying reasons behindunderperforming; and• thorough strategic analysis and reasoned decisionsthereof.In our view, a significant number of proceedingshave not included sufficient analyses, although positiveexamples also exist. This observation is partlywitnessed by a relatively high number of failedrestructurings; a significant portion of proceedings endup at bankruptcy before the termination of theprocess.In a fast changing business environment, enterprisesneed to take reasoned and well-analysed actions tomaintain their competitiveness. Businesses under theformal Business Reorganisation Act proceedings donot vary and are not immune to the same.On the contrary, distressed businesses, if any, needthorough and honest analysis about real reasons.Although often and easily stated, the underlyingreasons are seldom single or one-off events by nature.More often, there are several longer-lasting factors,which simultaneously have caused the difficulties.As an example, reasons may relate to some (orseveral) of the following issues:• weaknesses at management level;• weaknesses at R&D activities, wrong selections etc.;• poor allocation of resources;• weaknesses in reading and reacting to changeswithin business environment;• poor analysis of megatrends, technical innovations,actions by competitors;• underestimated or unidentified risks and/oroversized risk taking;• lost of competitiveness; and• insufficient tools to control the business orweaknesses to read the results.M&A transactions as part ofrestructuringsIn certain cases, the vitalisation of business and itscompetitiveness requires rapid structural reorganisation.The company might have lost its competitiveness dueto consolidation amongst its competitors – leading tostructural incapability to address such progress. Oftenthe company has failed to follow increasinglyaccelerating technical evolution – especially in such anenvironment where competitors accelerate theirevolution by acquisition of new innovations andtechniques.Therefore, in some cases well reasoned andanalysed acquisitions might be a viable tool to speed81

up the revitalisation of the business and to return itscompetitiveness.The same is true for the sale of businesses or partsof it; formal restructuring proceedings should be astopping point to analyse and consider whether someparts of the business are no longer core componentsor whether the business has permanently lost itscompetitiveness.If that proves to be the conclusion, it is aconsiderable option to maximise the value by sellingthe business (or parts of it) before the slow death ofthe business.Financial analysisAs mentioned above an in-depth professional andthorough analysis and assessment of the currentdistressed financial situation and underlying reasons isneeded in order to achieve a successful restructuring. Inorder to find the right medicine you first have to makea sufficient diagnosis of the current situation.In practice, common reasons for even fairly healthybusinesses facing a distressed economic situation andrelated liquidity problems is often that the model ofdriving the business during an upturn is no longerapplicable during a recession. A few examples offactors related to this are:• low margin – high volume or capital intensiveproduct or service models;• the traditional way of financing net working capital;• level of fixed costs too high during downturn;• timing of cash in and outflows becomes more criticalduring recession; and• dependence on “squeezing” customer or suppliercontracts.In connection with a corporate acquisition the aimof a financial due diligence process is to provideobjective information related to possibilities and risksregarding the acquisition from an independent thirdparty and then utilise this information further in theM&A process. In a similar manner, diligence andrelated analysis could be used valuably inrestructurings including familiar elements but naturallywith a slightly different scope. Common areas to beincluded in the analysis would then be:• historical trading and current profitability;• historical working capital and cash flow analysis;• analysis of financing structure and net debt position;• current profitability and future forecasts; and• off-balance-sheet items.Historical tradingThe historical trading makes a basis for futurepredictions and decision making and therefore it isimportant to understand in detail the different elementsincluded such as customers, products and existing costbase. Also from a restructuring programme perspectiveone of the key elements in analysing historical trading isto understand the normalised historical earningsadjusted for non-recurring or one-off items.Working capitalWorking capital is an area that can possibly release cashfor the business, on a short-term basis without orbefore entering into a larger restructuring programme.This is why focus on working capital reduction oftendeserves a lot of attention when finding ways toimprove the liquidity situation for a distressed business.When analysing the trade working capital (debtors,stock and accounts payable) and related financingissues in order to find solutions for improvement, areasof interest often are existing payment terms forcustomers and suppliers, inventory turnover, DSOratios and seasonal fluctuations in working capital.Cash flowUnderstanding cash flow is a vital part of financial analysisfor a distressed business. Many restructurings have failedbecause liquidity runs out before the correctrestructuring actions start to have an effect on thebusiness. Also a business reporting profitable earningscan face liquidity problems if e.g. all cash is tied up asworking capital or operative cash flow is not enough tocover the repayment of interest bearing debt accordingto existing payment plans. The cash flow analysis is thustightly connected to the working capital analysis since theoperative cash flow is basically the operating resultadjusted for non cash items plus or minus change inworking capital for the period measured.Another important part of analysing cash flow andmaking future liquidity predictions based upon these isseasonality analysis and describing normalised cashflow that has been adjusted for non-recurring items.Factors to consider when producing the cash flowanalysis include:• cash in and out flows from existing receivables andpayables;• cash in and out flows from future sales and purchases;• recurring monthly payments related to ordinarycosts of the business such as rent, leasing, salaryrelated and other operative costs from the currentcost base;• capex and maintenance costs; and• amortisation of interest bearing debt and paymentsof interest.Financing structure and interest bearing debt“Over leveraged” businesses facing threateninginsolvency because of the significant amount of interestbearing liabilities compared to the assets can seek tofind solutions other than just cutting the existing debt. Ifit is possible to convert existing debt to equity financingthis naturally strengthens the equity position andliquidity previously tied up for repayment and interestpayments are released.82

As part of the financial analysis it is important toget a detailed enough understanding of the conditionsand financial obligations of existing financing and theimpact on future cash flow and liquidity positions.Off-balance-sheet itemsItems outside the balance sheet can also be relevant forthe financial analysis in connection with a restructuringprocess. Items not yet recorded in the balance sheetand contingent liabilities can have a significant impact onthe financial position and future liquidity position.Typical off-balance-sheet items to be considered are• guarantees given;• rent and leasing;• environmental liabilities;• derivative instruments;• financial liabilities from litigation processes;• contractual agreements; and• financial covenants related to existing debt.Budgets and forecastsForecasts and development of realistic detailed enoughbudgets as support for future decision making is a keyelement also for the financial analysis. When analysing anexisting future forecast, focus should be placed onunderlying assumptions concerning significant itemsincluded in the forecast.Future forecasting is always a more or lesschallenging task especially in a difficult economicclimate. Therefore it can be meaningful to include asensitivity analysis taking into account the differentoutcome of the key elements of the forecast. Theanalysis can include different growth rates for futureturnover, different EBITDA levels and the impact onprofitability and cash flows.ConclusionAt best, restructuring processes are successfulcombinations of strategic, financial and legal tasks andreorganisations. A thorough and honest analysis ofthe current status is also imperative to reach thedesired results.Although certain improvement in that respecthave been witnessed, the weight is still too muchon reorganising only the debt-side of the balance,instead of improving the permanent performance byconcentrating more on the business itself. TheReorganisation of Enterprises Act gives room to bringnecessary actions to the table. We hope to bewitnessing positive changes in that tradition andultimately creating permanent value to allstakeholders.Authors:Kari Niemenoja, PartnerJonni Leporanta, PartnerGrant Thornton Finland OyPaciuksenkatu 27FIN-00270 HelsinkiFinlandTel: +358 (0)9 512 3330Fax: +358 (0)9 458 0250Email: kari.niemenoja@fi.gt.comjonni.leporanta@fi.gt.comWebsite: www.gtfinland.com83

Grasping the Frenchrestructuring marketby Nadine Veldung and Laurence de Rosamel, DC Advisory PartnersWith French restructuring being a young market, foreign investors often ask whythey should be investing in France and whether they should apply a premium toother European countries in their investment expectations to account for thelocal specificities, especially with regards to French politics and the legalframework. Yet nowhere else in Europe are there as many state-governedinstitutions and pre-insolvency proceedings to support troubled companies,whether by accompanying management in negotiations or by providing financialmeans in the interest of all supportive stakeholders. French restructuringprocesses may appear more difficult and complex but they can also unlocksignificant value for the patient investor.Compared to its English or American counterparts,the French restructuring market is fairly young, despitehaving tremendously evolved over the past 10 yearsthrough the emergence of a number of professionals(financial advisors, lawyers, auditors, firms specialised inoperational restructuring, cost managers, etc.), thecreation of new legal tools inspired by Anglo-Saxonlaw (safeguard, trusts, etc.) and the accumulation ofcase law and experience.One objective: French business andemployment preservationIn French restructurings, there is a genuine concernover the preservation of employment and businessactivity in the long term. There is an apprehensionwithin the French society of losing its know-how andits SMEs, as the general public is aware that growthcomes from innovation and entrepreneurship.Furthermore, a significant number of opinion leadersbelieve that the workers should not be sacrificed topreserve “capitalist” interest although also recognisingthat businesses are not supposed to be non-profit.These views are deeply rooted in French mentalityand are the reasons that explain general concern inFrance and why the public – and hence the press – isso interested in French restructurings.So this is how the politics start, it is alwaysimportant to understand who the elected politiciansin the company’s region are, what the relative size ofthe company within the local economy is, how manypeople the company employs and whether thebusiness know-how is unique on a national scale. Thehistorical implication of the State in the handling ofrestructuring situations and the political will to ensurethat no one is left behind have led to the creation bythe French State of numerous institutions to ensurethat the necessary means are deployed to assistFrench champions. These include accompanying bodieswith the CIRI/CODEFI and the Médiation du Crédit,and financing institutions with Oséo, the FCDE andthe FMEA. Finally, there is the Mandataire ad-hoc/Conciliator who is usually an administrator, and whocan be called into the business ahead of anyinsolvency procedure. France is often praised by itsEuropean peers for the way it provides for managersin need, through State services manned by civilservants coming out of the best administrative schoolsin the country.The CIRI and the Médiation du Crédit only getinvolved upon the request of management who arefacing difficulties, usually before any insolvencyprocedure is launched, and are acting on a strictlyconfidential basis. Involving the CIRI and the Médiationdu Crédit bears no cost to the company. Theseinstitutions as well as the Mandataire ad-hoc helpfacilitate negotiations with the aim to reach aconsensual agreement and avoid an insolvencyprocedure. They are also the eyes and ears of theCourt, giving credibility to any negotiation occurringbefore the situation is brought before a judge.A proposal documented by the CIRI, and/or theMédiation du Crédit and/or the Mandataire ad-hoc inpre-insolvency shall stand better in Court. In examininga restructuring plan, the judge will take employmentpreservation into account and will try to assesswhether all possible options have been considered withbest efforts.Creditors’ interests can be defendedThe French Safeguard was created in 2005 as aFrench version of the American Chapter 11. It is afairly recent proceeding which has provided muchrelief over the past few years but still requires furtherimprovement. Management is the only party whichcan place the company under Safeguard and call onthe Court to appreciate the financial difficulties of the84

Figure 1: A wide range of state-governed initiativesGoverning bodies Mission statement EligibilityPre-insolvency professionals Accompanying bodiesMédiateur du CréditInterministerialCommittee for Industrial<strong>Restructuring</strong> (CIRI)Mandataire ad-hocConciliatorMinistry of the Economyand FinanceFrench TreasuryAppointed by the CourtAppointed by the Court- Support companies with financing issues- Ensure compliance of financial institutionscommitments made under the French plan tosupport the French economy- Detect and advise troubled businesses- Act as a mediator with other stakeholders- Conduct audit- Develop a new Business Plan and ensure its financing- Contact third parties to provide new money- Conduct negotiations to find a restructuring plan- Implement a rescheduling of public claims- Exceptionally lend money- Provide crisis communication advice- Special Mediator appointed by the President of theCommercial Court exclusively on the request of themanagement of the Company- Duties are set out by the Court, generallyincluding negotiations with creditors- Lasts three months but can be renewed several times- Confidential and informal- Conciliator appointed by the Court at the requestof the debtor- Aim to promote an amicable agreement betweenthe debtor and its main creditors and contractingpartners in order to put an end to the business’sdifficultiesCompanies which can no longer access bankfinancing (refusal from banks)Companies with financial difficulties with morethan 400 employees(CODEFI - Comité Départemental d'Examendes Problèmes de Financement des entrepriseshandles situations with less than 400 employes)Companies with financial difficulties whichmust not be in cessation of paymentOut-of-Court voluntary restructuringCompanies which encounter an actual, or aforeseeable legal, economic or financial difficulty,and who have not been in a state of cessationof payments for more than 45 daysFunded by the FrenchState (directly andthrough the CDC)and banks- Support and fund innovative SMEs- Provide technical assistance- Finance investments and working capital requirements- Guarantee bank loans and equity contributionsInnovative SMEs in all sectors excludingproperty management and financial activities250 employees at most, with sales notexceeding €50m and/or total balance sheetnot exceeding €43mFunding institutionsFunded by FSI, banks andinsurance companiesFunded by FSI, PSA-Citröen and Renault- Finance the recovery and development of SMEswith strong potential- Stabilise corporate governance and facilitaterelations with banking partners- Invest between €2m and €15m over 5 to 7 years- Support the French Automotive sector- Support consolidation and innovative projectswithin the sector- Funds size: €650m- Maximum ticket: €60m for Tier 1 and €5m for Tier 2Companies with strong potential identified bythe Médiation du Crédit (with a turnoverbetween €20m and €200m)Tier 1 - Large automotive OEMTier 2 - Small automotive OEMFunded by the FrenchState (directly andthrough the CDC)- Develop a business (organic growth or build-up)- Support a transformation of a company- Strengthen the shareholding of a company- Inject equity or buyback shares- Can in special cases provide new money fordevelopment capex after a financial restructuringCompany with a strong competitive position,and whose skills, expertise or technology areimportant for the French industrycompany and the necessity of the proceeding. UnderSafeguard, creditors can regroup in committees whichrequire a two-thirds voting majority hence allowing fora cram-down of dissenting lenders.However, the French Safeguard does not provideany shareholder cram-down mechanism even whenthe equity value is clearly out of the money, whichmakes any non-consensual deal difficult and costly toimplement. Shareholder cram-down is howeverpossible in Redressement Judiciaire, but with verynegative impact on the business (negative imageconveyed to clients, suppliers, employees, etc.) andultimately on creditors and with a possibility of losingthe business to a third party which can table acompetitive bid to the Court. Another creditordiscomfort regarding the French Safeguard comes withthe judge’s prerogative to rule in favour of aten-year term-out should the safeguard plan presentedby the company prove unsatisfactory to the Court.These two specificities combined are effectivelylightening the burden of the out-of-the-moneyshareholder who has little to lose in a Safeguardproceeding (if the impact of the procedure on thecourse of business is limited): he cannot be ousted ifhe does not want to and, as a stakeholder, can stallthe negotiation proceedings, thus providing means fora court-ruled arbitrary term-out. In any case, thestandard term-out does not cover new moneyinjections which are often needed. These can only beaddressed in consensual discussions amongst thestakeholders and potentially new money investors.As a matter of fact, recent cases have shown that85

Figure 2: Examples of French creditor-led restructuringsIn €mNovasepIn €m500450CPI450400350300250200150100119 289Equitiseddebt(97.7%)301504003503002502001501006230328Equitiseddebt(majorityownership)4012350021Pre-restructuring32Post-restructuring500Pre-restructuring30Post-restructuringOther financial debtHY bonds (euros)HY bonds (dollars)Reinstated HY bondsNew money (preference shares)Equitised debtSenior debtSecond-lienMezzanineEquitised debtNew money (RCF)Reinstated senior debtSubordinated convertible notes (ORA)creditors could take the keys in a consensual dealincluding new money (Novasep and its USbondholders, CPI and its European banks, etc.). Ifcreditors, whether French or foreign, can navigatethrough the politics, get the necessary advice fromlocal professionals, are ready to support thedevelopment of the business – potentially with newmoney provided or not by a third party – areconstructive during the negotiations which may beheld under the supervision of the CIRI and/or theMandataire ad-hoc and/or the Médiation du Crédit, allthe right dynamics are there to work towards asuccessful consensual deal.Management is key in any legalproceedingAny investor will agree that management is key, asthey are the ones who run the business and whoensure that debt is being serviced and that equityvalue is being created. In distress cases however,management’s credibility can sometimes be impactedvis-à-vis the company’s financial stakeholders. Yet, in theeyes of the French courts, management remains thereference in terms of vision for the business andfiduciary duties to the company and its employees,and its voice will in most cases be heard and bear aheavy weight. Securing management support for arestructuring solution is even more key when theFrench legal framework does not really provide for anequity cram-down, and as management andshareholders’ agendas become less and less alignedwhen the viability and future of the business is moreand more at risk.However, management must remain independentas required by its fiduciary duties to the company, butbeyond this, financial stakeholders have much at riskshould they try to influence the decision process ofthe company. This is called ‘gestion de fait’ – de factomanagement – under French law and can lead to legalactions against the overly hands-on stakeholder whoseliability may be extended beyond the amountsinvested – whether in cash to fund liabilities and/orthe responsibility to reassign laid-off employees.Having management on board in a Frenchrestructuring also facilitates the dialogue withemployees, especially when a restructuring solutionhas to be presented to the works council for aconsult. The issue here is not so much to secure itsblessing – which is not required – but to ensure, viamanagement, that the works council issues its opinionin a reasonable timeframe to avoid delaying theimplementation of the restructuring solution.France can be an attractivegeography for distressed investorsIn the absence of a legal shareholder cram-downmechanism outside of the Redressement Judiciaire,restructuring processes can take longer in France andsometimes be more complex. Nevertheless, bold andpatient distress investors are able to unlock value in themedium to long term. In fact, beyond the additionalcomplexity, this specificity gives a very important role tothe new money provider while shifting negotiationleverage away from the fulcrum credit.86

Since the beginning of the 2008 crisis, France seemsto have suffered less than some of its European peerswith fewer heavy restructurings. Covenant resets andnow Amend-to-Extends are numerous with a hugepotential need for liquidity to refinance debt issued in2006-07, when France was one of the most activebank debt markets in Europe. As we expect moresituations to come to market in the short to mediumterm,with amortisations and maturities drawing near,there will clearly be a need for restructuring experts toprovide advice and/or financial means. Considering thatmany foreign banks have exited the French marketand/or have reduced their leverage finance activitiesabroad and with French banks also being nowadays ina much more difficult position than they used to be,the French restructuring market shall also be driven byalternative liquidity.Authors:Nadine Veldung, Managing DirectorTel: +33 1 42 12 49 52Fax: +33 1 42 12 49 49nadine.veldung@dcadvisorypartners.comLaurence de Rosamel, ManagerTel: +33 1 42 12 49 53Fax: +33 1 42 12 49 49laurence.derosamel@dcadvisorypartners.comDC Advisory Partners36 rue de Naples75008 ParisFranceTel: +33 1 42 12 49 00Website: www.dcadvisorypartners.com88

Recent developments inFrench restructuringsby Rod Cork and Marc Santoni, Allen & Overy LLP / SCP Santoni & Associés2011 has been a year which has seen a number of legislative amendmentswhich widen the practical application of sauvegarde proceedings and somekey decisions issued by the French Supreme Court.Accelerated financial safeguardA new accelerated sauvegarde procedure (sauvegardefinancière accelérée) (AFS) came into force on March 1,2011. AFS is aimed at providing fast-track safeguardproceedings a view to providing greater flexibility inrespect of companies which continue to beeconomically operational and to preserve value forstakeholders. AFS is a fast-track form of safeguardproceeding for financial restructurings (unlike standardsafeguard proceedings, trade creditors are not includedin an AFS) which covers financial institutions (andassimilated entities) and bondholders. Trade creditorscan continue to receive payment of their debt claims,pre and post opening of AFS.AFS can only be initiated by a solvent companythat is facing legal, economic or financial difficulties,actual or anticipated, which it will not be able toovercome. A company is solvent if it can pay its debtsas they fall due for payment with its available assetsand having regard to any grace periods granted by itscreditors.AFS is available to a company for whichconciliation proceedings (procedure de conciliation)have been opened, which satisfy certain criteriamentioned below and which can justify having a draftrestructuring plan that ensures the viability of thecompany and is likely to receive sufficiently largesupport from its financial creditors in order to havethe plan adopted within one month (extendable forone month) from the opening of AFS.AFS criteriaThe criteria fixed initially to open AFS was that thecompany must employ more than 150 salariedemployees or have a turnover of more than €20m onthe date of its request to open AFS.These criteria have effectively meant that AFS wasnot available for holding companies or nonoperationalsingle purpose vehicles often used inleveraged finance and property transactions in France.An attempt to rectify the position was made inMay 2011 by the ‘Warsmann’ law, but certainprocedural aspects of the Warsmann law weredeclared unconstitutional by the French ConstitutionalCourt. Accordingly, new legislation was introduced todeal with this issue and has come into force onMarch 3, <strong>2012</strong>.Recent legislation widens the scope of eligibility forAFS to include holding companies or controlled groupsubsidiaries, whether consolidated or not, which holdfinancial debt. The new criteria will be fixed by decreeby reference to the amount of debt on the balancesheet of a company and is expected to be between€10m to €20m.Creditor AFS claims and informationThe filing of a proof of claim by a creditor upon theopening of the AFS is a simplified procedure to that fortraditional safeguard proceedings. The debtor companymust draw up a list of creditors which haveparticipated in the conciliation proceedings and theirclaims will be certified by its statutory auditors oraccountants and filed with the court registrar. Recentlegislation provides that the mandataire judiciaire will beobliged to notify the creditors appearing on this list ofthe details of their claims by registered letter and not,as was previously the case, by any means. The intentionis to better protect the creditors.BondholdersRecent legislation now provides that subordinationagreements among bondholders and other creditorsentered into prior to the opening of safeguard orrehabilitation proceedings will be taken into account inany draft safeguard or rehabilitation plan, bringing thebondholders’ position into line with the relevantprovisions affecting other financial creditors.The legislation also provides that bondholders willnot vote on any draft safeguard or rehabilitation planif the draft plan does not amend the paymentmodalities for them; or if it provides for the paymentin cash of their bonds as soon as the court approvesof the safeguard or rehabilitation plan; or as from theadmission of the bondholders proofs of claim.PublicityRecent legislation has amended the provisions relatingthe discharge from the companies register of theobligatory legal inscription relating to a safeguard planor rehabilitation plan. The legislation provides for anautomatic discharge from the companies register at theexpiry of a period of three or five years from the date89

on which the safeguard plan or rehabilitation plan wasapproved by the court.Coeur DefenseConditions to open safeguard proceedingsIn the long-running, Coeur Defense case, the FrenchSupreme Court has given guidance on whensauvegarde proceedings can be opened.In its decision of March 8, 2011, overturning thejudgment of the Paris Court of Appeal, the FrenchSupreme Court decision considered that:• even if the safeguard procedure is aimed atfacilitating the reorganisation of the company inparticular to permit the continuation of its business,the opening of safeguard proceedings was notsubordinated to the existence of an actual difficultywhich affected its business;• absent fraud, the opening of safeguard proceedingscould not be refused on the ground that thedebtor company would seek to avoid itscontractual obligations once the debtor companycould establish difficulties which it was not in aposition to overcome; and• the opening of safeguard proceedings could not berefused on the grounds that its shareholders wouldnot otherwise be in a position to avoid losing thecontrol of the debtor company.When the matter was referred back to the Courtof Appeal of Versailles, it confirmed the decision of theParis Commercial Court of October 7, 2009 andconcluded that on the facts at the date of the openingof the safeguard Hold was encountering difficultieswhich it could not overcome (and which could have ledto its insolvency - this was at the time, but is no longera condition to the opening of safeguard proceedings).Centre of main interestsIn the Coeur Defense case, the Court of Appeal ofVersailles had to consider whether the ParisCommercial Court did have jurisdiction to opensafeguard proceedings against Dame Luxembourg,Hold's parent company, having regard to Article 3 ofthe EC <strong>Insolvency</strong> Regulation <strong>13</strong>46/2000 (the EC<strong>Insolvency</strong> Regulation) on insolvency procedures. Theissue was whether the centre of main interest (COMI)of Dame Luxembourg was situated in Luxembourg orFrance or (possibly) the UK on the date of the openingof the safeguard proceedings. The Paris CommercialCourt had concluded on the facts that DamesLuxembourg's COMI was France.Article 3 of the EC Regulation provides that thecourts of the Member State in which a debtorcompany has its COMI have jurisdiction to open maininsolvency proceedings. Article <strong>13</strong> of the Regulationprovides that the COMI of a debtor company shouldcorrespond to the place where it conducts theadministration of its interests on a regular basis andwhich is verifiable by third parties. There is arebuttable presumption that the COMI of a debtorcompany is the place of its registered office, but thismay be rebutted on the facts by reference to criteriathat are both objective and ascertainable by thirdparties.In its decision of January 19, <strong>2012</strong> confirming thejurisdiction of the Paris Commercial Court, the Courtof Appeal of Versailles found that this presumption wasin fact rebutted. The Court of Appeal of Versailles foundthat there was a series of facts and elements whichwere objective and verifiable by a third party and whichdemonstrated that Dames Luxembourg's COMI wasParis France and not Luxembourg (or the UK).Among the facts taken into account by the courtto support COMI in France were:• Dame Luxembourg's sole assets were the holdingof 100% of the share capital of Hold, a Frenchcompany whose main asset was the property atCoeur Defense in France;• Dame Luxembourg had taken the decision toincrease the share capital of Hold in Paris;• Dame Luxembourg had acquired a participation inSCI Karalis (later Hold) in Paris;• the most important legal document entered intoby Dame Luxembourg vis-à-vis third parties andwhich was verifiable by third parties was sharepledge given by Dame Luxembourg over all of itsassets, the shares in Hold, to secure the loan facilitymade available to Hold to acquire and refinancethe acquisition of Coeur Defense;• as regards all acts and contractual relationshipsconcluded in Paris, Dame Luxembourg wasrepresented by a director of Hold; and• the legal documents were entered into by DameLuxembourg in Paris, governed by French law andthe subject to the jurisdiction of the French courts.Among the facts which the court did not take intoaccount were:• the fact that Dame Luxembourg's share capitalwas owned by a Luxembourg parent company,itself partially owned by a Luxembourg companyhaving a common management;• the existence of a loan granted by its Luxembourgparent company;• the managers of Dame Luxembourg weredomiciled in Luxembourg, London and New Yorkat the time of filing for safeguard;• the implication from London of a shareholder inthe transactions entered into by DameLuxembourg; and• the use of the English language in the contractualdocuments to which Dame Luxembourg was aparty.90

Allen & Overy LLPoffers a wide rangeof servicesto international and domestic restructurings, witha dual expertise in corporate and banking laws.Allen & Overy and leading French law insolvencypracticeSantoni &Associéshavea strategicarrangementand work together on restructuring andinsolvencyrelated work in France. This arrangementcovers all types of debt restructurings and work-outs,corporate and fund buy-outs, refinancings, pre- andpost-insolvency related procedures and distresseddebt trades in France.The arrangement is the fruit of a close collaborationbetween Allen & Overy and Santoni & Associésover many years on restructuring and insolvencyrelated matters in France. It enables the twofirmsto pool their expertise and resources on domesticand international cross-border transactions coveringboth public and private companies, LBOs andstructuredtransactions.Advisory workPost insolvencyto private equityrelatedon insolvencyproceduresrelated mattersAdvisory work toPre insolvencyinvestment fundsrelated procedureseson insolvency<strong>Restructuring</strong>related mattersand <strong>Insolvency</strong>Gold AwardAllen & OveryLLP/Santoni & Associéss<strong>Restructuring</strong> and <strong>Insolvency</strong>Team ofthe YearTrophées du Droit et de la Finance 2010, DécideursCONTACTSAllen & Overy LLPRod Cork Carine Chassol Adrian Mellor lor - Julien RouxTel +33 (0)1 40 06 54 00 Fax +33 (0)1 40 06 54 54Allen & Overy LLP52 avenueHocheCS 9000575379 Paris Cedex 08 Francewww..allenovery.comSantoni & AssociésMarc Santoni Bérangère Rivals Lionel LamourTel +33 (0)1 44 05 11 11 Fax +33 (0)1 44 05 14 41Santoni & Associés15 avenued'Eylau 75116Paris Francewww. .scp-santoni.comTurnarounds andrestructuringsLitigationproceduresrelated to thesetransactionsDistresseddebt tradesBérangère RivalsPartnerRod CorkPartnerMarc SantoniPartnerJulien RouxPartnerAdrian MellorPartnerLionel LamourPartnerCarine ChassolPartner CS1011040_ADD-3858© Allen & Overy LLP <strong>2012</strong>www. .allenovery.com

TechnicolorAs part of the safeguard plan approved by theNanterre Commercial Court on February 17, 2010, theholders of certain deeply subordinated instruments(TSS) saw their voting rights reduced and their rights toreceive the payment of interest in the future cancelledin exchange for a small but immediate cash payment ofthe nominal amount of the TSS. The TSS holdersbrought an action to have the bondholders meetingwhich had voted on the safeguard plan declared nulland void, to re-open the safeguard proceedings and fortheir exclusion from the safeguard plan.On November 18, 2010, the Versailles CommercialCourt rejected their application and confirmed thesafeguard plan. On February 22, <strong>2012</strong>, the FrenchSupreme Court confirmed the decision of the VersaillesCourt of Appeal. Although the French Supreme Courtnoted certain irregularities as regards the TSS holdersvoting rights during the bondholders meeting, it alsonoted that these irregularities had no influence on theoutcome of the vote at that meeting and accordinglythe Versailles Court of Appeal had been right not toannul the bondholders' meeting. The French SupremeCourt also considered that the TSS holders rights weresufficiently protected by the safeguard plan.PetroplusRecent legislation was introduced within the politicalcontext of closures of plants and sites in Francebelonging to subsidiaries of foreign groups in France,having regard to the prevailing economic and socialclimate marked by increasing de-industrialisation and aninability for such subsidiaries to meet their continuingenvironmental obligations, of which the Petroplusmatter is an illustration.The legislation enables the French courts to grantconservatory measures over assets of directors andshadow directors where an action has been broughtagainst them in tort alleging that they have, as a resultof their fault, contributed to the insolvency of acompany which is subject to safeguard proceedings,rehabilitation proceedings or judicial liquidationproceedings. The works council or personnel delegateswill be informed of any conservatory measuresgranted by the court.In judicial liquidation proceedings, the court mayalso authorise the judicial transfer of certain assetswhich are the subject of conservatory measures. Theassets concerned are those whose conservation ordetention generate cost and expenses or which wouldbe the subject of deterioration. The judge (jugecommissaire) may authorise the use of such amountsto pay unpaid costs and expenses in theadministration or liquidation if the debtor hasinsufficient funds available.Conservatory measures may also be ordered bythe court where an action has been brought for comingling(confusion des patrimoine) of assets and/orliabilities between companies or where an action hasbeen brought alleging that the company is in factfictitious (fictivité).BelvedereThere have been a number of developments in theBelvédère case.In its decision of September <strong>13</strong>, 2011, the FrenchSupreme Court recognised, in France, the effect of atrust and parallel debt mechanism under a noteindenture governed by New York law, withoutrequalification. This decision meant that the notetrustee was entitled to file proofs of claim in Frenchsafeguard proceedings on behalf of all thenoteholders.A further development in the Belvédère case cameon March 8, <strong>2012</strong> when the Nimes Court of Appealoverruled decisions of the Nimes Commercial Courtmade in summer 2011. By way of background theNimes Commercial Court had extended safeguardproceeding which had been opened against SASMoncigale (a subsidiary of Belvédère) to Belvédèreitself on the grounds of co-mingling (‘confusion despatrimonies’). The Nimes Commercial Court laterconverted these safeguard proceedings intorehabilitation proceedings (administration judiciaire),after having noted that both companies wereinsolvent.On March 8, <strong>2012</strong>, the Nimes Court of Appealoverruled the decisions of the Nimes CommercialCourt and cancelled the opening of safeguardproceedings against SA Belvedere. The Nimes Courtof Appeal considered that co-mingling could not beinferred either because of Belvédère's ownership ofthe share capital SAS Marie Brizard and RogerInternationale, which owned of SAS Moncigale, or bycommonality of management among these companies.The court also noted that the following facts werenot sufficient to constitute an abnormal financialrelationship which characterises co-mingling:• transactions as part of a group policy betweengroup members to redistribute financialinstruments cover;• a new group distribution policy resulting in SASMoncigale concentrating its business activity onproduction; and• the participation of SAS Moncigale at trade fairsfor the promotion of business lines/marks underwhich its products were distributed even thoughthese marks did not belong to it and in theabsence of any financial contribution from anothergroup member towards this participation92

MediasucreJudicial liquidation had been opened in France inrespect of Mediasucre a French registered company. TheFrench liquidator applied to join an Italian registeredcompany, Rastelli, to the proceedings under the Frenchlaws of consolidation for co-mingling. The French courtat first instance found that it lacked jurisdiction asRastelli's registered office was in Italy and Rastelli didnot have an establishment in France.Following appeal, the French Court of Appeal heldthat it had jurisdiction to join Rastelli to the maininsolvency proceedings on the basis that the effect ofthe consolidation for co-mingling was not to openseparate insolvency proceedings in respect of Rastelli,but only to join Rastelli to the insolvency proceedings.Rastelli appealed and this led to a reference to theECJ by the French Supreme Court.In its decision of December 15, 2011, the ECJheld that:• where a court of a member state which hasopened main insolvency proceedings in respect ofa company can, under a rule of its national law, jointo those proceedings a second company whoseregistered office is in another member state, it cando so only when that second company has itsCOMI in the first member state. Therefore, the EC<strong>Insolvency</strong> Regulation has the effect of restrictingthe operation of substantive consolidation laws;• the mere finding that the property of twocompanies has been intermingled (the existence ofintermingled accounts and abnormal financialrelations) is not sufficient to establish that theCOMI of the company which is to be joined to theproceedings is in the member state where the firstcompany has been placed into insolvencyproceeding, because this would not necessarily beascertainable by third parties.In order to reverse the COMI registered officepresumption, it would therefore be necessary toassess the relevant facts for the purposes ofestablishing, in a manner ascertainable by third parties,where the actual centre of management andsupervision of the company concerned is situated.The ECJ reached this decision on the grounds that,while under French law joining a separate legal entityto the existing insolvency proceedings did not institutenew insolvency proceedings, in reality this had thesame effect as opening insolvency proceedings inrespect of the separate legal entity. A decision whichproduced the same effects as the opening ofinsolvency proceedings could only be taken by thecourts of the Member State that have jurisdiction toopen such proceedings and this was governed by theEC <strong>Insolvency</strong> Regulation.Since Article3(1) of the EC <strong>Insolvency</strong> Regulationconfers exclusive jurisdiction to open mainproceedings on the courts where the debtor's COMIis located, to allow laws of substantive consolidationfor co-mingling to permit another company to bejoined to insolvency proceedings without consideringwhere that company's COMI was located wouldcircumvent the jurisdictional rules of the EC<strong>Insolvency</strong> Regulation. This would create conflictingclaims to jurisdiction between courts of differentMember States that the EC <strong>Insolvency</strong> Regulation wasspecifically intended to prevent.KartogroupIn refusing to invoke Article 26, the French SupremeCourt took the view that, as long as there is an abilityfor a creditor to be heard in relation to the decision toopen the insolvency proceedings in question at somepoint in time during the course of the insolvencyproceedings, then this was sufficient for a party’sfundamental right to be heard not to have beeninfringed.In September 2008, the Italian court openedconcordato preventive proceedings in respect ofKartogroup S.r.l a company incorporated under Italianlaw with its registered office in Italy and two of itsFrench subsidiaries on the grounds that that theCOMI of all three companies was in Italy. Accordingly,the Italian proceedings were main proceedings for thepurpose of the EC <strong>Insolvency</strong> Regulation.Following the opening of the Italian proceedings,French creditors of the French subsidiaries tookconservatory measures over the French subsidiaries'assets in France. The French subsidiaries applied to theFrench courts for the cancellation of the interim lienson the grounds that Italian insolvency law prohibitedany creditor to take such measures after the openingof a concordato preventive and on the ground thatpursuant to Articles 16 and 17 of the EC <strong>Insolvency</strong>Regulation, the effects of the Italian proceedings wereautomatically recognised in France.The French court of first instance and the FrenchCourt of Appeal ordered the cancellation of theinterim liens. A French creditor appealed to theFrench Supreme Court on the basis that pursuant toArticle 26 of the EC <strong>Insolvency</strong> Regulation, the Italianproceedings should not be recognised in France.Article 26 of the EC <strong>Insolvency</strong> Regulation providesthat any Member State may refuse to recogniseinsolvency proceedings opened in another MemberState where the effects of such recognition would bemanifestly contrary to that Member State's publicpolicy, in particular its fundamental principles orconstitutional rights and liberties.The creditor argued that the procedural rights ofcreditors were not guaranteed in the Italian93

proceedings because a concordato preventivo does notallow creditors a right of appeal against the courtjudgment opening the proceedings, but only a right ofappeal against the court judgement confirming thecomposition agreement. Therefore the Italianproceedings should not be recognised in Francebecause they were manifestly contrary to Frenchpublic policy and French procedural public order.The French Supreme Court rejected the appeal onthe grounds that a right of judicial recourse underItalian law did exist which allowed the French creditorto contest the jurisdiction of the Italian courts to openmain proceedings in respect of the French subsidiaries.The French Supreme Court would appear to havetaken the view that, so long as there is an ability for acreditor to be heard in relation to the decision toopen the insolvency proceedings in question at somepoint in time during the course of the insolvencyproceedings, then this was sufficient for thefundamental right of a party to be heard not to havebeen infringed.Reform of EC regulation <strong>13</strong>46/2000In March 2011 the legal affairs commission organised ahearing on the harmonisation of European <strong>Insolvency</strong>proceedings. The commission published its report andrecommendations on October 17, 2001 and onNovember 15, 2011 the commission's report wasadopted by the European Parliament in full session.Among the recommendations were:• harmonisation by way of European Directive of theconditions for the opening of insolvencyproceedings, for example, the ability of openinginsolvency proceedings against assets of an entitywhich has no legal personality, such as, a Europeaneconomic interest group ;• modification of the EC Regulation, for example, inorder to integrate proceedings in which the debtorretains management of the business, and to includea definition of COMI having regard to case loadcriteria ; and• introduction of insolvency regulations relating togroups of companies, for example, introduction ofproceedings where the group has its registeredoffice and suspension of proceedings in otherMember States.Authors:Rod Cork, PartnerAllen & Overy LLP52 Avenue Hoche75008 ParisFranceTel: +33 1 40 06 54 00Fax: +33 1 40 06 54 70Email: rod.cork@allenovery.comWebsite: www.allenovery.comMarc Santoni, PartnerSCP Santoni & Associés15 Avenue d’Eylau75116 ParisFranceTel: +33 1 44 05 11 11Fax: +33 1 44 05 14 41Email: msantoni@scp-santoni.comWebsite: www.scp-santoni.com94

<strong>Restructuring</strong> trendsin Germanyby Joachim Englert and Leo Smith, PricewaterhouseCoopers AGOver the course of the recent global economic crisis, the German economyhas demonstrated a strength and resilience which continues to underpinmuch of Western Europe. This is partly due to the relatively highmanufacturing base at the core of the country’s industry (still probably 25%of total German GDP, while for example the UK and US are now well below20%), but strength may also be attributed to the impact of some of theeconomic stimuli utilised by the German government, including:• the “cash for clunkers” cash scrappage scheme for older cars to encouragethe purchase of new cars and the continued stimulation of the country’slarge automotive industry;• certain other public-funded programmes to support growth and innovationlike solar subsidies offered to manufacturers of photovoltaic technology(promoting both manufacturing and an overall trend in Germany towardsgreener power generation). Germany has established itself as one of theworld’s leaders in adopting solar technology and now owns between onethird and half of the world’s photovoltaic cells; and• short-term working support, where companies have been able to retainstaff, but on a more flexible basis, reducing fixed costs of participatingcompanies and providing greater flexibility to deal with financialchallenges faced in the recent difficult operating environment.The last measure in particular has provided the German economy with aboost, particularly as the green shoots of economic recovery have emerged.A direct result of this stimulus is that unemployment has remained lowthroughout the crisis. This almost certainly resulted in private consumptionremaining at a fairly high (at least for German standards) level, and enabledcompanies to retain skill levels in their workforce. This, in turn, has allowedthem to respond more quickly to the more recent uptick in activity andcommensurate increases in demand. As a result, the German economy hasbeen at an advantage compared to other Western European counterparts.Going forward, the German economy is expectedto continue to be significantly influenced bydevelopments in global capital markets. With exportsstill being a major contributor to the overall success ofthe German economy, lower growth expectations inWestern Europe or even China will have negativeeffects on German companies. As such it should notbe expected that these unusual positive trends inGerman economic activity will be something tocontinue forever.Trends in financial restructuringDriven by the overall economic situation, restructuringwork has thrived over the last few years. Companiesof all industries and sizes have been worked through,with most of the headlines being created by largeinsolvency filings, including: Arcandor (Karstadt),Manroland, Honsel and also more recently, cases likeSchlecker and Pfleiderer. <strong>Restructuring</strong> advisors havealso been kept busy working through troubledMittelstand companies, at the core of the Germaneconomy. Lately, the solar industry has returned to thepublic eye as it encounters the changes from newsubsidy regulations, with companies like Conergy andSolon making the headlines.The majority of the attention in the restructuringcommunity however has been focused on the caseswith a private equity background. Over the course ofthe last three years, the restructuring market hasworked through several significant leveraged cases,with Monier, Stabilius and Bavaria Yachtbau reflectingonly the beginning of this wave of cases. Thetrademark of these cases has been an underlyingpositive operational performance, but with a debtlevel on the balance sheet preventing a prosperousfuture. Therefore, restructuring advisors have neededto establish some innovative solutions to deal withproblematic levels of debt in the post-Lehman era inorder to successfully restructure what is, underneaththe debt pile, an otherwise viable proposition.95

Solutions such as:• debt forgiveness (despite possible taxationimpacts);• debt pull-ups;• debt to hybrid swaps; and• internalisation of debt (with PPLs established as anew instrument for external investors, mainlysenior and mezzanine lenders) have all been usedsuccessfully to establish a mechanism which,depending on the circumstances, allows lenders torecover value in an investment. Despite theseinnovative solutions, however, German lenderscontinue to hesitate to take an equity position intheir investments. Instead, they have tried to gaincontrol of restructuring processes by installingtrustees (so called “double trust” given that thetrustee is not only working for the party handingover the security but also for the secured lenders;examples include cases like Novem, Gienanth andeven Opel) and trying to capture upside potentialby agreeing on promising notes.With a significant level of older leveraged deals stillout there, the prospect of ongoing restructuring ofthese cases in particular seems inevitable as the“debt maturity wall” approaches – despite beingsmoothed due to bond issues and amend-to-extendtransactions used to push maturities out into thefuture. Adding to this refinancing problem are thecompanies of the Mittelstand, which were probablyquite happy to pick up a piece of the “standardmezzanine programme” pie a few years back, only tofind now that it is very difficult to get new investorsbringing money to the table at par. Even the newlyopened market for the so called “Mittelstands Bonds”does not seem liquid enough to solve each and everycase, especially given the fact there are alreadyindications of trouble ahead in this newly establishedsegment of the capital market.<strong>Insolvency</strong> law – long awaitedchanges towards the right directionAn article like this one would be incomplete without acomment on the latest changes to the insolvency lawsin Germany. Much has been said already regarding theimpact of these changes which have been effectivesince the beginning of March <strong>2012</strong>. From a businessperspective, the ability of the lender to influence theappointment of the (temporary) insolvencyadministrator is significant and moves the regime moreinto line with the creditor friendly approach of the UK’ssystem. Creditors will certainly also use this influence toget a more business oriented and going concernoriented administrator appointed rather the “man nexton the court’s list”. It is hoped that this will improve thereliability and predictability of insolvency proceedings.Under the new regime, lenders will have theopportunity to form a preliminary creditors’ committeeand thereby enhance their influence on a proceeding.On the other hand, the strengthening of the debtorin possession concept and the newly established“Schutzschirm” regime will act to move the law closerto a debtor-friendly US concept. The “Schutzschirm”regime, a kind of pre-insolvency proceeding whichprovides an automatic stay before an administrator hasbeen appointed, will act to protect both the interestsof debtors and creditors at the critical time of distressbefore an insolvency appointment is made. In theory,both concepts should allow for more a successfulimplementation of “pre-packed plans”.The new insolvency law now also allows for amore classical US Chapter 11 style debt for equityswap to take place in an insolvency proceeding,allowing a cram down of the equity holders of acompany and allowing for a conversion of creditorclaims to shares in the company. This was previouslyunavailable as a restructuring tool in the Germaninsolvency regime, a notable omission in comparisonwith other jurisdictions. With the availability of thesetools, the German insolvency law has been broughtup to date to accommodate many of therestructuring tools and procedures which haveemerged throughout Europe over the last few years.Overall, the new law is, on paper, a significant stepforward in providing a more attractive, proactive anduseful tool in restructuring. For restructuringprofessionals, the new law provides the likelihood ofongoing involvement in cases which reach insolvency,where previously the advisors in place would havebeen replaced by an entirely new (and unfamiliar)team by the incumbent insolvency administrator.However, it remains to be seen whether the new lawwill deliver on its early promise in practice. Early casesclearly indicate that the new rules are being wellaccepted with Dura Tufting and Drescher being dealtwith under a DIP regime and with administrators forDraftext and ADA Systemhaus being “selected” by thelenders. However, there remain several flaws toinsolvency as a restructuring tool in Germany, evenunder the new regime. It remains to be seen whetherthese flaws will prevent the new law from deliveringthe promised benefits.In another round of changes to the Germaninsolvency law one might hope that, for example, aconcept of a “group insolvency” such as the“substantive consolidation” concept which exists underthe US Chapter 11 regime and a restructuring tool likea “Scheme of Arrangement”, as we know under Englishlaw, will be implemented. Overall, only experience withreal life cases will show if the changes to the law willhelp to remove the ongoing stigma of insolvency in96

www.pwc.de/sanierung-und-restrukturierungTurningadviceinto actionIts the people at PwC, our team of advisers and experts, who makerestructurings, we possess invaluable industry experience combinedvalue in restructuring cases please contact:Derik Evertzphone: +49 69 9585-5548derik.evertz@de.pwc.comJoachim Englertphone: +49 69 9585-5767joachim.englert@de.pwc.comPatrick Ziechmannphone: +49 211 981-7518patrick.ziechmann@de.pwc.comThomas Steinbergerphone: +49 89 5790-6443thomas.steinberger@de.pwc.com© <strong>2012</strong> PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft. All rights reserved.

Germany, where the association of a company/brandwith insolvency can have devastating consequences onthe company’s ability to continue to trade.Finally, the future of the over indebtedness test as aground to file for insolvency has not yet been decided.Omitted at the end of 20<strong>13</strong>, the decision is pendingas to whether the old test will be reinstated, theomission extended or the test is cancelled completely.Discussions are ongoing; however it appears clear thattemporary solutions are not very helpful in trying tosolve restructuring cases. A possible future change inthe definition of grounds to file for insolvency hasproven to be quite unhelpful where a looming overindebtedness could exist. One can only hope thateither way, a final solution is found soon; manyrestructuring experts certainly wish that the issue ofwhether over indebtedness as a ground to file forinsolvency will soon be put to rest.“Bankruptcy tourism” is out;“scheme of arrangement” is in?Over the last few years, there has been an increasingusage of the scheme of arrangement as a tool forrestructuring a company’s creditors, even forcompanies based outside of the UK. For example, inmany European companies the banking syndicateincludes significant lending from London branches ofthe major lenders, the resultant use of English law togovern the lending facilities can then be sufficient for ascheme of arrangement to be a relevant tool inrestructuring the creditors of the company.This can be an attractive proposition as thescheme of arrangement is not a formal insolvencyproceeding but a successful scheme is still sanctionedby the court and therefore legally binding. In addition,due to the requirements on voting rights/proportions,it is possible to circumvent the wishes of a minority ofa class of creditors where they have taken anopposing view on the restructuring. This is alsoespecially relevant in light of the latest court decisionsin Germany, where efforts to cram down bondholdersusing the new German “Schuldverschreibungsgesetz”have been blocked.As a result of these and other benefits, severalGerman companies have chosen the scheme as arestructuring tool including:• Schefenacker – where a scheme was used to cramdown the bond debt;• Primacom – where a scheme involved a cramdown of the senior debt; and• other notable cases such as Telecolumbus andRodenstock.In summary, as long as laws or current practicesprevent certain elements which the scheme ofarrangement is able to provide, it will remain anattractive option to companies and their advisors whoare looking for a restructuring solution.Enforcement – not such a bad thingafter all?A tool which has become increasingly popular in recenttimes has been the use of formal security enforcement– mainly on shareholdings. Here the secondary debtmarkets allow specialists to acquire enough of acompany’s debt to dominate the voting rights. As thecompany struggles and triggers proceedings under itsfacility documents (such as the breaching of a bankingcovenant), the specialist investor is able to enforce thesecurity of the company’s debt package and generate arestructuring which allows them to take an ownershipposition in the company by credit bid. Typically this toolhas been used where an underlying company is sound,but struggling in comparison to the scale of its debtpackage. The enforcement allows a restructuring of thecompany’s debt position, removing the burden andallowing the underlying company to flourish.Previously the use of this tool has been rare,however recent cases such as Primacom (whereenforcement was enacted similar to that describedabove) and Walter Services (where the threat ofenforcement alone was enough to force ashareholder agreement to the restructuring) havehighlighted the increasing propensity of this methodas a restructuring tool.As several specialists in this area have emerged andsuccessfully used this as a tool for restructuring andgaining an equity position in the “cleaned up” company,the restructuring industry will watch with interest tosee how the tool works out for the secondary investorin the long run.Where do we go from here?Overall, we expect secondary trading and distressedM&A to pick up. Distressed M&A cases might comefrom trustees (so called doppelnützige Treuhand), whichare still a very common instrument used by lenders to“restructure” a company. Deal flow should also beexpected to come from “zombie” companies left behindby the first wave of restructurings. More regular activityin the secondary debt markets is expected to continueto increase after a period of stagnation following theglobal financial crisis. In cases such as KlöcknerPentaplast, Monier, Bavaria Yachtbau and Stabilus,significant trading of the debt positions has occurredsuggesting that the distressed investors are regainingtheir appetites and looking to acquire further assets.The key question which remains unansweredrelates to the strategy of the German lenders inrestructuring. Will they adapt their approach to takeinto account the changes and developments98

mentioned above, or will they retain a more classicalconservative approach? Only time will tell, howeverthe forthcoming “maturity wall” and potential lack ofliquidity for refinancing of many companies will act as acatalyst in crystallising the strategy of German lenders.PwC firms help organisations and individuals create thevalue they are looking for. We are a network of firms in158 countries with close to 169,000 people who arecommitted to delivering quality in assurance, tax andadvisory services.With some 8,900 employees and a turnover ofaround €1.45bn, PricewaterhouseCoopers AGWirtschaftsprüfungsgesellschaft is one of the leadingauditing and consultancy firms in Germany. Experts at28 locations work on behalf of national and internationalclients of every size.Authors:Dr. Joachim Englert, PartnerTel: +49 (69) 9585 5767Fax: +49 (69) 9585 948291Email: joachim.englert@de.pwc.comLeo Smith, Senior ManagerTel: +49 (69) 9585 <strong>13</strong>02Fax: +49 (69) 9585 967510Email: leo.alastair.smith@de.pwc.comPricewaterhouseCoopers AGWirtschaftsprüfungsgesellschaftFriedrich-Ebert-Anlage 35-3760327 Frankfurt am MainGermanyWebsite: www.pwc.de99

Objective accomplished? Improving restructuring optionsin Germany through insolvency reform (“ESUG”)by Andreas Ziegenhagen, Salans LLPThe improvement of German insolvency law as far as corporaterestructurings are concerned has been demanded for a long time now. Atlong last, on October 27, 2011, the German Parliament finally passed therevised draft of the “Act for the Further Facilitation of the <strong>Restructuring</strong> ofCorporations (abbreviated as “ESUG” in German). This act comprises inparticular the following changes that have come into effect on March 1, <strong>2012</strong>.The new Act is intended to strengthen creditors’ rights, to expand the scopeof insolvency plan proceedings and also introduces a new protective shieldproceeding within self-administration (i.e. as a debtor-in-possession).Preliminary creditors’ committeeand selection of insolvencyadministratorUntil now, it has often been criticised that in Germanycreditors do not have any say or participatory rightsconcerning the selection of the insolvency administrator,a process which was regarded as being nontransparent.The new insolvency regime will provide fora stronger influence of creditors on the choice of acompetent insolvency administrator. From now on,courts must regularly appoint a preliminary creditors’committee upon receipt of a petition to commenceinsolvency proceedings, insofar as the debtor fulfills theminimum specifications required for a medium-sizedcorporation pursuant to § 267 sec. 1, 2 of the GermanCommercial Code (HGB).As a response to strong criticism that the minimumthresholds contained in the original draft of theGerman Federal Government were too low, therespective balance-sheet totals, turnovers andnumbers of employees were increased to €4,840,000on balance sheet total, to €9,680,000 turnover and toa minimum of 50 employees on average per year.A creditors’ committee will only be appointed if atleast two of these three prerequisites are met.However, under certain circumstances a preliminarycreditors’ committee can also be appointed in thecase of smaller corporations, particularly if the petitionof the debtor or a creditor already contains anappointment of certain persons as potential membersof the creditors’ committee and if their declarations ofconsent are submitted simultaneously.The preliminary creditors’ committee consists ofcreditors having a right of segregation, large and smallcreditors and at least one representative of theemployees. However, persons who become creditorsonly upon commencement of proceedings can also bemembers. In contrast to the opened insolvencyproceeding, where third parties (i.e. non-creditors)can be members of the creditors’ committee, suchthird parties cannot become members of thepreliminary creditors’ committee. The preliminarycreditors’ committee has the right to be directlyinvolved in the selection of an insolvencyadministrator. In case all members of the preliminarycreditors’ committee agree on a certain insolvencyadministrator, the court that has to appoint theinsolvency administrator may only reject the creditors’committee’s proposal if the suggested person isunqualified for such a role. In this context, it isimportant to investigate above all else the professionalindependence as well as the professional competenceof the nominated person.Under ESUG, the fact that a proposed insolvencyadministrator was nominated by the debtor or by acreditor or has given any general advice to the debtorbeforehand regarding the course of insolvencyproceedings does not in itself put the professionalindependence of that person at risk. This, howevermust be thoroughly examined when assisting in thepreparation of a “prepack” insolvency plan. In addition,in case the court has already appointed anadministrator prior to the appointment and hearing ofthe preliminary creditors’ committee on the basis ofthe urgency of the insolvency proceedings, thepreliminary creditors’ committee can, at its firstmeeting, elect another person as administrator byunanimous decision.Requirements to debtor’sapplication for insolvencyproceedingsThe lack of information from which the creditorssuffered before ESUG became law has been eliminatedto some considerable degree by changes in therequirements that a debtor’s petition to commence100

Facing challenges,-Contact

insolvency proceedings has to fulfil. Simultaneously, thesenew obligations of the debtor to furnish moreinformation are supposed to help the court in theappointment of a preliminary creditors’ committee asearly as possible. Thus, the filing debtor has to add to itsapplication a list of its creditors, regularly classifying thecreditors into distinct classes or groups. Thus, thedebtor’s application has to include details concerningthe amount of the debtor’s payment obligations, itsbalance-sheet totals, its turnover exposure and theaverage number of its employees. The debtor isrequired to affirm completeness and correctness of thisinformation.<strong>Insolvency</strong> plan and debt-to-equityswapNow, under ESUG, it is finally possible, using theinsolvency plan procedure, to affect the rights of thedebtor’s current shareholders and to convert creditors’claims into shares. Before ESUG, such a debt-to-equityswapwas only possible if the involved creditors gavetheir consent, making it virtually impossible to force acreditor to participate in a debt-to-equity-swap.Additionally, now under ESUG, an insolvency planprocedure is possible even in case of a lack of funds.Furthermore, measures such as, in particular, a capitalreduction and increase, the provision of assets in kind(Leistung von Sacheinlagen), the exclusion ofsubscription rights, or the payment of compensationto retiring shareholders are possible by virtue of aninsolvency plan. Potential “change-of–control”termination rights are not effective when a debt-toequity-swaphas taken place pursuant to an insolvencyplan. In addition, there are new limitations in forcenow curbing the rights to object and file an appealagainst an insolvency plan, which is intended toprevent a creditor from blocking the insolvency planand is supposed to tighten the proceedings to speedup the legally binding determination of the plan. Courtdriven approval proceedings shall now ensure that aconfirmed insolvency plan can be executednotwithstanding a pending appeal.Debtor in possessionUpon an application for a debtor-in-possessionproceeding (Eigenverwaltung, self administration),separate insolvency commencement proceedings with apreliminary trustee/custodian (Sachwalter) have nowbeen implemented in to German insolvency law viaESUG. Whilst in the past a court regularly orderedcertain measures protecting the debtor’s remainingassets from disposal during the period of thepreliminary opening proceedings, the competent courtshall now refrain from ordering such measures duringthe new commencement proceedings, i.e. the courtshall not prohibit disposals by the debtor (allgemeinesVerfügungsverbot) and shall not make such disposalssubject to the approval by a preliminary insolvencyadministrator.Furthermore, the German legislator has providedmore flexibility in a restructuring situation by offeringthe possibility for a subsequent debtor in possessionproceeding upon application of the creditors’assembly, if the debtor agrees. Any influence ofshareholders or existing controlling bodies(supervisory board, advisory board) on themanagement will be limited during the debtor inpossession period since the trustee/custodian(Sachwalter) as well as the creditors’ committee isrequired to control the debtor’s management onbehalf of the creditors.The new protective shieldproceedingsIn the newly implemented protective shield proceeding(Schutzschirmverfahren), which is based on and workssimilarly to the regular debtor-in-possession proceeding,the debtor has a chance to work out a restructuringplan under survey of a custodian (Sachwalter) withinthree months or less. This new protective shieldproceeding will only be available if at the time of filingthe motion for a protective shield proceeding, thedebtor is not illiquid and the intended restructuring isnot futile. These requirements need to be verified by acertificate of a tax advisor, auditor or lawyer, eachexperienced in insolvency law, or a person withequivalent qualifications.The underlying debtor in possession proceedinghas to be cancelled before the end of the threemonthperiod within which the plan has to beproposed, if the intended restructuring becomesimpossible, or the preliminary creditors’ committeeapplies for its cancellation by majority decision(according to heads) or if no committee has beenappointed, a creditor entitled to segregation or anunsecured insolvency creditor applies for itscancellation and circumstances are shown crediblythat the debtor in possession proceeding willpresumably lead to disadvantages for the creditors.The highly criticised provision originally included inthe draft Act, pursuant to which a protective shieldproceeding was to be cancelled if the debtorbecomes illiquid after filing of the application, wastaken out shortly before the vote in parliament andhas not become law. Additionally, pursuant to therevised Act, the court is now able to order, uponapplication of the debtor, that preferential debt can becreated during the protective shield proceedings. All inall the aim is to ensure that the debtor’s business canbe continued as a going concern under the protective102

shield proceeding and at the same time to promoteincentives to debtors to file a petition for thecommencement of insolvency proceedings at an earlystage. The protective shield proceeding can be inparticular ideal for financial restructurings in order toforce minority creditors that are obstructive or unableto act (e.g. securitised mezzanine programmes, etc.) torestructure by virtue of an insolvency plan.ResultIn conclusion it can be said that the Act offersadditional restructuring options for parties involved ininsolvency proceedings. However, there is still a lot ofroom for improvement when it comes to theframework conditions for restructurings under Germaninsolvency law. The insolvency plan should, for example,have the option to contemplate and affect third parties,regarding creditors’ claims vis-à-vis subsidiaries, in orderto allow the restructuring of a whole corporate group.In addition, the current statutory definition of over-indebtedness should apply beyond December 31, 20<strong>13</strong>in order to avoid such over-indebtedness to becomepart of an over-indebtedness status as per balancesheet. Moreover, the tax conditions, in particularregarding the use of losses, should be made morerestructuring-friendly.Author:Andreas Ziegenhagen, Managing PartnerEuropean Head of <strong>Restructuring</strong>, Reorganisationand <strong>Insolvency</strong> Practice GroupSalans LLPMarkgrafenstraße 3310117 BerlinGermanyTel: +49 30 26473 207Fax: +49 30 26473 <strong>13</strong>3Email: aziegenhagen@salans.comWebsite: www.salans.com103

Rehabilitation: A new restructuringproceeding for Greece 1by Stathis Potamitis, PotamitisvekrisGreece got its first Bankruptcy Code in 2007. The Code was welcomed bymany as a step towards a more debtor-friendly approach to insolvency withpriority afforded to restructuring over liquidation. The new Code introduceda version of the French conciliation proceeding (involving a mediator andleading, in successful cases, to a voluntary restructuring agreement) and areorganisation option as part of bankruptcy. Negotiations towards aconciliation agreement could obtain provisional protection under amoratorium order. Conciliation agreements could be filed for ratification andratified agreements automatically provide debtors with immunity fromindividual enforcement actions by all other creditors for a period of fouryears and protection from collective actions for one year.Bankruptcy reorganisation has hardly been usedat all since it came into effect. By contrast, conciliationhas been used very extensively but, in the vastnumber of cases, it has been used by debtors not tonegotiate with their creditors towards a speedyresolution of their liquidity problems, but as a way togain time and keep creditors at a safe distance. Inpractice, the proceeding has revolved around theprovisional standstill order which has becomedisassociated from negotiations and has become anend in itself.This has been happening while Greece has beensliding into a major recession and a debt crisis ofglobal proportions. Perhaps for that reason, Parliamentdecided to get rid of conciliation in favour of a newproceeding, rehabilitation, that is far more flexible thanconciliation, includes a cram-down feature, allowspre-packs as well as a quick liquidation proceedingstyled “special liquidation”.While the new statute, which came into forceon September 15, 2011, in many ways is animprovement over conciliation, the process ofrestructuring that it sets up or enables is still likelyto get bogged down in court proceedings andrequire more time than the life expectancy of mosttroubled debtors. In addition, the Greek economy hasbeen in well publicised turmoil, local banks are drainedof cash, local consumption has contracted while evenexports have become challenging because of thedifficulties that local entities encounter in obtainingtrade finance. The current extraordinary circumstancesrequire extraordinary measures. By that measure,the new provisions seem very modest indeed. At leastfor the short term, it would seem that debtors relyingon the newly available set of tools and solutions aremore likely to fail than be reinvigorated.Key features of rehabilitationQualifying debtorsRehabilitation can be accessed by debtors that areeither in a state of cessation of payments or suchcessation is imminent. Enterprises that have ceasedpayments may still apply to enter pre-bankruptcyprocedure provided that they also file a bankruptcypetition at the same time; thereafter the debtor’spetition as well as any bankruptcy petitions putforward by creditors are suspended during theprogress of rehabilitation and dismissed upon itsratification.Recovery optionsThe revised rehabilitation proceeding provides forseveral ways to deal with a troubled debtor. Arestructuring agreement that involves a qualifyingdebtor and is reached without any court involvementcan then be submitted for ratification. Uponsubmission, the court may also provide a standstillorder protecting the debtor from enforcementactions until the application hearing. The agreement inmany cases will involve the sale of assets of parts ofthe business and has already received the moniker“pre-pack”.Another option is for a qualifying debtor to submititself to the rehabilitation proceeding. This in turncreates several options. The debtor may seek theappointment of a mediator to push the discussionswith its creditors forward, or it may seek to handlethe discussions without the assistance of a courtappointed expert. Creditors can be addressed as acommittee or on an individual basis.The two alternatives noted above were the onlyrehabilitation options that the committee drafting thelaw revision had proposed. At the time when the billwas brought to Parliament, a last minute addition was104

introduced as a third rehabilitation option, styled“special liquidation”. As the name suggests, this optionconcerns liquidation of assets on an expedited basisand is intended to preserve going-concern value forthe debtor’s business to the maximum extent possible.Unlike the first two options, it does not flow out of anegotiated settlement and does not involve thedebtor’s consent. In addition, unlike the first twooptions, “special liquidation” does not leave the debtorin possession; on the contrary, a court-appointedliquidator takes over all aspects of the debtor’smanagement. “Special liquidation” is only available forlarge and medium enterprises (there are minimumquantitative criteria based on value of assets andoperating revenues) and, among other conditions, itrequires a showing that there is expressed interest(but not necessarily a binding commitment) topurchase the debtor’s assets and confirmation that theinterested party has the capability to finance such anacquisition. Certain other aspects of the proceedingmake it well suited to the needs of creditors whichare financial institutions.As can be seen even from the very rough outlineabove, the new rehabilitation process ranges fromconsensual restructuring to a liquidation proceedingthat is quite similar to bankruptcy (but lacks a numberof its weaknesses, and is likely to replace the normalbankruptcy proceeding for the larger debtors that mayconstitute a viable business if relieved of their debtand where the creditors are primarily financialinstitutions). Because of the significant differencesbetween the negotiated recovery and specialliquidation, in the remainder of this note rehabilitationrefers only to the two options that involvenegotiations (i.e. excluding “special liquidation”).The opening of proceedingsA debtor deciding to submit itself to the rehabilitationproceeding (i.e. commence negotiations with itscreditors), must file an application to court that givesinformation on the debtor and attached currentfinancial statements. In addition, the application must beaccompanied by an expert report including a list of thedebtor’s assets and creditors, making special mention ofits secured creditors. The expert is also required toopine on the financial situation of the debtor, marketconditions, the viability of the enterprise and whetherthe restructuring of the debtor shall adversely affect thesatisfaction of the debtors collectively. For legal persons,the statute specifies that the expert must be either abanking institution or an auditor (individual or firm).This stage of the overall rehabilitation proceedingpresents various practical difficulties; for instance, theproblems involved in providing any expert comfort ona debtor’s viability or impact of its restructuring on thecreditors prior to a workout agreement, are all tooapparent. It appears that the real function of this stageis to provide a peg for the issuance of preliminaryinjunctions, protecting the negotiating debtor fromcreditors’ enforcement actions.In our view, that need could also be served byproviding competent courts with the authority toprovide a debtor with a standstill order for up toseveral months’ duration upon its application anddeclaration that it qualifies for rehabilitation protectionand intends to commence negotiations with itscreditors (those requirements not being themselvesan issue for the court to decide). While one mayexpect that facilitating the availability of suchprovisional relief may foster abuse (see also thefollowing section), if the time frame is sufficiently shortand there are sufficient debtor constraints introducedas a result of the grant of such order (e.g. restrictingthe debtor to actions in the ordinary course ofbusiness and prohibiting any disposal of core assets orgrant of new security for existing debts), the provisionmay facilitate restructuring without exposing creditorsand other stakeholders to significant risks ofdissipation of assets or other similar prejudice.Skipping the hearing for the opening of theproceeding may be considered to deprive interestedparties from court access on a matter of substantialinterest. This is doubtful. The crucial questions that thecourt is required to address at that stage (viability andimpact on creditors) cannot properly be dealt with onthe basis of the information then available to thecourt. Therefore, the benefit in terms of due processmay be illusory while the cost in terms of time anduse of the very limited judicial resources may be verysubstantial, indeed.Provisional ordersThe application to open the proceeding may be, andin fact always is, accompanied by an application tothe same court for the provisional standstill order.The scope of the order is up to the judge but it usuallyprevents all enforcement actions against the debtor.The injunction applies to claims that arose until theapplication date but in special cases may range oversubsequent claims as well. The judge can also provideother relief for the protection of the debtor’s propertyfor the benefit of its creditors. Issuance of the order willautomatically prohibit the debtor from disposing of itsreal property and equipment. The judge also has beengranted the discretion, where there are serious businessor social reasons, to extend the standstill order tocover guarantors or other co-obligors of the debtor.These provisional orders lie at the core of courtpractice since the introduction of, first, conciliationand, then, rehabilitation. Debtors who are on theverge of insolvency (and frequently beyond) havelatched onto this provisional protection as a last105

minute opportunity to gain some leverage over theircreditors. In the past, prior to the most recentamendment of September 2011, debtors protected bythe standstill order had proceeded to dispose of asubstantial part of their assets and also to favourcertain creditors (more crucial to businessmaintenance or where default created greater legalrisks for managers) over the rest. There have beenliterally thousands of conciliation and rehabilitationapplications that in their vast majority neverdeveloped into restructuring negotiations.This perceived abuse of process led Parliament toconsider various amendments to the proceeding. Itwas suggested that the qualification criteria were tooloose (the conciliation statute spoke of severe financialdifficulties as the standard of qualification). Accordingly,the new requirement has been elevated to actual orthreatened (“looming”) cessation of payments. Thisseems inappropriate as it makes recovery availableonly to debtors that may be too distressed to benefitfrom a restructuring agreement. Another change is theprohibition of the sale of real property and equipment(regrettably, a vague term) by those under theprovisional order.These changes miss the main cause of statutorymalfunction, which is the excruciatingly slow pace ofthe Greek judicial process. An application for theopening of proceedings may take up to four months,which the decision to open may take an additional 30to 60 days. The statutory four-month negotiationperiod may be extended by a new application, whichwill take at least one month to be heard and may alsotake an equal period for the decision itself. In effect,the four plus one month standstill period which thestatute seems to provide on first reading is more likelyto last more than twice that. A whole year ofmoratorium at the cost of an application seems aterrific bargain especially for those that are less likelyto benefit from a restructuring. However, if the periodof actual protection were to be shortened to anactual four months and additional constraints were tobe imposed, as suggested in the previous section, boththe frequency and the impact of abuse wouldprobably be reduced.Content of the agreementThe agreement may provide for any address to thecauses of the debtor’s financial and operationaldifficulties, including without limitation:i. changes to the terms of debtor liabilities, such asextension of time, events of default, interest rate,replacement of interest payment by the right toparticipate in enterprise profits, conversion of debtsinto bonds, whether or not convertible into issuerequity, or the subordination of current creditors infavour of new creditors;ii. debt-for-equity swap, in combination or not with areduction of the debtor’s share capital;iii. agreements between creditors and equity holdersas to creditor priority, management matters,agreements as to the transfer of stock such asrights of first refusal;iv. write-offs or write-downs of claims;v. partial disposition of debtor assets;vi. the appointment of a third party to operate thedebtor’s business (including a lease of the businessfacilities and assets);vii. the transfer of the business in whole or in parts toa third party (including a company to whichcreditors have contributed their claims);viii. the suspension of individual enforcement actionsagainst the debtor for a certain period after theagreement’s ratification (for up to six months); andix. the appointment of a person to supervise theimplementation of the terms of the ratifiedagreement, and the designation of its powers andauthority in that capacity.The agreement must be accompanied by abusiness plan which forms a part of the overallagreement.Ratification of the agreementThe filing must include an expert opinion (issued by abank or an auditor), certifying that the agreement hasbeen signed by the requisite majority of creditors, thatit renders the debtor viable and takes it out ofcessation of payments, does not adversely affect thecollective satisfaction of creditors, treats creditors of thesame rank equally or whether any divergence fromsuch equal treatment is necessary for serious businessor social reason.It should be noted that Greek law, especially sincethe onset of the current crisis, has given certain typesof creditors significant preference over all others. Inparticular, employees and pension funds are entitledto have their claims satisfied in priority to all othercreditors, including secured creditors. In practice, anagreement which anticipates a significant reduction inthe amount of employee and pension fund claims mayhave great difficulty in receiving ratification.Consequences of ratificationAn agreement rendering the debtor viable, treating allcreditors of the same type equally and not putting anynon-consenting creditor in a worse position that itwould have been in a bankruptcy liquidation of thedebtor, shall be ratified and as such will bind on allcreditors, whether consenting or not.The ratification of the restructuring agreement hasno impact on third-party securities, whether personalor in rem. The same applies to co-obligors; theirliabilities are not affected by any reduction or otheralteration of the liabilities of the debtor.106

One consequence of the ratification that hasquickly become very controversial is that it releasesthe debtor’s manager from criminal liability for thenon-payment of post-dated cheques or delay inpayment of certain liabilities (taxes and social securitycontributions). Because of rampant evasion of taxes(especially VAT) and social security contributions andconcerns over likely failures to pay salaries in a timelymanner, Greek law sees such failures as criminalviolations that burden management in person. Duringthe discussion of the recovery statute, it wasconsidered that such liability should no longer attachto management after the ratification of a restructuringplan. When, on that basis, managers in a number ofcases recently sought to rely on that subsequentexoneration to avoid prosecution altogether, it wasfelt that the release from liability at the time ofratification was overly generous and contrary to theprinciple of equality before the law.The “special liquidation” as an additionalprocedureAs previously noted, the “special liquidation” proceedingapplies exclusively to medium and large enterprises, andcan be commenced without debtor participation. Inorder for the creditors to seek to place a debtor under“special liquidation” it must satisfy at least two of thethree following criteria: the value of its balance-sheetassets must be at least equal to €2.5m, its net turnovermust be at least €5m and it must have employedin average during the relevant financial year at least50 persons.An application must be accompanied by adeclaration of a bank or an investment services firmthat there is a solvent investor interested in acquiringthe debtor’s asset as a whole, that there is a qualifiedperson willing to accept appointment as “specialliquidator” and that the cost of the “special liquidation”can be covered by funds that are made available forthat purpose. The “special liquidator” is then requiredto inventory the assets of the enterprise and conducta public auction of the whole of those assets or ofparts of them that constitute operating divisions ofsuch whole. The statute sets out the process in detailand requires that the “special liquidation” becompleted and the assets sold off within 12 months(which, however, the court can extend for anadditional six months).Note:1I have had the opportunity to cover much of thesame ground in several recent articles; an article Ico-authored with Dr. Alexandros Rokas, which hasbeen submitted for publication in the Journal ofBusiness Law, an article co-authored with Mr.Theodoros Athanassopoulos to be published byINSOL World, and, on the more specialsed matterof the uses of restructuring tools in privatisation ofstate-owned enterprises, “A New Approach toPrivatisation: An Unexplored Option for Greece inPrivatising Troubled State-Owned Enterprises”,published in International Corporate Rescue byChase Cambria Publishing, jointly with Steven T.Kargman. I would like to thank Alexandros,Theodoros and Steven for their guidance andinsight; naturally none of them is responsible for anymistakes in this article.Author:Stathis Potamitis, Managing PartnerPotamitisvekris9 Neofytou Vamva str.10674 AthensGreeceTel: +30 210 33 80 001Fax: +30 210 33 80 020Email: stathis.potamitis@potamitisvekris.comWebsite: www.potamitisvekris.com108

Winding-up proceedings of financialundertakings in Icelandby Heidar Asberg Atlason and Gunnar Thor Thorarinsson, LOGOS legal servicesIn the autumn of 2008, the Icelandic financial system faced severe difficultieswhich culminated in the country’s three largest banks, Kaupthing Bank(Kaupthing), Glitnir Bank (Glitnir) and Landsbanki Islands (Landsbanki)(together referred to as the Banks), being taken over by the IcelandicFinancial Supervisory Authority (FME) in October 2008. This was followingthe enactment of Act No 125/2008 on the Authority for TreasuryDisbursements due to Unusual Financial Market Circumstances etc. (theEmergency Act) by the Icelandic Parliament.The legal framework for the Banks and other financial institutions inIceland is set out in Act No 161/2002 on Financial Undertakings (AFU), whichimplements certain EU legislation in accordance with Iceland’s obligationsunder the Agreement on the European Economic Area (EEA). The winding-upof the Banks is governed by the AFU and Act No 21/1991 on Bankruptcyetc. (BA).As the collapse of the country’s entire financial system was unprecedented,Icelandic law was in many ways inadequate to deal with bankruptcies on sucha scale. This has required the legislator to react to various issues, some ofwhich required an urgent response. For instance, the AFU has been amendedseveral times since October 2008. The most extensive amendment, Act No44/2009, covers financial reorganisation, winding-up and merger of financialundertakings. Directive 2001/24/EC, on the reorganisation and winding-up ofcredit institutions (the Directive), has been implemented into the AFU as apart of the obligations of Iceland under its EEA obligations.This chapter will provide a brief overview of the winding-up proceedings ofthe Banks and the possibility of concluding the winding-up through composition.Winding-up proceedingsIn 2009 creditors of the Banks were invited to submitproof of their claims within an announced claims filingperiod. Contrary to bankruptcy legislation in variousother jurisdictions, claims that are not filed before afixed deadline are cancelled according to the BA.The affairs of the Banks are administered byWinding-up Boards (WUBs) which control thewinding-up proceedings, i.e. handling the Banks’ assetswith the aim of maximising their value, resolving claimsagainst the banks, making distributions and, possibly,proposing composition with creditors.The WUBs shall endeavour to obtain as high a valueas possible for the Banks’ assets, for instance, by waitingif necessary for outstanding claims to mature ratherthan realising them at an earlier date. This includes thepossibility of holding on to and supporting a significantasset rather than selling it. To this end, a WUB maydisregard a resolution passed by a Creditors’ Meetingthat it considers contrary to this objective.The creditors of the Banks receive regular updateson the winding-up in Creditors’ Meetings. Soon afterthe Banks were taken over by the FME in October2008, Informal Creditor Committees (the ICCs) wereestablished for each of the three Banks. Although theICCs have no official standing, they meet regularly andconsult with the WUBs.If the assets of a financial institution do not sufficefor full payment, the winding-up may be completed inone of two ways, either with the approval by creditorsof a composition agreement or with the Bank beingput into insolvent liquidation. One of the primary aimsof recent amendments to the AFU is to simplify thisprocess and increase the likelihood of the winding-upto be completed with a composition agreementinstead of the Banks being put into liquidation, whichcould lead to a significant deterioration of the value ofthe assets of the Banks.The assets of the BanksThe assets of the Banks consist of loan portfolios andequity in various undertakings, both in Iceland andabroad. Whilst it is anticipated that the majority of theassets of Landsbanki will be consumed to settle claimsof its priority creditors, it appears evident from officialinformation presented by Kaupthing and Glitnir that109

their creditors stand to receive noteworthydistributions. As a result, the WUBs of Kaupthing andGlitnir have publicly announced that they aim toconclude the winding-up by proposing a compositionagreement with creditors.CompositionA prerequisite for a composition according to theBA and the AFU is that secured claims and priorityclaims have been settled or at least sufficient reservesmade to meet such claims. Any remaining balancecan be subject to a composition agreement betweencreditors holding general claims (Composition Claims).A composition agreement for the Banks wouldbe based on the BA and the AFU and entailscreditors accepting a partial (de minimis) paymentagainst their Composition Claims.There are various hurdles and challenges toovercome in order to achieve composition, not leastdue to the vast number of creditors and the fact thatthe legislation did not anticipate the collapse of thenation’s banking system in its entirety.Composition proposalAccording to the BA and the AFU, the WUB shallpresent a composition proposal, stipulating to whatextent it intends to offer payment of the CompositionClaims and in what form. A deviation from theprinciple that all creditors stand to receive equaldistributions is the possibility of deciding the paymentof de minimis claims in full.A composition proposal, approved in a meeting(Composition Meeting) by a requisite number of votesof creditors (see Voting below) and confirmed by thecourts, constitutes a legally binding agreementbetween the Banks and its general creditors in respectof the settlement of all of its unsecured claims.Composition entitlementsWhilst a composition agreement can take differentforms depending on the circumstances each time, thecomposition planning for the Banks is likely to bemore complex than in regular compositionagreements. Composition agreements for the Banksmay comprise of cash payments (including de minimispayments) and issue of new shares in the Banks andloan notes (presumably both senior notes as well asconvertibles). In essence, the aim would be to conveyall the economic interest (after the settlement of theclaims of secured and priority creditors) and fullcontrol over the Banks to its general creditors.ControlThe transfer of economic interest and control to thecreditors of the Banks would eliminate agency issues(i.e. the lack of sufficient link between economicinterest and control) inherent in the winding-up byallowing the creditors, in their capacity asshareholders, to implement a governance structure oftheir own choice. It would enhance operationalflexibility and the ability to restructure the business.However, the role of the WUBs post-compositionis unclear as the AFU can be seen to anticipate thatthe WUBs will assert some authority while disputesare still on-going and composition entitlements havenot been distributed in relation to disputed claimsuntil these have been settled. Unless the role andscope of any authority of the WUBs post-compositionis clearly defined in relation to the composition of theBanks, either through legislation or in the compositionagreements, this could potentially cause tensionbetween the board elected by the then shareholderson the one hand and the WUBs on the other hand.VotingCreditors holding Composition Claims are eligible tovote in relation to a composition agreement, both inperson and by proxy, unless specific exemptions apply.The voting needs to fulfil two approval thresholds:1. a value threshold – 60% or, if higher, the samepercentage of votes as the proportion of claims tobe written off according to the compositionagreement, where the denominator comprises thetotal amount of claims held by eligible votes; and2. a headcount threshold – 70% of the creditorsactually casting their votes, which gives small claimsa significant influence. It is possible to significantlyreduce the number of headcount votes withpayment of de minimis claims.More than one Composition Claim held by thesame creditor will only count as one for headcountpurposes. This may also apply in respect of claims heldby a trustee, although this could potentially be subjectto dispute. Further, headcount cannot be increased bytransfer of claims and it could be argued that transfersmight decrease the headcount.Late claimsAlthough the BA is clear regarding the preclusiveeffect of failure to submit proof of claim before thedeadline, the interaction between the BA and theAFU in relation to the effect of failure of creditors tosubmit claims in winding-up is complex and unclear. Itis expected that the position of late claims incomposition will be clarified in a judgment from theIcelandic Supreme Court in the first half of <strong>2012</strong> inthe case of ALMC hf. (formerly Straumur InvestmentBank) v Stapi Pension Fund.Capital controlsFollowing the collapse of the Icelandic banking systemin the autumn of 2008, foreign exchange transactionshave been subject to capital controls, which have nowbeen incorporated into Act No 87/1992 on ForeignExchange, as amended with Act No 127/2011 andAct No 17/<strong>2012</strong> from March <strong>13</strong>, <strong>2012</strong> (the “currency110

Efstaleiti 5103 ReykjavíkIceland5 400 3005 400 301A Living LegacyLOGOS provides companies and institutions with legal advice basedupon the firm’s legacy of practice since 1907. While our founder,Mr. Sveinn Björnsson, went on to become the first president of Iceland,his practice kept growing. LOGOS has become a leading Icelandic lawfirm with successful international outposts.LOGOS specializes primarily in corporate and commercial law providingservices for both the international business community and local corporateclients requiring international legal assistance.42 New Broad StreetLondon EC2M 1 JDEngland+44 (0) 207 920 3020+44 (0) 207 920 3099Lautrupsgade 7, 4th floor2100 CopenhagenDenmark+ 45 70 229 224+ 45 70 274 279logos@logos.iswww.logos.isOur teams in Reykjavík, London and Copenhagen use well defined internalprocedures to offer excellent and efficient legal advice.LEGAL SERVICESSINCE 1907

ules”). The Banks will require an exemption by theCentral Bank of Iceland from the currency rules inrelation to the proposed composition agreements, i.e.to make any proposed payments of cash and/or anyinstruments, as well as facilitating its continuedoperations and support to its assets post composition.TimelineThe preparation for the composition of the Banksconsists of various work streams, both legal andcommercial. The BA and the AFU stipulate a certainsequence of events and time limits to pass betweenthose events. The launch of the composition proposalmarks the official start of the process which is finalisedwith the announcement of the conclusion of thecomposition proposal. The formal compositionprocedure can last from eight weeks but up to morethan 20 weeks, depending on procedural challenges,etc. However, the timeline is primarily dictated bypractical and commercial issues. The WUBs are incontrol of the preparation although they will ensurethe requisite support of the main creditors’constituencies, such as the ICCs, before presenting acomposition proposal.Trading with claimsAs a general rule under Icelandic law, claims againstthe Banks are freely transferable. However, the Bankshave adopted a specific procedure to recognise thetransfer of claims. The WUBs have published theirconditions for transfers, such as that both buyer andseller shall notify of the transfer, a transfer requestform is completed, and a fee paid. When transfershave been completed in accordance with theprocedure stipulated by the Banks, the WUBs willupdate their lists of claims to reflect the newownership of claims.If claims are transferred without regard to theprocedures set by the Banks, the transfers are notregistered with the WUBs and any dividends, votingrights or other entitlements of the holder is grantedto the registered holder of the claim, who would thensupposedly be under a contractual duty to pass thoseon to its counterparty, but without any rights orrecourse to the relevant Bank.It is likely that the WUBs will suspend trading withclaims, i.e. stop acknowledging transfers in advance ofthe Composition Meeting, just as they have donebefore ordinary Creditor Meetings.LitigationThe vast magnitude of the collapse of the Banks andthe financial interests involved has put Icelandiclegislation under intense scrutiny and instigatedlitigation both in Iceland and abroad.In Iceland, one of the most important questionswhich has been addressed by the courts is thelegitimacy of the Emergency Act, which, amongstother things, altered the order of priorities and placeddepositors (including UK and Dutch “Icesave”depositors as well as wholesale depositors, such asseveral UK and Dutch local authorities) in apreferential status over general creditors. The IcelandicSupreme Court confirmed that the legislation wasjustified inter alia with reference to the unprecedentedeconomic problems that Iceland faced and the needto maintain trust in that deposits would be safe andthus prevent the total collapse of the country’sfinancial system.The granting of preference status has led todisputes in relation to the scope and definition ofdeposits. The Icelandic Supreme Court has ruled thatan advisory opinion should be sought from the EFTACourt to clarify the definition of money marketdeposits. In a separate case an advisory opinion is alsobeing sought from the EFTA Court in relation tospecific instances of an alleged inconsistency betweenthe Directive and the AFU. European directives andother secondary legislation of the EEA are not directlyapplicable in Icelandic law; and nor are advisoryopinions of the EFTA Court binding upon Icelandiccourts. However, there is a legal requirement thatIcelandic law and rules be, as applicable, interpreted inaccordance with the EEA Agreement and itssecondary legislation.Further, extensive litigation has been concludedand is pending on various procedural matters.Outside of Iceland, questions have been raised inrelation to the applicability of the Icelandic winding-upproceedings in other jurisdictions and whether theDirective has been properly implemented intoIcelandic law. Notable cases include a judgment by theFrench Court of Cassation from February 14, <strong>2012</strong>,which revisited a ruling by the Paris Court of Appealsin relation to the legitimacy of the winding-up ofLandsbanki. The Court of Cassation stayed the casepending a ruling of the European Court of Justiceregarding questions in relation to whether specificprovisions of the AFU and Act No 44/2009 compliedwith the Directive. Further, in a decision of the EnglishHigh Court of Justice of England and Wales fromMarch 16, 2011, in relation to Kaupthing, claimantswere not prohibited from pursuing their claims in theEnglish courts on the basis that, at the time theproceedings were issued, Kaupthing was not in aDirective-compliant reorganisation measure and therewas no other reason to stay the proceedings. Thisdecision was followed by the decision of the EnglishHigh Court from October 18, 2011, which cast doubton, although ultimately could not go against, thedecision from March 16, 2011 that Kaupthing was not112

in reorganisation compliant to the Directive. Othercases have dealt with specific questions in relation toconflicts of law issues in the context of set-off etc.Concluding remarksThe winding-up proceedings of the Banks have raisedvarious broad issues in relation to cross-borderinsolvencies and winding-up of financial institutions, aswell as narrower matters, such as settlement ofcomplicated financial instruments. Various impedimentson the AFU and BA have been identified throughlitigation which has resulted in amendments to thesestatutes. Some of the issues are not only relevant toIceland but are of direct relevance in foreignjurisdictions.The Banks are important institutions in Iceland,despite being in winding-up. Among their single largestassets are the principal commercial Icelandic banks,Islandsbanki (95% owned by Glitnir), Arion Bank(87% owned by Kaupthing) and Landsbanki (18%owned by “old” Landsbanki). Through their ownershipin the new commercial Icelandic banks, the Banks aresignificant stakeholders in most aspects of the Icelandiceconomy. Finally, it is expected that the creditors ofthe Banks will receive part of their dividends inIcelandic króna (ISK), which they will be preventedfrom converting into foreign currencies due to thecapital controls described above.In light of the significant financial interests vested inthe Banks and the resurrection of the Icelandicfinancial system, the conclusion of the winding-upproceedings of the Banks through distributions tocreditors and/or composition of individual Banks is ofgreat importance to the creditors and investors. Atthe same time, the significance for the Icelandiceconomy and population cannot be underestimated.Authors:Heidar Asberg Atlason, PartnerEmail: heidar@logos.isGunnar Thor Thorarinsson, Senior AssociateEmail: gunnar.thorarinsson@logoslegalservices.comLOGOS legal servicesEfstaleiti 5103 ReykjavíkIcelandTel: +354 5 400 300Fax: +354 5 400 301Email: logos@logos.is42 New Broad StreetLondon EC2M 1JDUKTel: +44 207 920 3020Fax: +44 207 920 3099Email: logos@logoslegalservices.comLautrupsgade 7, 4th floor2100 CopenhagenDenmarkTel: +45 70 229 224Fax: +45 70 274 279Email: logos@logoslaw.dk1<strong>13</strong>

Ireland – Corporate debt restructuring: Solutionsin a distressed marketplaceby Billy O'Riordan and Declan McDonald, PwC IrelandWhile a liquidity squeeze, an absence of buyer confidence and uncertaintygenerally have resulted in depressed market conditions over recent years,there are now some signs of increasing interest from foreign investors indistressed Irish trading businesses. Against this backdrop, the major Irishbanks are providing significant capital and allocating internal resources tomanaging and restructuring their corporate loan books. Banks, andborrowers, are conscious of the need to formally restructure their debts inorder to build, equip and sustain viable businesses for future growth. Thisarticle explores a number of the formal insolvency procedures available toboth banks and corporate entities in restructuring corporate debt.The two main formal insolvency procedures availableto companies in restructuring their debts arereceivership and examinership. While the basicremedies available through both procedures remainunchanged, variations of each procedure are emergingin an Irish context, with the principal benefit being thepreservation of value for stakeholders, whether theyare investors, creditors or employees.Both insolvency procedures are governed by theCompanies Acts 1963 to 2009, the Rules of theSuperior Court and case law.Pre-pack receivershipA pre-pack process is one which has been usedincreasingly in the UK but has not achieved the samelevel of notoriety in Ireland to date.A receiver is typically appointed by a debentureholder and will take possession of the company assetssubject to the debenture holder’s charge. Often, thedebenture will provide for the receiver to manage thecompany’s business prior to its sale. A pre-packagedreceivership is a sale of all or part of the business andassets of an insolvent company which is negotiatedbefore enforcement, and concluded shortly after thereceiver is appointed. A buyer is identified beforeappointment, valuations are agreed and a contractdrafted to enable the assets to be sold shortly afterthe appointment of the receiver.Prior to the appointment of a receiver, a numberof activities are undertaken to prepare for theimmediate sale of the business upon appointment,including sourcing potential purchasers, seeking offers,undertaking due diligence and negotiating the termsof the sales contract. The contract is not completeduntil the receiver is appointed.The key goal of any pre-pack receivership is thepreservation of goodwill. In sectors where customerconfidence is fragile, trading during a traditionalreceivership, with all the associated uncertainty, hasthe potential to undermine the business, as bothcustomers and suppliers become reluctant to maintaincommercial relationships. When a pre-packreceivership works well, the goodwill of the businesstends to remain relatively undamaged.Advocates of pre-packs claim they avoidprotracted insolvency periods and protectemployment within companies that are viable but arecarrying historic debt they cannot afford. Pre-packadministrations have become relatively commonplacein the UK, where the professional bodies in 2009issued formal guidance to insolvency practitioners(Statement of <strong>Insolvency</strong> Practice number 16 (‘SIP16’)) to improve the transparency of the process andprovide creditors with greater access to information.A pre-pack receivership is, however, likely to giverise to a number of issues:(i) there is a perceived lack of transparency to theprocess;(ii) unsecured creditors remain unrepresentedthrough the process;(iii) the process is exposed to the threat of anexaminership application; and(iv) there will be a stigma if the existing owner ormanagement team is buying the business.The receiver has specific statutory duties undersection 316A of the 1963 Companies Act, whichstates that:(i) the receiver must achieve the best pricereasonably obtainable at the time of sale; and(ii) the receiver must not sell by private contract anon-cash asset of a company to a person who is,or who, within three years prior to the date ofappointment of the receiver, has been, an officer ofthe company unless the Receiver has given 14114

days’ notice of his intention to do so to allcreditors of the company who are known to himor who have been intimated to him.These statutory duties are the main reasons whypre-pack receiverships have not generally been arrangedunder Irish law. It is imperative that the receiver obtainsexpert legal and valuation advice to comply with hisstatutory duty to “obtain the best price reasonablyobtainable”. In a share receivership, the receiver cancircumvent the second statutory duty regarding sale of anon-cash assets to a related party since the definition ofa non-cash asset states that “For the purposes of thissection, a non-cash asset is of the requisite value if at thetime the arrangement in question is entered into itsvalue is not less than €1,269.74, but subject to that,exceeds €63,486.90 or 10% of the amount of thecompany’s relevant assets.” Typically shares in an insolventcompany are likely to have a value less than the requisite€1,269.74 value as stated in the definition as laid out inthe Companies Acts.Breach of a receiver’s statutory duties may result inthe receiver being held personally liable for any lossincurred. While SIP 16 does not apply in Ireland, it isarguable that its provisions may act as guidelines forreceivers pursuing a pre-pack process in Ireland. Theseguidelines can mitigate the risks in a pre-packreceivership by ensuring that:(i) independent valuations of all assets are performedby third-party professionals;(ii) alternative exit and/or sale options are consideredprior to concluding a sale;(iii) efforts are taken by the Receiver and companymanagement to consult with creditors; and(iv) the connection between the insolvent companyand the investor/purchaser is clearly understoodand assessed.Each pre-pack receivership requires theidentification of an appropriate investor, negotiationand agreement of terms of sale and accelerated duediligence to implement a transaction. In an idealscenario this process will be supported by both thesecured creditor(s) and the management of thecompany, who are likely to have a key role in thefuture of the company after sale of the assets. The keyissues to be considered prior to the closure of anysale include determining the status and obligations ofonerous contracts, dealing with critical creditors andthe Transfer of Undertakings (Protection of Employee)Regulations. Recent cases in the Irish context highlightthe importance of securing the support of companymanagement prior to the appointment of the receiver.One of the few pre-packs in Ireland was the sale ofthe Superquinn supermarket chain by the receiver in apre-pack deal. This pre-pack proved to be veryeffective and ensured the preservation of 2,800 jobsand the continuation of the business. In this case aspecial €10m supplier fund was set up as part of thesales agreement to pay certain unsecured tradecreditors. The success of this pre-pack last year maypave the way for further pre-pack receiverships inIreland in the future.Sale of debtThe option may also exist for the bank, as the securedcreditor, to sell its debt to an investor prior to theappointment of a receiver, thereby removing thesecured creditor’s requirement to fund thereceivership period. The investor will subsequentlyappoint a receiver to implement the sale of thebusiness.Accelerated examinershipThe 1990 Companies Act introduced the concept ofexaminership to enable insolvent companies toexplore all opportunities for their survival in aninclusive process. Under this legislation, when anexaminer is appointed, the company is placed underthe protection of the High Court for a maximumperiod of 100 days while the examiner seeks toformulate a scheme of arrangement with thecompany’s creditors.A petition for examinership must be supportedby a report of an independent accountant. Theindependent accountant’s report contains extensivedetails regarding the affairs of the particular companyand a statement of opinion, supported by sufficientevidence, as to whether the company and the wholeor part of its undertaking would have a reasonableprospect of survival as a going concern and astatement of the conditions necessary for suchsurvival. The report of the independent accountant iscritical in any examinership petition and in recentcases the courts have scrutinised the contents ofthese reports.An examinership has many advantages, including:(i) the transparency of the process;(ii) the statutory protection afforded to securedcreditors in the process;(iii) the automatic stay on collection efforts by othercreditors; and(iv) the binding effect of a scheme of arrangement onall creditors, once sanctioned by the court.The number of examinerships in Ireland hasdecreased significantly since 2008 to just 16examinerships in 2011. This reflects the scepticism ofthe courts and the reluctance by companies to applyfor protection in light of the higher bar for acceptanceand perhaps most critically the lack of availableinvestment funding, which is often key to the successof the examinership process. Examinership is not an115

appropriate relief in many situations, and it is possiblethat the process is not very popular due to itstechnical, legal and potentially costly nature. As acorporate restructuring option however, anaccelerated form of the examinership process mayemerge as a mechanism to restructure debt andattract equity investment.With the benefit of detailed planning, the period ofHigh Court protection can be significantly reduced.Heads of terms must be agreed with an investor anda proposed scheme of arrangement must beformulated prior to petitioning the High Court forprotection. Detailed planning through this process mayreduce the length of the examinership processsignificantly, with the possibility of the High Courthearing and the scheme of arrangement taking effectwithin weeks, as opposed to three months.In any examinership the role of the company'sbank(s) needs to be carefully considered. In somecases, the bank(s) will actively support anexaminership as being the best way for the companyto move forward. However, an examinership can alsowork to the significant disadvantage of the securedcreditor because it will (a) have a very limited role inthe process of restructuring the company’s finances;(b) be prevented from taking action to collect thedebt and enforcing its security during the protectionperiod; and (c) be exposed to all expenses of theexaminer having ‘super-priority’ over the claims ofsecured creditors.Banks are likely to take a commercial andpragmatic view as to whether they should support anexaminership process. Prior to 2008, the actual marketvalue of the assets securing a bank's debt hadgenerally not fallen below the book value of thedebt, so there was little need for banks to agree towrite off any portion of their debt. However, given thedramatic decline in property values in Ireland, it islikely that, in future examinerships, banks will be forcedto accept write downs of their debts to the actualmarket value of the security held. Such write downswill of course merely reflect commercial reality. Whilethe bank(s) may be obliged to write off a portion ofthe debt due from the company, any personalguarantees held in respect of the debt so writtenoff, will remain in place, and may be called upon bythe bank.In 2011 in the High Court decision of theMcInerney Group, the High Court ruled for the firsttime that proposals for a scheme of arrangement,entailing payment to a secured creditor of a writtendown sum in full satisfaction of its debt, could beapproved. The written down value of the debt mustreflect or be in excess of what the Court considers tobe the market value of the security held. The maincriterion for assessing whether the scheme is unfairlyprejudicial to the interests of the secured creditor iswhether the secured creditor would do better in thealternative (i.e. receivership) or any other methodby which its security could be realised. In theMcSweeney Dispensers Limited case at the endof 2011, an indicative proposal by the existingprincipal shareholder was lodged to support thepetition to appoint an examiner. However anobjection to the petition was lodged by the securedcreditor in this instance on the basis that the existingshareholder is seeking to retain control of thecompany through the examinership process. In hisjudgement, Justice Clarke emphasised that it is theduty of the examiner to properly and fully advertisefor potential investment, that the examiner isexpected to pursue all realistic lines of potentialinvestment and not just those which may come fromthe existing shareholders and that it is the duty ofthe examiner to unearth other investors willing to putup greater funding.Ultimately, an accelerated form of examinershipcan only be achieved where the secured creditor(s) issupportive of the process.Other optionsIn the event that new investment for a companycannot be secured, the company’s bankers may beagreeable to some form of debt to equity conversion,whereby the bank converts part of its debt intoequity in the company. This has been to date arelatively rare phenomenon in Ireland. Some lendersare now taking a medium-to-long term approach withcash-generating indebted businesses and are engagingin debt-for-equity swaps as a way of dealing withnon-performing loans, rather than engaging in a forcedsale of business assets.Debt-for-equity swaps can offer a lifeline tostruggling businesses, free up cash-flow, protectemployment and allow companies to grow. From acompany’s perspective, such balance-sheetrestructurings can have a significantly positive impactby enabling it to continue to trade and competemore effectively with a reduced debt burden.Furthermore, while the insolvency measures discussedabove will realise only partial value for certaincreditors, a debt-for-equity swap has the potential tocreate long-term appreciation in value for allstakeholders.It will be interesting to monitor future trends inthis area of corporate restructuring, as debt-for-equityswaps also have the potential to present a number ofdifficult issues for banks. The time and resources whichmust be invested in a formal procedure-based debtfor-equityrestructuring can be considerable, and in116

practice it may be difficult to align the competing aimsof the company and the secured creditor. The degreeof board involvement required by the secured creditorand ongoing shareholder oversight are other factorsto be considered by the secured creditor in appraisingany debt-for-equity restructuring.SummaryGiven the fact that each individual restructuringprocess will have direct consequences for multiplestakeholders (shareholders, directors, employees, banksand other creditors), it is important for both thesecured creditor(s) and the directors of an insolventcompany to source restructuring advice fromexperienced legal, accounting and corporate financeprofessionals in order to assess all available options.All parties need to adopt a proactive approach tothe corporate debt restructuring process and allstrategic options will need to be evaluated early inthe process. This should facilitate the selection of anappropriate restructuring process and maximise valuefor all stakeholders.Authors:Billy O’Riordan, PartnerCorporate Recovery and <strong>Insolvency</strong>Email: billy.oriordan@ie.pwc.comDeclan McDonald, DirectorCorporate <strong>Restructuring</strong> and <strong>Insolvency</strong>Email: declan.mcdonald@ie.pwc.comPwC IrelandOne Spencer Dock, North Wall QuayDublin 1, IrelandTel: +353 (1) 792 6092Fax: +353 (1) 792 6200Website: www.pwc.com/ie117

Italy – Settlement of over-indebtednesscrisesby Prof. PierDanilo Beltrami, Ph.D., Lombardi Molinari e Associati Law FirmGrowing debt among private individuals and households as a result ofincreasingly resorting to consumer credit has brought about the need for thedevelopment of an appropriate legal tool to allow them to obtain some formof debt discharge in an over-indebtedness crisis, i.e. in case the debtor isobjectively no longer capable to meet his/her credit commitments.By Law Decree No 212 of December 22, 2011, subsequently enacted asLaw No 3 of January 27, <strong>2012</strong>, effective as from February 29, <strong>2012</strong>, the Italianlegislator, in acknowledging that need, introduced the possibility in the legalsystem to decide civil insolvency in such a way as to allow a debtor noteligible for standard insolvency procedures to overcome his/her debt crisisthrough a procedure having characteristics similar to those of debtrestructuring arrangements under Article 182-bis of Royal Decree No 267 ofMarch 16, 1942 (the “Bankruptcy Act”). In other words, following the entryinto effect of the new provisions, individuals precluded from having access tostatutory insolvency procedures have been allowed to submit a proposal totheir creditors for an agreement based on a plan assuring contractualperformance and due payment.Not unlike the case with the insolvency proceduresunder the Bankruptcy Act, a debtor wishing to use thenew procedure for the settlement of an overindebtednesscrisis must meet two requirements – asubjective one and an objective one.About the first requirement, Article 7(2)(a) of LawNo 3 of January 27, <strong>2012</strong> requires that the debtor benot eligible for any insolvency procedures currently inforce. This is patently a negative definition, whichembraces a number of different classes of debtors,such as natural persons, private individuals and anybusiness entities not exceeding the size limits set forthin Article 1 of the Bankruptcy Act at the time of filinga proposal for agreement. Others who are allowed toaccess to the procedure are individuals engaging inintellectual professions, whose economic activity ischaracterised by the use of an organised whole ofassets and legal relationships. Further, Article 7(2)(b)of Law No 3 of January 27, <strong>2012</strong> requires, in order todiscourage opportunistic behaviour, that access to theprocedure be precluded to debtors who resorted toit at any time in the past three years.The objective requirement is that the debtor mustbe in a state of over-indebtedness. Over-indebtednessis a notion similar to insolvency, in the sense that,pursuant to Article 2 of Law No 3 of January 27,<strong>2012</strong>, the debtor’s situation is one of “persistingunbalance between his/her credit commitments andhis/her assets readily liquidatable to meet them, andthe debtor’s definitive inability to fulfil his/her debtobligations when they fall due.”The procedure is opened by the debtor filing aproposal for a debt restructuring agreement which isintended, unlike a proposal for debt restructuringarrangements under Article 182-bis of the BankruptcyAct, to be accepted by some of the creditors only ata later time. Pursuant to Article 7 of Law No 3 ofJanuary 27, <strong>2012</strong>, the proposal for agreement must bebased on a feasible plan allowing the debtor to fulfilboth the obligations arising from the debtrestructuring agreement and those undertaken to anycreditors unwilling to enter into the agreement.The Italian legislators have also stressed that, in thesame way as in insolvency proceedings governed bythe Bankruptcy Act, the plan may provide for anyavailable forms of satisfaction of creditors and debtrestructuring, including assignment of future incomeand, most likely, the division of creditors into classes,provided that any dissenting or outsider creditorsmust be paid to the fullest extent of their claims.As for this class of dissenting and outsidercreditors, it should be noted that Article 8(4) of LawNo 3 of January 27, <strong>2012</strong> entitles the debtor topropose a payment moratorium for up to one year,provided that: (i) the plan appears to be adequate toensure payment upon the expiry of the moratoriumperiod; (ii) the plan is made the responsibility of ajudge-appointed liquidator to be nominated by thecrisis settlement panel; and (iii) the moratorium doesnot apply to any payments due to holders ofunpledgeable claims.The legislator has also specifically provided that,118

where the debtor’s assets or income are inadequateto warrant the feasibility of the plan, the proposalinstrument must be executed by one or more thirdparties accepting to contribute sufficient revenues orassets, whether as collateral or otherwise, to secureproper performance of the agreement.As for how an over-indebtedness settlementprocedure is instigated, it should be pointed out that,much as Article 9 of Law No 3 of January 27, <strong>2012</strong>generally indicates the filing of the relevant proposal, areasonable proposition is that the procedure shouldbe initiated by a formal application being filed with theDistrict Court of the debtor’s place of residence orbusiness.The debtor must supplement the proposal with adocument showing: (i) all creditors and the amountsdue to each of them; (ii) the debtor’s own assets; (iii)any acts of disposition entered into in the last fiveyears, complete with the debtor’s tax returns for thelast three years; (iv) a plan feasibility certificate; and (v)a list of the necessary living expenses for the debtorand his/her dependents, following an indication of thecurrent composition of his/her household as formallycertified by the family register. If the debtor is engagingin business activities, then he/she must file his/heraccounting records for the past three years, togetherwith a declaration of conformity with the originals.Especially noteworthy among the documents to beso produced is the list of the acts of dispositionentered into by the debtor in the previous five years.This requirement was probably introduced to curbmisuse of the procedure by ostensibly pauper debtors.It may, however, turn out to be needlesslyburdensome, especially when considering that theunspecific reference to acts of disposition entered intoin the last five years covers all and any acts ofdisposition involving all of the debtors’ assets, whetherreal estate or personal property.As noted above, the debtor has the duty to file anappropriate certificate issued by the crisis settlementpanel, a body of professionals who, as indicated below,has a major role to play in the procedure, particularlybecause they are responsible for testing the feasibilityof the proposed plan, and for certifying that theagreement is capable to secure proper payment tooutsider creditors.Once the debtor’s application has been filed, thejudge will, pursuant to Article 10 of Law No 3 ofJanuary 27, <strong>2012</strong>, satisfy himself that the requisiteformalities have been performed, issue a decree fixinga hearing to be held before him, and order that boththe debtor’s proposal and such decree be notified bythe crisis settlement panel. Thereupon, unlessfraudulent projects or actions are contrived to thecreditors’ detriment, the judge will order that noindividual enforcement actions can be initiated orpursued, no writs of attachment issued nor anypreferential rights acquired against or in the debtor’sassets for a term not exceeding 120 days. It is fair topresume that, at this stage in the proceedings, thejudge is not required to assess the feasibility of theplan, and that he has no discretion to grant or denysuch term of asset protection.In the same way as in a case of prior compositionwith creditors under Article 160 ff. of the BankruptcyAct, Article 11 of Law No 3 of January 27, <strong>2012</strong>requires that the creditors’ consent to the debtor’sproposal be acknowledged by the crisis settlementpanel, even though a creditor’s notice of consent inthe latter case is not treated as a vote, but merely asacceptance of a contractual proposal. In other words,any creditors willing to accept the debtor’s proposalmust deliver a duly executed acceptance notice inwriting to the crisis settlement panel.For the proposal to be formally authorised,acceptance must be notified by at least 70% of allcreditors. In the legislators’ silence, it is reasonable topresume that the proposal may or should be soformulated as to divide the creditors into classes witha view to encouraging acceptance.As the provisions under scrutiny do not specify anytime limit by which an agreement with creditors musthave been reached, it will be the judge’s responsibilityto state a term in the order fixing the date of hearingpursuant to Article 10 of Law No 3 of January 27,<strong>2012</strong>, lest the procedure should be left without a finaldate of completion. Obviously, the debtor’s assets willno longer be afforded legal protection after the expiryof the 120-day period provided for in Article 10.Once an agreement is timely reached between thedebtor and his/her creditors, it will be the crisissettlement panel’s duty, pursuant to Article 11 of LawNo 3 of January 27, <strong>2012</strong>, to transmit to each creditora report on the acceptance notices received and theattainment of a statutory quorum, along with the textof the final agreement. After receiving such a report,dissenting creditors, if any, will have 10 days to raiseadditional objections and, once such term has elapsed,the crisis settlement panel will transmit the report tothe judge, specifying any objections received and finallycertifying the feasibility of the proposed plan.At this stage, the judge will be responsible forestablishing: (i) the attainment of the requisite quorumof consents; (ii) the grounds for objections; and (iii)the suitability of the plan to ensure full satisfaction ofany outsider creditors’ claims. Thereupon, the judgewill decide whether to grant or deny formal approvalof the project. Either decision may be appealed to theDistrict Court of competent jurisdiction, it beingunderstood that the judge delegated to the119

procedure may not be a member of the appeal boardhearing the case.In the implementation phase following formalapproval of the plan, the crisis settlement panel willhave the duty, pursuant to Article <strong>13</strong> of Law No 3 ofJanuary 27, <strong>2012</strong>, to decide any issues as may arise inperforming the agreement, to supervise compliancewith the contractual provisions, and to notify thecreditors of any breaches as may be detected. Inorder to ensure proper performance of theagreement, the legislators thought it appropriate tothreaten voidance of any payments or disposals ofassets made in breach of the agreement or the plan,probably also with a view to discouraging both thedebtor and any other party to the agreement fromperpetrating, or assisting in the perpetration of, abreach of either the plan or the agreement.Supervising proper performance of the agreementis not the only task assigned to the crisis settlementpanel, which is a body of professionals meeting certainrequirements.As these professionals are given roles that areperformed by different persons in other insolvencyprocedures, they have a pivotal role to play not only inthe course of the procedure, but already at the timethe plan and the proposal to the creditors are beingprepared, since the debtor will necessarily have toturn to them for assistance.As mentioned above, in addition to dischargingadvisory functions, the panel is responsible for securingand protecting third-party interests, since it is requiredto attest the feasibility of the plan and to certify theaccuracy of the information contained in the proposal.The panel has also the duty both to collect thecreditors’ notices of acceptance and to acknowledgeany objections to the plan. Furthermore, it is required,on behalf of the debtor, to provide for any statutorynotices and public statements as the judge may order,and, after the agreement is formally authorised, it willendeavour to resolve any difficulties as may arise atthe enforcement stage by ensuring proper contractualperformance by the debtor and notifying the creditorsof any irregularities as may be detected.It is appropriate to stress that the efficacy of theagreement is primarily subordinated to the alternativeactions for voidance and termination of contractprovided for by Article 14 of Law No 3 of January 27,<strong>2012</strong>. Specifically, the agreement may be declared nulland void by the District Court of competentjurisdiction at the request of any creditor where thedebtor’s liabilities have fraudulently been inflated ordeflated, a major proportion of his/her assetsremoved or dissimulated, or non-existing assetsfraudulently simulated. Termination is admissible wherethe obligations arising from the agreement are notperformed, any promised security interests are not setup, or the agreement can hardly be performed forreasons outside the debtor’s control. Another groundfor termination has been introduced by Article 14 ofLaw No 3 of January 27, <strong>2012</strong>, pursuant to which theagreement is deemed automatically terminated wherethe debtor fails to make any payments due to publicadministrations or to any providers of mandatorypension or welfare benefits within 90 days of therelevant due dates.By providing for the statutory settlement of overindebtednesscrises, Law No 3 of January 27, <strong>2012</strong> isundoubtedly commendable for setting up a procedurefor the discharge of a person ineligible for bankruptcyproceedings that involves the whole of that person’screditors even when only some of them participate inthe agreement.However, to what extent the procedure underscrutiny will be welcomed is still to be seen, especiallybecause of the apparent lack of real incentives for thecreditors to enter into the proposed agreement –contrary to what occurs in the case of the debtrestructuring arrangements provided for by Article182-bis of the Bankruptcy Act. For it is fair to predictthat the procedure so newly introduced may turn lesssuccessful than hoped for, since the benefits arising tothe creditors from consenting to the debtor’sproposal might prove inadequate to disincline thecreditors from seeking individual enforcement actionsagainst the debtor’s present and future assets.Author:Prof. PierDanilo Beltrami, Ph.D., PartnerLombardi Molinari e Associati Law FirmVia Andegari 4/A<strong>2012</strong>1 MilanItalyTel: +39 02 89622 1Fax: +39 02 89622333Email: info@lmlaw.itWebsite: www.lmlaw.it120

Lombardi Molinari e Associati has more than eighty lawyers.The Firm assists its clients in important litigation and arbitration cases incorporate, commercial and general civil law matters and is active in advisingand assisting industrial and insurance companies, financial institutions andprivate equity funds in non-contentious matters, in innovative and complexdeals such as mergers and acquisitions, joint ventures, tender offers, structuredfinance, banking transactions and real estate, both within Italy andincreasingly at an international level. The Firm has significant experience inbankruptcy issues and business reorganisations, having assisted variousItalian groups in restructuring their activity.

Luxembourg – Being a bondholder in a distressed situation:The debt equity swap route – a vessel fraught with pitfalls?by Christel Dumont and Martine Gerber-Lemaire, OPF PartnersAccording to Thomson Reuters’ Distressed Debt & Bankruptcy <strong>Restructuring</strong>Q1 Round-up issued in April <strong>2012</strong>, EMEA distressed debt restructuring dealvolume amounted to €11.45bn in the first quarter of <strong>2012</strong>, marking a 57.3%decrease in activity compared to the first quarter of 2011. Financials was theleading sector with approximately 53% of total completed EMEA distresseddebt restructuring deal volume.Nevertheless, European debtors are now forced to finda more substantive cure for their capital structures thanthe ‘extend and pretend’ stopgaps that have been soprevalent in the market in the past two years. Thedeleveraging is present everywhere and the solequestion is how deep will it be.Creditors, therefore, are now ready to accept toreplace part or all of their debt in exchange for equity(‘debt equity swap’). It could be seen as the lastantidote to avoid death!Although bondholders are usually unsecured andmust deal with the company and its senior lenders,they are commonly and actively involved in thediscussions and negotiations of restructuringtransactions. Given that bonds are consideredcompany debts, whereas shares, although companyliabilities, are equity and represent ownership in thecompany, bondholders cannot be considered as‘normal’ company creditors as their debt is part of acollective debt and is represented by a negotiableinstrument. Bondholders are linked to the fate of theirdebtor, usually for a long period of time, and if thecompany faces financial difficulties, it is unlikely thatthey will be reimbursed for the interests or even forthe principal in the worst case scenario.However, in distressed situations, bondholders,despite being unsecured, are not totally left withoutany means and their rights are quite well protectedunder Luxembourg law. The current wording of articles79 to 98 of the law of August 10, 1915 on commercialcompanies, as amended (the ‘Law’) dealing with bondissuance has been designed to organise and protectthe bondholders’ body. Obviously, as the interests ofbondholders and shareholders differ, the Law granted awider protection to bondholders, and both thecompany that issued the bonds (the ‘Issuer’) and thegeneral meeting of bondholders are allowed toappoint, during the term of the loan, a representative(the ‘Representative’) with specific powers. In case ofmulti bond issuance, each bondholders’ body may berepresented by a Representative.The crucial role of theRepresentativeThe Law provides that either at the time of the bondissuance by the Issuer or, at any time during the term ofthe loan’s note, one or several Representatives may beappointed by the general meeting of bondholders.The Law further provides for some exceptionswith respect to the appointment of theRepresentative, i.e. neither the Issuer, nor (i) thecompanies holding one-tenth or more of the capitalof the Issuer or in which the Issuer has a holding ofone-tenth or more; (ii) the companies guaranteeing allor part of the obligations of the Issuer; or (iii) themembers of the board of directors, of themanagement board (directoire), of the supervisoryboard, statutory auditors, external auditors, andrepresentatives of the aforementioned companies canbe appointed to this role.These exceptions reinforce the independent statusand the powers granted to the Representative.The Law has clearly stated the powers of theRepresentative in case the Issuer appoints it at thetime of the bond issuance, in order to protect thebondholders and maintain a certain balance betweenthe rights and duties of the bondholders meeting andthose of the Representative. In this context, the Issuercan neither limit these powers, nor extend them whileappointing the Representative at the time of thebond issuance.The main missions of the Representative will be toimplement the resolutions adopted by the generalmeeting of bondholders, to accept on behalf of thebondholders the collateral intended to secure theIssuer’s debt, and to take conservatory measures toprotect the bondholders’ rights.More importantly, the Representative may be aparty to legal proceedings as plaintiff or defendantacting in the name and in the interest of all thebondholders, without it being necessary for the latterto be joined to the proceedings. In this context, oncea Representative is appointed, bondholders are122

deprived from exercising their rights individually andindividual actions that have already commenced shallterminate unless the Representative continues suchactions within six months after its appointment.In a distressed situation, an Issuer, facing an actionof a bondholder, may be tempted to convene ageneral meeting of bondholders to have aRepresentative appointed in order to block suchaction. In practice, this can be a huge miscalculation forthe Issuer, as the bondholders may agree to appoint a‘friendly’ Representative who will continue the action, ifsuch action can be useful to all bondholders. In suchsituation, the Issuer will still have to face the action anddeal with a more organised group of bondholders anda Representative.When a Representative is appointed by the generalmeeting of bondholders or after a period of sixmonths if it has been appointed by the Issuer at thetime of the bond issuance, its powers are freelydetermined by the general meeting of bondholders,that can either restrict or extend such powers in orderto enhance the protection of the bondholders’ rights.In pre-insolvency situations, the role of theRepresentative is even more essential. As a matter offact, it shall represent the bondholders in anybankruptcy, suspension of payments, composition withcreditors to prevent bankruptcy, controlledmanagement and all similar procedures, and shalldeclare all the claims in the name and in the interestof the bondholders and prove their existence andamount by all legal means.The above clearly highlights that the choice of theRepresentative is the key stone. The general meetingof bondholders may appoint one of the bondholdersas Representative, however, a third party, specialised indistressed situations and restructuring, with a goodknowledge of the market in which the Issuer is active,may generally be privileged; especially in order toavoid any conflict of interest between bondholders.Finally, it is also worthwhile to mention that thegeneral meeting of bondholders may dismiss theRepresentative. The Representative may also beremoved for just cause by the judge presiding over thechamber of the district court dealing with commercialmatters, at the application of the company or of anybondholder. This seems like a useful crash barrier inorder to protect the rights of the bondholders. In acase concerning a company’s request to remove theRepresentative, a court decision dated February 29,<strong>2012</strong> ruled that as bondholders may have diverginginterests from the interests of the company, theRepresentative should be obliged to act independentlyand without any conflict of interest and the existenceof a just cause or not should be assessed carefully.Despite the fact that the Representative isappointed by the bondholders meeting, the Issuer isobliged by the Law to pay its fees and to reimburseits expenses. This shall also guarantee its independencytowards minority bondholders.Powers of the bondholders meetingThe Law implemented dual powers between theRepresentative and the bondholders meeting (twoseparate organs), equivalent in certain aspects to theones of a sole manager and the shareholders meetingin a private limited liability company.Actually, the rules applicable to the conducting ofthe meetings are similar to the ones applicable toshareholders meetings and are determined by thearticles of association of the Issuer, the terms andconditions of the bond issuance and the provisions ofarticle 67 of the Law.The Law provides that the meeting may appoint orremove the Representative and particularly resolveon the conservatory measures to be taken in thecommon interest, modify or waive the specificcollateral granted to bondholders, but also amend theconditions of the issuance.Notably, the general meeting of bondholders canpostpone one or more interest payment dates, agree toa reduction of the interest rate or change the conditionsof payment thereof, extend the amortisation period,suspend the same and consent to changes in theconditions thereof, agree to the substitution of bonds byshares of the Issuer, and agree to the substitution ofbonds by shares or bonds of other companies.However, the Law provides that decisionsconcerning the amendments to the interest rate, thepostponement of the interest payment date, theextension of the amortisation period and thesubstitution of bonds by shares of the Issuer or bybonds or shares of other companies, may only betaken if the capital of the Issuer has been fully called.Finally, where the substitution of shares for bondsimplies a share capital increase of the company, it mayonly be executed if the capital increase is resolvedupon by the general meeting of shareholders no laterthan three months after the decision of the meetingof bondholders.With regards to the securities, the Law providesthat the meeting can, in the interest of thebondholders, amend or wave the specific collateralgranted to the bondholders. The Law has reservedthis power to the meeting of bondholders and not tothe Representative. This provision was adopted inorder to secure the rights of the bondholderstowards the Issuer and the Representative, who willonly have the power to accept new collateral, but willbe powerless with regards to existing collateral at thetime of its appointment.123

To summarise the roles of each organ: all measuresthat could affect the financial rights of the bondholdersare resolved upon by the bondholders meetings,whereas the Representative executes its decisions oris only allowed to take conservative measures.Active role of bondholders in debtrestructuringIn practice, the Representative lacks adequate power tocheck the Issuer’s moves, as it only has the right toattend the shareholders meetings, to read the minutesof debates and to view the shareholders’ register,whereas it is denied a direct access to the mostimportant account books. These limitations reduce theRepresentative’s capacity to perceive the company’sfinancial distress and, consequently, to propose apreventive debt renegotiation, which must be approvedby the majority of bondholders.Nevertheless, the bondholders frequently use thesword of Damocles of suing for bankruptcy in orderto bring the Issuer to the negotiating table.Therefore, bondholders, amongst other stakeholderssuch as shareholders, senior lenders and creditors, areusually deeply involved in debt restructuringnegotiations. As a matter of fact, in the negotiationsdebt equity swaps are commonly chosen as a potentialsolution. Consequently, although bondholders willpartially lose their investment (sometimes a substantialpart of this investment), they will receive equityinstead of entirely losing their investment should theIssuer go bankrupt.In practice, such debt equity swap operations arenot so easily carried out and the fact that the variousstakeholders in the negotiations have divergentinterests clearly does not help to find a solution.Debt equity swaps imply that all stakeholdersshould agree on the valuation of the Issuer, assess theamount of debt to be converted into equity, agree onthe terms of this conversion and the type of equity tobe issued, quantify the allocation of new equitybetween converting bondholders or other creditorsand chose a proper mechanism to convert it, whiletaking into account tax and regulatory aspects. In anycase, a report from an independent auditor isnecessary to allow such conversion and thusguarantee the stakeholders’ protection.Meanwhile, the consent of existing shareholders willusually be required with regards to the issuance of newshares as they will face a risk of dilution which mightlead them to consider carefully and reluctantly a debtequity swap. In case of a capital increase throughauthorised capital and in view of ‘converting bonds intoshares’, Luxembourg legal authors have controversialpoints of view regarding the fact whether it could bedone only by the board of directors or not.For listed companies, regulatory requirements willhave to be met, as well as disclosure requirements.Relevant thresholds might be reached whileimplementing the debt equity swap and clearance onregulatory obligations may be required (such astakeover bid, concerted actions, etc.).Needless to say, this kind of restructuring is timeconsuming, costly, difficult to implement and in half ofthe cases it only reaches a deadlock.However, the advantage of this solution consists insimultaneously reducing the Issuer’s debt (and interestpayments) and increasing its equity, which may boostits credibility and confidence to seek new financing inorder to continue its operations.Evidence has proven that the stumbling block ofthis solution has often been the lack of coordinationbetween the bondholders, which may reduce itsefficiency due to the high amount of expectednegotiation costs further to breach of covenants.Lenders from the banking sectors are usually moreorganised as from the beginning (acting through facilityagents) and therefore costs of negotiations are usuallylower and the use of covenants is more efficient.Facing the worst: do thebondholders have any rights in caseof bankruptcy?It is deemed crucial that in case of bankruptcy or ofany similar proceedings, the general meeting ofbondholders shall still have the right to appoint aRepresentative, as it has the power to represent thebondholders in the insolvency proceedings and tolodge their claims. The bondholders have more weightand powers by being represented as a bondholders’body by their Representative rather than by actingindividually.This seems to be a straight forward route as theprovisions of the Law in this respect are crystal clear.Cross-border insolvency andrecognition of a LuxembourgRepresentativeIn practice, the Issuer is rarely declared bankrupt orplaced under another insolvency proceeding inLuxembourg. In fact, in Luxembourg there is no realefficient in-court restructuring tool. The procedures ofsuspension of payments (sursis de paiement) andcomposition with creditors (concordat préventif defaillite), which are used to remedy the situation of thedebtor, seem to have fallen into disuse. In the past10 years there have been no reported cases ofsuspension of payments or composition with creditorsand only one or two controlled managementproceedings (gestion contrôlée) are opened every year.Under such circumstances, the Issuer commonly124

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uses the provisions of the EU Regulation <strong>13</strong>46/2000,and, in order to benefit from a friendlier location forrestructuring, states that its Centre Of Main Interests isnot located in Luxembourg. Should the latter occur, itmight be more difficult to have the provisions of theLaw enforced. Local courts or insolvency practitionersmight be reluctant to accept claims lodged by theRepresentative and not by the bondholders individually.In conclusionDespite the fact that bondholders are legally protectedand well organised under Luxembourg law, comparedto other types of lenders, they quite often fail toachieve a successful restructuring, as most of the timethe bondholders individually have divergent interestsfrom the bondholders’ body. Nevertheless, Luxembourgwith its large amount of euro bonds continues to be awelcoming and secure country for bondholders.Authors:Christel DumontPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>/Real EstateEmail: cdumont@opf-partners.comMartine Gerber-LemairePartner, <strong>Restructuring</strong> & <strong>Insolvency</strong> Practice HeadReal Estate/CorporateEmail: mgerber@opf-partners.comOPF Partners291, Route d’ArlonBP 603L-2016 LuxembourgTel: +352 46 83 83Fax: +352 46 84 84Website: www.opf-partners.com126

<strong>Insolvency</strong> and restructuring:The Malaysian positionby Jeyanthini Kannaperan, Shearn Delamore & Co.In Malaysia, we continue to have separate legislation dealing with personalinsolvency and corporate insolvency and this article serves to focus on thelatter. In this respect, although statutes govern liquidation and other aspectsof corporate insolvency, the common law continues to be an importantsource and guide. The applicable statutory framework in a corporateinsolvency is found within the Companies Act 1965 and the CompaniesWinding-up Rules 1972 1 [both of which have been subject to amendment andreview from time to time] and with the Bankruptcy Act 1965 and theBankruptcy Rules 1969 applying in so far as the rights of secured/unsecuredcreditors and on proofs of debts.Compulsory and voluntarywinding-upAs a useful starting point, 2 the Act allows for acompany to be wound up voluntarily or by the court.The most common ground upon which a company issought to be wound up, whether by court orvoluntarily by its members or creditors is that thecompany is unable to pay its debts. This results in aslew of issues from the impact of winding-up on thecorporate identity and powers of the company to thecollection of assets and discharge of liabilities and thedistribution of surplus assets. The focus of the article ison the reconciliation of the pari passu principle withthe rights of creditors to set-off.Proof of debtsThis procedure by which creditors establish theirentitlement in the liquidation process is in essence thesame whether the liquidation is voluntarily orcompulsory. The key factor remains that the claim orliability for which the proof is lodged must be one thatis legally enforceable and must exist at the time thecompany went into liquidation although the provision inthe Act 3 provides only for all debts, present or future,certain or contingent, ascertained or sounding only indamages to be proved.Priority of distribution of assetsThe Act 4 provides for an order of priority in paymentof monies available from realisation of assets, whether incompulsory or voluntary winding-up. However, asecured creditor enjoys an advantage and can realise itscharge to recoup the monies outstanding by thecreditor without having to wait for payment with otherunsecured creditors 5 although a secured creditor isbarred from claiming interest after the date of windingupif the secured creditor fails to realise the asset withinsix months from the date of winding-up. In the event ofa surplus, a secured creditor is required to account tothe liquidator for the same and, should there be ashortfall, a secured creditor can lodge a proof for theunsatisfied balance.The pari passu principleThe rule of distribution that all liabilities belonging to ahigher category must be discharged before payment ofliabilities belonging to lower categories, with creditors ineach class having to be paid equally, remains. 6 Howeverthere are significant exceptions to this rule includingwhere devices have been introduced to remove assetsfrom a company’s ownership (whether by reservationof title or trust devices) or where a creditor is able toestablish a right of set-off. 7Set-off and mutual debtsSime Diamond Leasing (M) Sdn Bhd v JB PrecisionMoulding Industries Sdn BhdSome years ago, the apex court 8 in a contest betweena lessor who had leased out equipment to a companyand its liquidator held that the lessor was entitled toretain deposits placed by the company as prepaidrentals and security deposits at the start of the leasingarrangement. Pursuant to the terms of the agreementthe lessor did, upon a winding-up petition beingpresented, serve a notice to terminate the lease andretook possession of the equipment and did demandpayment of the balance amounts outstanding by thecompany after setting-off deposits. Upon the companybeing wound-up, the liquidator demanded refund of thedeposits claiming that the lessee was neither apreferential nor secured creditor and that the depositswhich represented the assets of the company must bereleased to the liquidator.The High Court and Court of Appeal had agreed127

with the liquidator that upon presentation of thepetition, the claim in respect of the deposits had beenreduced to a right of proof and that any othermethod of claiming the deposits would be barred bythe pari passu principle of distribution and to give thelessor the right of set-off would, in effect, give it anundue preference over the general body of creditorsand was a breach of the Act. 9On appeal, the Federal Court summarised thatthere were two main issues that arose for decision,namely, whether the set-off pursuant to the agreementwas a voidable preference under Sections 223 and293 of the Act and Section 53(1) of the BankruptcyAct and whether the set-off pursuant to theagreement was authorised by Section 41 of theBankruptcy Act. In deciding on the two issues theFederal Court:• held that the relevant date for the purposes oftriggering undue preference restrictions was not thedate on which the set-off was effected but the dateof the agreement and when the lessor had receivedthe deposits. The Court found that there was noevidence at this stage that the company wasinsolvent or unable to pay its debts or that theintention of the parties was to confer a preferentialpriority or advantage over other creditors;• recognised that “the legislature in providing forinsolvency set-off gives legitimacy to a system ofaccounting whereby the party successfully assertingthe set off enjoys a preference over the generalbody of creditors in a manner similar to thatenjoyed by a secured creditor”;• emphasised that Section 41 of the Bankruptcy Actis mandatory and cannot be excluded byAgreement between the parties, “upon the adventof bankruptcy or liquidation, the rights ofcontractual set off are displaced by statutoryprovisions relating to set off on insolvency”;• held that in order to qualify as a statutory set-offunder Section 41 of the Bankruptcy Act thecircumstances must show the existence of mutualcredits, mutual debits or other mutual dealings 10and that the debt existed at the commencementof the winding up. In this respect, the prerequisiteof mutual dealings requires that the cross-demandsmust be between the same parties, and be held inthe same capacity or right.AIMB Marketing Sdn Bhd v Malaysian Trustees Bhd 11In this more recent decision, the Court of Appeal hadreason to consider Section 41 of the Bankruptcy Actagainst the backdrop of a supermarket which hadexecuted a debenture in favour of a lender bank andwhich had also been supplied goods on consignment byvarious suppliers. The supermarket was compulsorilywound-up and in the course of liquidation, theliquidators recovered a sum of monies (the stakemonies) which the receiver and manager appointed bythe debenture holder claimed as assets captured by thedebenture whilst the suppliers claimed that since thesupermarket had not paid for the goods supplied onconsignment, the sales proceeds within the stakemonies were subject to a trust in favour of thesuppliers. Additionally, the supermarket had a creditbalance (the account monies) in the account ofanother bank who asserted a set-off against the moniesby reason of the loss of 20 credit authorisationterminals supplied to the supermarket whilst thereceiver and manager also asserted a claimed to theseaccount monies.The Court of Appeal:• in following a Singapore authority 12 on similar facts,held that in the absence of an express term in theconsignment agreement creating a trust, thesuppliers should have required the maintenance ofa separate account by the supermarket for saleproceeds of the consigned goods. The Court tookthe position that the freedom provided to thesupermarket to mix the sale proceeds with othermonies of the supermarket was incompatible witha fiduciary relationship;• accepted that the High Court Judge was correctto reject HSBC’s claim for a set-off under Section41 of the Bankruptcy Act because the accountmonies were subject to the debenture andbecause no mutual credit, mutual debit or mutualdealing within the principles recognised in SimeDiamond Leasing (M) Sdn Bhd v JB PrecisionMoulding Industries Sdn Bhd had been shown.• concluded <strong>13</strong> that the High Court Judge that wascorrect in holding that the receiver and managerwas entitled to both the stake monies and accountmonies and directed the liquidator and HSBC topay the said monies to the receiver and manager. 14The conclusions reached by the Court of Appeal in sofar as the account monies are surprising given thatHSBC was not party to the appeal and as fullarguments were not taken to support the findingthat the charge credit in favour of the debentureholder prevents a statutory set-off and that no mutualcredit, debit or dealing within Section 41 existedbecause there was no evidence of the loss sought tobe set-off.ConclusionThere continues to be room for further amendmentand change to the statutory regime in Malaysia oninsolvency law. Given the robust speed with whichother legislation has been passed in the last few years itwould be safe to assume that change in the insolvencyprovisions will be sooner rather than later. 15128

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Notes:1The Act and Rules do in the main echo principlesthat stem from earlier English and Australianlegislation and case law from both jurisdictionscontinue to be received as persuasive authority,subject to the guidelines in the Civil Law Act 19562Section 211 Companies Act 1965.3Section 291(1) Companies Act 1965.4Section 292 Companies Act 1965.5Section 8(2) and 8(2)A of the Bankruptcy Act1969. The Court of Appeal in United Overseas Bank(Malaysia) Bhd v Andrew Lee Siew Ling (2011) 6AMR 51 accepted that this bar to further interestwould only apply as against the company inliquidation and that such interest can still beclaimed against guarantors and securities providedby third parties if the contracts entered into withthese persons allowed for such interest to be paid.6Section 264 Companies Act 1965.7Section 41(1) of the Bankruptcy Act 1969 – wherethere have been mutual credits, debts or dealingsbetween an insolvent company an account shall betaken of what is due from each party and only thebalance of the amount shall be paid/claimed.81998 4 MLJ 469 – dicta of Edgar Joseph FCJ.9Section 293 of the Companies Act 1965 andSection 53 of the Bankruptcy Act 1969 – thestipulated transactions, including transfer ofproperty and payments made by a companyunable to pay its debts to a creditor within sixmonths prior to the commencement of winding-upshall be void.10“Dealings” – the Court accepted an Australianauthority on the point [Gye v Mclntyre] and that1112<strong>13</strong>1415dealings is used in a non-technical sense and is aterm of wide scope but must relate to commercialtransactions.2011 5 MLJ 210.The Singapore Court of Appeal in HincklaySingapore Trading Pte Ltd v Sogo Department Store(S) Pte Ltd 2001 4 SLR 154.An application for leave to appeal to the FederalCourt was unsuccessful and the decision stands.The documents placed before the High Courtconfirmed that the supermarket acknowledgedthat the terminals were lost/removed.The Deputy Prime Minister Tan Sri MuhyiddinYassin did in March <strong>2012</strong> state that the CompaniesCommission of Malaysia (SSM) will introduce amore comprehensive Companies Act and that thismove is among initiatives to be taken by SSM tocreate a more competitive and conducive businessenvironment in the country.Author:Jeyanthini Kannaperan, PartnerShearn Delamore & Co.7th Floor, Wisma Hamzah-Kwong HingNo 1 Leboh Ampang50100 Kuala LumpurMalaysiaTel: +603 20272849Fax: +603 20342763Email: jeyanthini@shearndelamore.comWebsite: www.shearndelamore.com<strong>13</strong>0

Recent developments inDutch restructuringsby H.F. van Druten, V.R. Vroom and A.C.P. Bobeldijk, Loyens & LoeffThe Netherlands has traditionally been a very open economy. In part due toits competitive tax climate, many international transactions have beenstructured via (holding) companies in the Netherlands. In recent years, theways in which these companies have restructured their financial position havebecome more varied. An important part of any restructuring in the Dutchmarket will always be linked to the Dutch law security rights that have beenput in place. There have been an increasing number of enforcement sales inthe Netherlands, although case law on the matter is still scarce. Some of thelarger restructurings concerning a Dutch (holding) entity in an internationalgroup, have been implemented in part via proceedings (both in and outsideinsolvency) in jurisdictions such as the UK, the US and France. This articleprovides an overview of the different types of restructurings that haverecently been seen in the Dutch market. We will also describe the tax aspectsattached to these types of restructuring.International aspectsLarger restructurings typically involve group companiesin different jurisdictions. Depending on thecircumstances, an enforcement sale of the shares in theholding company may not always resolve the issuesfaced by lenders or companies. Especially in caseswhere different groups of lenders (such as mezzanineor subordinated lenders) have granted loans directly tocompanies at a lower level in the group other aspectswill need to be dealt with in the restructuring. Wewould expect that a reduction of debt levels within thegroup is a key element to any restructuring, sodepending on the structure of the financing othermethods will need to be used by the lenders inaddition to a mere enforcement of a share pledge.In a number of cases where Dutch holdingcompanies were acting as the main borrower underthe finance documents, the restructuring was partlyimplemented by way of certain legal proceedings innon-Dutch jurisdictions. We will hereinafter notdescribe these non-Dutch processes, but we willtouch upon how these proceedings may play a role ina Dutch restructuring.US Chapter 11In one notable Dutch restructuring concerning a Dutchholding company of an aluminium group (Almatis), USChapter 11 proceedings were opened in respect ofsuch Dutch holding company. One of the advantages ofa US Chapter 11 proceeding over a restructuringimplemented via the Netherlands is that securedcreditors can be crammed down in a Chapter 11.Dutch legislation does not provide for a possibility tocram down secured or preferred creditors. To theextent enforcement of security rights does not lead toa situation in which all opposing secured creditors areforced out of the structure, a Chapter 11 can be auseful tool for the controlling senior lenders.However, a US Chapter 11 can also be used by aDutch borrower to stave off actions from its securedcreditors due to the fact that an automatic stayapplies to all actions of creditors, including securedcreditors. Dutch law on the other hand only providesfor very limited possibilities to stall actions fromsecured creditors. In a case involving a Dutch shippinggroup (the Marco Polo group of companies), Dutchentities were made subject to Chapter 11, wherebythe aim was to be able to restructure their businessand invoke protection against their secured lenders.The companies required protection against theirsecured creditors in order to be able to restructuretheir business, which protection Dutch law could notoffer. The opening of Chapter 11 proceedings waspossible in spite of the fact that the companies athand did not have a material business in the US.Opposition from the secured lenders to this move bythe Dutch companies was rejected by the court inthe US.An important proviso that needs to be made inrespect of the use of a US Chapter 11 is that Dutchlaw does not recognise a US insolvency proceeding.As was shown in the Marco Polo case, this limitationdoes not (always) have to prevent a successfulrestructuring via a Chapter 11.UK scheme of arrangementIn addition to US Chapter 11 proceedings, there hasalso been increasing attention to the possibilities toeffect a restructuring via certain options under Englishlaw. In particular, a so-called scheme of arrangement<strong>13</strong>1

sanctioned by the English courts may provideopportunities for international restructurings. TheEnglish courts have assumed jurisdiction over non-UKcompanies in a number of cases, whereby thesecompanies and their creditors were subject to financedocumentation governed by English law. It is howeverstill an open issue to what extent an English scheme ofarrangement can be recognised and enforced in theNetherlands (or, for that matter, other Europeanjurisdictions). Such a scheme does not fall under thescope of the European <strong>Insolvency</strong> Regulation, but it hasbeen argued that recognition may be possible underthe European Enforcement Regulation or under theRome Convention on the choice of laws. Alternatively,parties may possibly rely on the rules of Dutch privateinternational law in order to get the English scheme ofarrangement recognised.Dutch law featuresEnforcement of security rights remains a key feature ofmany restructurings in the Netherlands. In addition tothis, an alternative approach entails the implementationof a so called STAK structure, which we will bothdescribe hereinafter.Enforcement of security rightsThere are three ways in which the enforcement of aDutch law security right can take place. Secured assetscan be enforced by way of (i) a public sale; (ii) a privatesale with court approval; or (iii) a private sale byagreement between the pledgee and the pledgor(s).These enforcement options apply irrespective of thetype of asset at stake, except that enforcement of aright of mortgage over real estate can only take placeby way of a public or a court approved sale.In practice shares are usually the most “logical” typeof asset to sell off, since this will most easily maintainthe going concern of the business and thus create aprospect of the highest enforcement proceeds. Sinceshares in a private limited liability company aremandatorily subject to transfer restrictions and in viewof the fact that there is accordingly no market for thistype of shares, a private enforcement sale is the mostlikely enforcement method. Both a court approvedprivate sale and a private sale with the approval of thepledgor are seen in the Dutch market.Private sale with court approvalA request for a court approved sale will have to befiled with the competent court by the pledgee. At thecourt hearing, to be held on a date set by the court,interested parties will be heard on the request for aprivate sale. Interested parties can include mezzaninelenders, other secured creditors or a person who haslevied an attachment on the shares.The court will in practice only grant approval for aprivate sale if (i) the pledgee has already found abuyer for the shares (although it should in theory bepossible to request approval for a private sale wherea specific purchaser is not yet known); (ii) thepurchase price is a fair one; and (iii) it can beestablished that the potential buyer is creditworthy.Valuation of the pledged assets is key in anenforcement scenario. Dutch law does not provide forrules or regulations with regard to the method ofvaluation and case law on the matter is still scarce.Decisive is that the court will have to be convincedthat the price offered is a fair price for the shares andthat (accordingly) no better price can be obtainedthrough a public sale. In order to ascertain whetherthe price offered by way of the request is fair, thecourt may hear competitive bidders. The fairness ofthe price can be substantiated by independentvaluations and/or fairness opinions provided to thecourt and a marketing exercise is also common.Private sale by agreementOnce the debtor is in default (verzuim), the pledgee canagree with the pledgor to privately sell the pledgedshares without the requirement for court approval. Anyparty with a restricted right (beperkt recht) or a partythat has levied an attachment (beslag) on the shares –if any – has to consent to this method of private sale.A pledgor considering whether to grant approvalto a private sale should be convinced of the fact thatthe highest enforcement proceeds are obtainedthrough a private sale. Especially where it isascertainable at what level of debt the value of thepledged shares breaks, a private sale with consent ofthe pledgor is a quick and easy method to enforce a(share) pledge. However, in case there are hostilelenders opposing the enforcement sale and in caseswhere there is debate or uncertainty on the valuation,a pledgor will likely be hesitant to grant its approval toa transaction for fear of being held liable. In such case,the court approved sale route seems the onlypractical option for implementing the restructuring.STAK structureOne of the difficulties for secured lenders in thecurrent market is that it is not always possible to find apurchaser willing to make a bid on the secured assets.Where the financing provided to borrowers has beenused to acquire a large real estate portfolio, it may bepreferable in a restructuring to sell the properties onan individual basis (or in small numbers) instead of on aportfolio basis, since there are not always buyers in themarket that are able or willing to acquire a largeportfolio. These potential purchasers will likely have toraise debt financing in order to make a credible bid(unless the secured lenders are willing to “roll over”their loans) and clearly the debt market has not beenvery open in recent years.This has led to more creative approaches to<strong>13</strong>2

estructuring, whereby control is taken away from theshareholder/sponsor without a full market sale of theassets taking place. Such a structure can be achieved bytransferring the shares in the holding company to aDutch foundation (which is a separate legal entity withfull legal personality). This effectively leads to a split inlegal and beneficial ownership to the shares. Depositaryreceipt in respect of the shares, representing theeconomic rights attached to the shares, is therebyissued to the shareholders. At the same time, controlover the structure is acquired by the secured lendersand the sales process can thereafter take place in anorderly way so that a fire sale is avoided. A STAKstructure is typically implemented with the cooperationof the shareholders, since the shareholders will have totransfer the shares to the foundation in return for thedepositary receipts.Tax aspectsAs explained in the previous paragraph, theenforcement of a security right remains a key featurein many restructurings in the Netherlands. The taxaspects of such enforcement and the tax aspects ofthe alternative STAK structure will be describedhereinafter. The tax implications of restructurings thatare implemented by way of legal proceedings in non-Dutch jurisdictions (e.g. US Chapter 11 proceedingsor UK scheme of arrangements) are dependent onthe specific circumstances of each case. We will notdescribe the tax aspects of these non-Dutchprocesses in this article. However, as a general remarkwe would expect that such proceedings will lead to areduction of debt levels within a group. We will touchbase on the tax consequence of a reduction of debtby way of a waiver or a conversion (in combinationwith a termination of a fiscal unity) in the section‘enforcement of a security right’ below.Enforcement of a security rightThe enforcement of a security right by a lender, whichleads to a sale of shares, can have several taxconsequences. In this respect, it will make a differencewhether this enforcement sale will take place with orwithout approval of the shareholders. It is important todistinguish the related tax consequences in advance asthese tax consequences will contribute to the decisionwhether the restructuring with or without the consentof the shareholders is preferred. For purposes of thisarticle it is assumed that the company (on which sharesthe lender has a security right) will be part of a fiscalunity for corporate income tax purposes as a subsidiary.In most cases (part of) the financing will be attracted atthe level of the parent company, i.e. the takeoverholding company. This simplified structure can be seenin Figure 1.Figure 1: Enforcement of a security rightShareholdersPSP = ParentLoanFiscal unityS = Subsidiary fiscalSecurity rightLenderIf the lender enforces its security right andconsequently sells the shares, the fiscal unity will beterminated. The tax consequences of a termination ofthe fiscal unity for the tax loss position, the underlyingintra-group debt positions, the future waiver of thedebts and conversion of debt will be analysedsuccessively. These tax consequences will not beinfluenced by the fact whether the enforcement ofthe security rights will be made by way of a sale to athird party or by way of an acquisition of the sharesby the lender.Tax loss positionIn general, taxable losses of a fiscal unity will beattributed to the parent company. Upondeconsolidation of the subsidiary from the fiscal unity,any losses incurred during the lifespan of the fiscal unitywill in principle remain with the parent companyregardless to which company these losses wereattributable. Pre-inclusion losses of the subsidiary thatare incurred before this subsidiary become part of thefiscal unity will be attributed to the subsidiary whichincurred these losses. There is an important exceptionto this general rule. At the joint request of the parentcompany and the subsidiary, fiscal unity losses can alsobe given to the subsidiary to be excluded from thefiscal unity, insofar these losses are attributable to thissubsidiary. Given the requirement that such anattribution of losses is only possible at the joint requestof the parent company and the subsidiary, thesubsidiary can only avail itself of this possibility if thefinancial restructuring will take place in consultationwith the shareholders.It was unclear for a long while at what point intime the amount of losses to be allocated to thesubsidiary should be determined. The Dutch SupremeCourt recently ruled that the amount of taxablelosses to be allocated to the subsidiary should bedetermined at the moment of deconsolidation of thesubsidiary from the fiscal unity. Consequently, any<strong>13</strong>3

taxable events at the level of the parent companyafter deconsolidation of the subsidiary do notinfluence the amount of the loss to be attributed tothe subsidiary of the fiscal unity.Intra-group debt positionsDuring the lifespan of the fiscal unity, intra-groupreceivables and loans are eliminated in the taxconsolidation and are therefore disregarded for taxpurposes. Intra-group receivables and loans revive upontermination of a fiscal unity. Debts on fiscal unity entitiesshould then be set at nominal value. The correspondingreceivable should in principle be valued at businessvalue, which in most cases equals the fair market value.The existence of intra-group receivables in itself doesnot trigger a taxable moment in case of termination ofthe fiscal unity. However, if the subsidiary has a debt tothe parent company and this debt will be waived in alater stage, this may have negative tax consequences(see below).For the sake of completeness, we would like tonote that there is a provision which states that if thedeconsolidation takes place within the sight of a‘liquidation’, external debts of the deconsolidatedcompany (so debts to other entities than the entitiesthat are part of the fiscal unity) should be revalued atthe immediate moment prior to the deconsolidationto the business value of the debt (assuming that thisamount is lower than the nominal value). With thisprovision, the legislator aimed at situations in whichthe company got bankrupt after deconsolidation. Inour view, this provision can not be applicable if acompany does not get bankrupt or a bankruptcy willend due to a creditor’s compromise.Taking into account the history and the wording ofthis provision, the application of this provision couldbe open for discussions with the tax authorities. Thepotential lower valuation of the debt and thecorresponding taxable profit of this lower valuationwill be triggered before termination of the fiscal unity.To the extent that this taxable profit exceeds theamount of taxable losses and, consequently, leads totaxes to be paid, this tax is due by the parentcompany of the fiscal unity and not by thedeconsolidated subsidiary. However, the subsidiary isjointly and severally liable to all tax liabilities that havearisen during the period that this subsidiary was partof the fiscal unity. Therefore, this subsidiary can be heldliable for the incurred tax liability if the parentcompany is not able to pay off this liability.Waiver of debtsAs described above, intra-group receivables and loansare disregarded for tax purposes during the lifespan ofthe fiscal unity. Therefore, a waiver of intra-group loansduring the existence of the fiscal unity has no taxconsequences. The analysis is different if the waiver ofintra-group debts takes place after termination of thefiscal unity. A waiver does in principle result in a taxableprofit at the level of the debtor. Based on a statutoryprovision, the profit as a result of the waiver is exemptto the extent it exceeds the sum of the existing losses.In other words, in case of a waiver the debtor does nothave to pay any taxes but has to give up its taxablelosses (with a maximum of the amount of the waiver).However, if the debtor was part of a fiscal unity inthe six years prevailing to the waiver, not only thetaxable losses of the debtor should be taken intoaccount but also the losses that the debtor incurredduring the period that it was part of the fiscal unity.Assuming that no losses were attributed to thedebtor upon termination of the fiscal unity (as theselosses were offset against profits of other fiscal unityentities and/or because the parent company did notagree to attribute losses to the subsidiary), the waivercan nevertheless lead to a taxable profit at the levelof the debtor.ConversionA conversion of a debt into equity does not result in aprofit at the level of the debtor. Therefore, nocorporate income tax (nor any other tax) will be dueupon conversion. If the debt that will be converted intoequity is owed by the parent company of the fiscalunity, the conversion will not result in a termination ofthe fiscal unity. However, if the debt is owed by thesubsidiary, the creditor will acquire shares in thesubsidiary as a consequence of the conversion. If theparent company will not continue to own at least 95%of the shares in the subsidiary as a result of theconversion (one of the requirements for a fiscal unity),the fiscal unity will be terminated. In that case, theabovementioned points of attention should beconsidered again.STAK structureAs explained above, the so-called STAK structure canbe used as an alternative approach in restructurings. ASTAK is only subject to Dutch corporate income tax ifand to the extent it carries out a business. The mereholding of the shares by a STAK is generally notconsidered a business. Hence, the STAK should not besubject to corporate income tax. Also, for corporateincome tax purposes not the STAK but the holders ofthe depositary receipts in respect of the shares will beconsidered the owners of the shares. Although a STAKis the legal owner of the shares, the ownership forDutch tax purposes lies with the holders of thedepositary receipts. From a Dutch tax point of view, aSTAK is considered a nominee.Please note that the acquisition of shares in acompany may be subject to real estate transfer tax ifthe assets of the company mainly consist of (Dutch)<strong>13</strong>4

Share* theexpertise...www.loyensloeff.com Contact Share the expertise.AmsterdamHendrik van Druten (corporate)*

eal estate. The interposition of a STAK will in principlealso be subject to real estate transfer tax. However,provided that certain conditions are met, real estatetransfer tax can be avoided. Those conditions areaimed to ensure that the depositary receipts can beequated with the underlying shares.Given the tax treatment of the STAK as describedabove, using a STAK in restructurings should inprinciple not have adverse tax consequences. However,an interposition of a STAK between a parent companyand a subsidiary that are part of a fiscal unity couldlead to a termination of the fiscal unity. For the sake ofcompleteness, we would like to note that suchinterposition of a STAK does not necessarily lead to atermination of a fiscal unity if voting rights areexercised by the STAK as legal owner further toinstructions by the shareholders. However, a STAK isoften used in international restructurings to separatethe economic rights and the voting rights and will thusin practice lead to a termination of a fiscal unity.ConclusionIt is recommended to consider the tax consequencesof the enforcement of a security right in advance if acompany is part of a fiscal unity. The consequence of atermination of a fiscal unity without the approval of theshareholders is that the taxable losses of a companywhich are incurred during the lifespan of the fiscal unitycan not be used any more by the deconsolidatedcompany. A waiver of debts to the amount of the lossesis not exempt and can therefore result in a tax liability.This undesirable effect can under certain circumstancesbe prevented by an efficient tax structure. If this is notpossible, a restructuring in consultation with theshareholders might be preferred. A STAK structure iscommonly used to separate the legal and beneficialownership of the shares. The interposition of a STAKcould in principle be achieved without adverse taxconsequences. If the shares in a company that is part ofa fiscal unity will be transferred to a STAK, such atransfer could lead to a termination of the fiscal unity.Authors:H.F. van Druten, PartnerTel: +31 (20) 578 5925Fax: +31 (20) 578 5843Email: hendrik.van.druten@loyensloeff.comV.R. Vroom, LawyerTel: +31 (20) 578 5984Fax: +31 (20) 578 5843Email: vincent.vroom@loyensloeff.comA.C.P. Bobeldijk, PartnerTel: +31 (20) 578 5415Fax: +31 (20) 578 5160Email: arco.bobeldijk@loyensloeff.comLoyens & LoeffFred. Roeskestraat 1001076 ED AmsterdamThe NetherlandsWebsite: www.loyensloeff.com<strong>13</strong>6

<strong>Restructuring</strong> in Portugal– the time has come!by José Luís Silva, KPMG PortugalThe global financial crisis caused a massive increase in financial restructuringactivity around the world in the recent past. Nevertheless, in Portugal, anddespite the fact that the Eurozone crisis changed the global picturedramatically, there was not a significant behavioural change in the way toapproach the restructuring of distressed businesses.Without any doubt there was a significant wave of financial restructuringsin the last two years, with much rescheduling on the debt service plans,waiting for the underlying growth of the (global) economy to take place, andsupporting the turnaround of those businesses. Unfortunately, growth is notyet taking off and, to the contrary, further market contraction impacting onconsumer spend is expected, as well as a long-lasting contraction in businessto-businesstransactions, M&A activity and sovereign balance of trade; this candetermine the absence of exogenous conditions for companies to materialiseturnaround strategies.In fact, the crisis effect seems to be different from anyprevious experiences. Portugal is facing a severeadjustment plan agreed with the IMF/EU, which isintended to deliver a significant reduction on thegovernment deficit to 5.9% of GDP in 2011, 4.5% in<strong>2012</strong> and 3.0% in 20<strong>13</strong>. The adjustment plan to deliveris tremendous and includes (non-exhaustive):Structural measures:• Accelerate the privatisation programme.• Avoid engaging in any new PPP before thecompletion of the review of the existing PPPs.• Reduce operational costs by the end of 2011 andapply tighter debt ceilings to SOEs from <strong>2012</strong>onwards.• Reduce management positions and administrativeunits by at least 15% in the central administration.• Reduce the number of municipality offices by atleast 20% per year in <strong>2012</strong> and 20<strong>13</strong>.• Reorganise local government administration.• Limit staff admissions in public administration toachieve annual decreases in <strong>2012</strong>-14 of 1% per yearin the staff of central administration and 2% in localand regional administrations.• Banks’ regulation imposing core Tier 1 capital ratio of9% by end-2011 and 10% at the latest by end-<strong>2012</strong>and maintain it thereafter.<strong>2012</strong> revenues and expenses measures:• Improve the central administration by eliminatingredundancies, increasing efficiency, reducing andeliminating services that do not represent a costeffectiveuse of public money.• Reduce costs in the area of education, byrationalising the school network.• Ensure that the aggregate public-sector wage bill asa share of GDP decreases in <strong>2012</strong> and 20<strong>13</strong>(limit staff admissions, freeze wages and reducecosts of health benefits schemes for governmentemployees).• Control costs in health sector.• Reduce pensions above €1,500.• Reform unemployment insurance.• Reduce transfers to local and regional authorities.• Reduction of corporate tax deductions and specialregimes.• Reduction of personal income tax benefits anddeductions.• Apply personal income taxes to all types of cashsocial transfers and ensure convergence ofpersonal income tax deductions applied topensions and labour.• Changes in property taxation to raise revenue byreducing substantially the temporary exemptionsfor owner-occupied dwellings.• Raise VAT revenues.Labour market and education measures:• Reducing the maximum duration of unemploymentinsurance benefits to no more than 18 months andcapping unemployment benefits at 2.5 times thesocial support index.• Reducing the necessary contributory period toaccess unemployment insurance from 15 to 12months.• Reform the severance payments for new hires andalign severance payment entitlements for currentemployees in line with the reform for new hires.• Reform proposal aimed at introducing adjustmentsto the cases for fair individual dismissalscontemplated in the Labour Code.<strong>13</strong>7

Housing market measures:• Amend the New Urban Lease Act Law 6/2006 toensure balanced rights and obligations of landlordsand tenants, considering the socially vulnerable.• Property taxation amendments with a view to levelincentives for renting versus acquiring housing.Despite the significant economic contraction in theshort/medium term, resulting from the abovemeasures, the effects of the current economic andfinancial crisis are being felt far beyond the countrylevel, and all turbulence within Eurozone borders ismaking the future more uncertain. What happens inSpain, Italy and (to a certain extent) Greece willdefinitely be key to determine when the economicdownturn may come to an end and what will be themonetary scenario going forward.On top of the Eurozone environment, the USeconomy is still passing through turbulent times, whileChina’s macroeconomic growth has slowed down asexternal trade has fallen due to the impact of theeuro crisis and American debt crisis and even the factthat China overtook Germany as the world’s largestexporter in 2010, does not bring enough confidenceto accept China as the World’s growth engine in thenext decade.With this background, balance-sheet restructuringwill not (solely) be enough to guarantee the survivalof distressed businesses/companies. Contemplatinganother three to five years of low or no growthshould lead to a radically different approach. Lenderscannot simply accept wishful thinking business planswithout any adherence to expected difficult times.Regardless of the euro meltdown scenarios thatwe can possibly imagine, it will not be possible tosustain the economic turnaround without acompletely new way of doing things, which will bedependent on the capacity to enforce keytransformational measures.Portugal is being supported in its adjustment planby the IMF/EU and, likewise, other companies willneed economic/financial adjustment plans to benegotiated and closely monitored. This will lead toinsolvency playing a much bigger role and turnaroundplans to be much more all-encompassing than the“excel business plans” we have seen in the past.A new insolvency law is expected to be in force inthe next few weeks (expected to be in force whenthis article is being read), which arguably willsignificantly facilitate the restructuring scenarios ondistressed situations. Existing insolvency law (DecreeLaw nr. 53/2004, amended by Decree Law nrs.200/2004; 76-A/2006; 282/2007; 116/2008; and185/2009) experience is that, in most cases, the end isthe liquidation proceedings, whilst the new Lawintends to bolster companies’ viability scenarios.Expected major improvements of this new<strong>Insolvency</strong> Law are related to:• a decrease of the notice period to requestinsolvency and for creditors to claim for theircredits;• the possibility of accelerating the sale of assetsbased on insolvency administrator’s judgment;• strengthening the power of the insolvency judgeto take decisions based on its assessment of thecircumstances;• additional protection for creditors intervening onpre-insolvency restructuring agreements;• several processes simplification and proceduressoftening; and• last but not the least, the possibility of having legalenforceability for extra-court restructuringagreements, provided such agreements are signedbetween the debtor and a qualified majority of thecreditors of the company.Let us wait and see the merits of the new legalenvironment, but please do not expect too muchfrom this new Law. Lenders, companies, shareholders,management, workers, tax authorities, courts, etc. willstill be the same!It will be critical going forward to really make adifference, that the several company’s stakeholders(typically the lenders, workers, tax authorities andshareholders) can identify clearly the reasons behindthe underperformance and objectively discuss theconditions for an effective turnaround, which willprobably rely significantly on all parties accepting tolose something, investing more, and bearing some(extra) risks. This is only possible with a strongmanagement and leadership driving the turnaroundexercise and a close monitoring of the action planagreed between different creditors/stakeholders.With the recent reinforced trend for restructuringfunds set up in Portugal, a real opportunity for “realrestructuring exercises” is taking place. Although it hasbeen set up on the basis of banks’ distressed assets,derecognised or not (depending on the nature andscope of the transaction) from the banks’ balancesheets, those restructuring funds are aimed to bring acompletely new approach, with aprofessional/customised and informed approach tothe restructuring initiatives.While this is not an exhaustive list, we couldmention a few examples of what we consider key tomaximise the potential success of any restructuringexercises under the current economic environment inPortugal for a significant majority of the businessesunder pressure, as follows:Increasing the top lineMaximising the installed capacity and/or reducing wasteon existing capacity, focusing on new markets (e.g.<strong>13</strong>8

Are you closerthan you think?Right now your company is on track, isnt it? Butwhat happens if one of your clients goes down?What if a major supplier can no longer supply? Alltoo likely just now. Thats why you should talk toKPMGs professionals, because early planningcan make all the difference.We know how to read the danger signals,and what action to take in good time. Infact, some challenges can disappear justby having us on board. And by workingthings through together, you wont bederailed by the unexpected. So youcould emerge from these hazardoustimes stronger than ever. Talking toKPMG could mean not just survivingthe downturn, but thriving on it.For more information,please contact:José Luís SilvaHead of <strong>Restructuring</strong>KPMG in Portugaljlsilva@kpmg.comkpmg.pt© <strong>2012</strong> KPMG II - Consultores de Negócios, S.A., a Portuguese company and a member firm of the KPMG network of independent memberfirms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. The KPMG name, logo andcutting through complexity are registered trademarks of KPMG International Cooperative (KPMG International).

exports) or market segments (e.g. green/health growingniches), increasing the value added of company’sproducts/services, and using new sales channels (e.g.Internet), are some of the alternatives to be carefullyanalysed. This assessment will be key to determiningthe potential for turnaround, but it should not be atheoretical exercise only. Growth perspectives are to bedeeply challenged and supported by specific analysis ofthe customers and products alongside with marketstudies, as well as proper understanding of the salesprocess (including logistics) and comprehensiveincentive sales plans.Another option to address growth is theopportunity for consolidation that is increasingly onthe table as competition struggle/collapse, whichshould not be seen as a cost-saving only opportunity,but must have a commercial rationale as well, withidentifiable opportunities for complementary productmix, markets or clients.In summary, it will be key to identifying specificactions to increase the top line, even with theexpected economic downturn, bearing in mind thatthrough consolidation or organic growth (volume orprice), it will be almost impossible to qualify for asuccessful turnaround, if no specific growth areas areidentified.Cost optimisationAfter having this as a top priority in the last fewmonths, with some cost savings already delivered thiswill represent a real challenge for the majority of thebusinesses, but not an impossible mission. It will requirea very detailed and systematic exercise of revisiting thefull operating model of the company, as if a greenfieldoperation is being setup.A typical mistake is to find savings by analysinghistorical cost structures and determine saving targets.This may help to find some efficiency, but will not betransformational for the company.The “blank paper” exercise is not an easy exercise,and will probably end up with a significant mismatchon the number and qualification requirements of yourpersonnel structure, as well as other significantsurprises on the unnecessary costs being borne by thebusiness. Significant required changes are anticipatedto increase productivity. On the staff side, the mostsensible one, it will be the time for open and honestcommunication. Undoubtedly, labour laws are key forthis analysis and may represent a key constraint, butnot running the exercise will not create the businesscase to challenge unions, workers associations orindividuals.The exercise should not be a backoffice/administrativetasks’ optimisation exercise only,since all production/operation should be challenged,but on those areas the expectation is that hugesavings are possible, regardless of whether thecompany is already operating on a shared servicesgroup basis.Cash and working capital optimisationThis is one of the tremendous potential areas forimprovement on most Portuguese companies.Reducing working capital and restricting cash paymentsduring difficult periods cannot be called ‘cash andworking capital management’.Before being able to set up a proper cashmanagement strategy, the company needs to answerquestions as follows:• Is there a cash forecasting (short/medium andlong-term) procedure in place? Although not many‘yes’ answers are expected, the accuracy of suchforecasting exercises needs to be assessed.• Who is responsible for the inputs and formonitoring deviations? The ones in-charge ofinflows or outflows should be involved and holdaccountable.• Are your creditors (including banks) familiar withyour outflows forecast and happy with its reliabilityand robustness?• Have your procurement terms (cost, paymentperiod, service level) been optimised recently?• Do you have the inventory required by thebusiness or the one you could not sell?• How much do you know about your clientspayment strategy/procedures and cash constrains?Can you find alternative mechanisms to increasecertainty of inflow forecasts?• Do you manage your cash or you simply look intowhat is available?Cash and working capital management can besubject to improvement initiatives if key drivers areproperly identified and measured over time, and giventhe poor (or lack off) existing cash managementpractices amongst Portuguese companies, significantbenefits can be anticipated from specific action inthis area.Proper and enthusiastic managementLeadership is missing! If the business is facing adownturn it is probably because it is facing a lack ofproper management and/or leadership, unless the crisisis all across the sector. Even in this scenario, thecompanies that will successfully and firstly complete theturnaround will be the ones having a robust, proactiveand enthusiastic management that is able to lead aquite demanding restructuring exercise.Engaging a Chief <strong>Restructuring</strong> Officer is stronglyrecommendable, not only because the type of issues,challenges and decisions require a specific expertisethat typical management does not have, but becausethe day-to-day business requires full concentrationand commitment from the management, which is140

even more evident in periods of crisis. This functionmay also help in identifying and assessing existingmanagement competencies, which will also be criticalto implement any viability plan.CAPEX budgetTurnaround plans can be expensive. It does not makesense to discuss a medium to long-term turnaroundplan if no investment capacity is anticipated.There are few ways to reduce the cashflowrequirements, namely (but not limited to) mergersand/or divestment/sale of non-core assets/businesses,but in many cases additional financing will need to beengaged with the turnaround exercise. As referred toabove there is some good news on this matter, as thenew <strong>Insolvency</strong> Law in Portugal will allow new capitalbeing invested on restructuring of distressedbusinesses to get protection over other creditors onan insolvency scenario, which may represent a keyincentive to investors.Adequate financial structureAs we know, Portuguese banks have been pushed bythe IMF/EU bailout conditions to significantly reduce itsleverage ratio, as well as to increase Tier 1 Capital, thusrefinancing during <strong>2012</strong> will be a substantial challenge tomany companies that leveraged for decades on veryshort-term working capital facilities (automaticallyrenewed).Between the lenders and the company, clarity andconfidence will be key to ensuring that the companykeeps trading and getting the necessary funding for itsoperations, but also for the lenders to understandmoney flow requirements and protect theirinvestments.The best way to achieve this target is to have arobust business plan discussed between the parties,with all sensitivities and possible ‘stress tests’, allowingfor contingency scenarios being discussed and agreedupfront.ConclusionWe are living through unpredictable times. In Europe,politicians and central banks are struggling to resolvedebt crisis, and this is undermining the economicstability of the continent, pushing economies likePortugal to its limits. Even on an optimistic scenario, thechallenge for Portugal is to deal with medium-termresidual/no growth, and Portuguese companies will befacing tougher competition and margin decreases, lackof liquidity, and discovering that some managementconcepts forged in previous years are outdated.<strong>Restructuring</strong> will be the key initiative in the comingyears, but bearing in mind that survivors will be thosethat are able to ask different questions aboutthemselves and reinvent their business models, as therewill be no second chances or time for experiments. Interms of restructuring the time has come!Author:José Luís Silva, Head of <strong>Restructuring</strong>KPMG PortugalEdifício Monumental Av. Praia da Vitória, 71 - A, 11º1069-006 LisbonPortugalTel: +351 210 110 000Fax: +351 210 110 121Email: ptkpmg@kpmg.comWebsite: www.kpmg.pt141

Russia: Emerging playground fora savvy distressed investorby Alexei Evgenev, Maxim Frangulov and Elena Tsaturova, Alvarez & Marsal CIS LLPFor an international player, Russia continues to be a relatively exotic place toinvest. The tested legal environment, investor protections, businesstransparency and predictable political landscape in the North American andWestern European economies, not withstanding their multiple challenges,offer the level of comfort and risk control which often outweighs thepotential of higher returns in the land of opportunity called Russia. But forthose willing to learn and take the risk with distressed assets, a change maybe on the cards.Over the last three years, it was restructuring, bothfinancial and operational, where Alvarez & Marsal, as arestructuring and turnaround specialist firm, have seenthe nascent rise of the use of traditional techniqueswhich are so familiar and proven effective in the West.It is the tendency to employ true and realrestructurings based on the objective view of thebusiness cash generation potential and value, completewith operational turnaround, balance sheetrecapitalisation, increased business transparency andsophistication of lenders that creates investmentopportunities for both financial and strategic players.Russia is on the way to evolutionally adhere to thisglobally accepted restructuring approach.Macroeconomic outlookRussia is steadily recovering from the economicdownturn in 2008–09. The GDP growth rate isestimated to be 3.7%-3.8% in <strong>2012</strong> and will not bematerially different going forward should the crude oilprices stay at the forecasted levels.Near term, the Russian economy will continue toheavily rely on the oil and gas revenues, althoughthere is a hope that a concerted effort will be put todiversify the Russian economy to grow the share ofnon-O&G industries. Until the reliance on oil and gasdiminishes, the ruble exchange rate is likely tocontinue to fluctuate with the oil price rather thanfollow the traditional purchasing power parity rule.Managing inflation remains a priority of the CentralBank of Russia – inflation rates are projected to dropby just over 5% already in <strong>2012</strong>. These inflation targetsmay sound stretchy but the record low inflation rateat 6.1% achieved in 2011 demonstrates the opposite.Russia remains underestimated compared to otheremerging market countries. Based on Troika’s analyticalresearch, Russian stocks are cheap with forecasted P/Emultiple for <strong>2012</strong> of just 5.5 times compared to anaverage 8.5 times for emerging market countries.With the economy of the size of Italy or Spain, butwith one-third of GDP per capita of these countries,Russia still has a significant growth potential in thenear future while currently offering a more stableeconomic environment compared to the peripheralWestern European countries.Currently in Russia there is strong political demandand promise to make Russia a more investor/businessfriendlyplace, with more transparent businesspractices, legal protection of investor and businessrights, and a fight against corruption. Besides, Russia’smembership in the WTO will accelerate internaldemand for modernisation and change by bringingnew foreign entrants to the Russian market andstimulating local competition.Figure 1: Russian economic key data2010 2011 <strong>2012</strong>E 20<strong>13</strong>E 2014EGDP* 104.0 104.1 103.7 104.0 104.6Urals* 78.2 108.0 100.0 97.0 101.0GDP World Bank 104.0 104.0 103.8 103.5 103.5Urals World Bank 78.2 108.7 99.0 95.5 92.7CPI* 106.8 106.1 105.1 105.9 105.2Note: *Russian Ministry of Economy, moderately optimistic scenario142

Figure 2: Oil and gas revenues140120100806040200323<strong>13</strong>029282726Urals price, US$/barrelR/US$Jan 10Mar 10May 10Jul 10Sep 10Nov 10Jan 11Mar 11May 11Jul 11Sep 11Nov 11<strong>Restructuring</strong> market outsetIn 2008 Russia faced a deep, prolonged economy-widecrisis. As in prior years borrowing for growth andacquisitions proliferated against the backdrop of thebooming economy and skyrocketing real estate values,all accompanied by lax lending standards and financialmarkets happily providing liquidity and capital, manycompanies entered the crisis overleveraged andsuddenly unable to service the debt (various estimatesput volume of non-performing loans (NPLs) at as highas 40% of the banks’ corporate portfolios). It wasnatural that Russian constituencies, both on the creditorand debtor sides, had virtually no experience and noprofessionals to deal with the distress spread wideacross the industries, sectors and businesses.In 2008 approximately half of corporate lending inRussia was concentrated with the largest state-ownedbanks namely Sberbank (commercial), VTB(commercial) and Rosselkhozbank (Russian agriculturalbank). VEB as a State policy-driven lending institutionbecame affected by bad corporate loans and wasobliged by the State to refinance Russian corporationsoverleveraged by foreign debts. These financialinstitutions were relatively unprepared to handle thevolume of distressed situations in their corporateportfolios. Workout on such a scale was a newchallenge, and the banks were pressed to learn fasthow to deal with the massive flow of bad debts. Theyhave chosen a number of routes, including old, good“pretend and extend” quasi-restructurings, transfer ofnon-performing loans (NPLs) to the newly establishedaffiliates dedicated to troubled loan management and,on rare occasions, leveraging single externalturnaround professionals usually based on thepersonal liaisons with individuals.Most of these measures did not offer a sustainablelong-term solution, but bought the banks’ valuabletime (and compliance with capital requirements) todevelop internal restructuring procedures and nurtureinternal workout specialists. By the end of 2011 NPLsoriginated in 2008 have been resolved by the majorbanks in one way or another.The 2008 crisis did not create a secondary marketfor corporate NPL portfolios. A typical large or midsizeddistressed debtor was a private Russiancompany with no clear legal structure or IFRSreporting which, in turn, hampered lender’s attemptsto put a fair price on the asset. Smaller banks heldtroubled corporate portfolios, small and nondiversified(usually secured by overvalued real estate),not interesting for potential buyers.Currently, the key impediment to thedevelopment of the traditional restructuring market inRussia remains a combination of lenders’ limitedcapacity and willingness to discount/write-off“underwater” loans and often unreasonable andunsubstantiated valuation expectations of the owners.This combination, in many cases, results in the partiesdefaulting to the “do nothing” option, crossing theirfingers and praying for the best. Again, it is not asustainable solution, and constituencies will have todeal with the problem sooner or later. We see thatthe change is in the wings. The lender’s learning curveof the restructuring process is getting steeper. It isencouraging to see that the Western restructuring andturnaround techniques have started to be tested andsuccessfully incorporated by the Russianconstituencies. Sberbank, in particular, is leading thechange, more frequently forces the issue with thedebtors, rallying support for the proper process andresult in situations with multiple lenders. The rangecovers major tools, such as:• Consolidating lender position and bargaining powerthrough syndication: GAZ, KTZ.• Crisis and interim management: Mosmart.• Discounting and sale to a strategic partner: Izhavto.143

Another constituency to be noted is the Statewhose interests are expressed by the state-ownedbanks and governmental agents and the restructuringprocess related to the companies owned by theState/affected by the interests of the State is guided bythe political rather than the market logic.The only constituency parked on the sidelines ofthe restructuring process are unsecured bondholders.This is a large group, often international financialinstitutions, which bought (literally) into the stories ofRussian issuers in the years before the crisis. Thisarticle is not the place to judge the stories, but it isclear that the downside protection of the bondholders has been poor. Forget about covenant-lite. Theindenture documents look more like NINJA creditagreements at the height of the subprime lendingbubble. So, at least for now, Russian unsecured bondissues are not a factor in restructurings.Corporate lending and liquiditytrendsIn the near future Russian corporate lending(particularly for medium and large businesses) willcontinue to be highly concentrated with the largest fourstate-owned banks named above. These banks,Sberbank and VTB in particular, are expected toaggressively grow their corporate portfolios. The growthis likely to come by taking the market share frominternational banks and smaller commercial banks. Someof the smaller international banks are heading for theexit due to the pressures facing their parent banks, andsmaller Russian commercial banks will be consolidatingto address the new tightening capital requirements.The liquidity accessibility will not be “like it is 2007.”The foreign capital, either through Russian operationsof the international financial institutions or through theinternational capital markets, is shut down or highlyspeculative (=super expensive) in nature. Commercialbanks have limited ability to lend as they continue toclean up their corporate portfolios and watch thecapital ratios. Sberbank and VTB have gained valuableworkout experience from the crisis, put internal riskmanagement processes in place and are becomingmore selective in their lending practices.<strong>Restructuring</strong> play: Pros and consWith the slow economic recovery and the refinancingwall of the “pretend and extend” restructurings loomingin <strong>2012</strong>–<strong>13</strong>, a large pool of distressed assets is likely tocome to the market. There will be options related notjust to specific distressed assets, but to the wholeindustries.While “new economy”, i.e. enterprises created andgrown in the last 10–15 years, primarily consumergoods companies, are in good shape operationally, the“old economy” businesses, especially in industrialproducts sector are outdated, require technologyupgrade, investments in fixed assets and in adequateERP systems. In return, these undervalued assets canopen the door to the Russian market and create aninteresting play in industry consolidation for strategicinvestors.Attractive, high (real or potential) growthindustries (e.g. retail) remain fragmented and couldalso provide industry consolidation benefits for bothfinancial and strategic investors.Additionally, there are optimistic (from arestructuring point of view) signs of the owner desirefor a sustainable restructuring stemming from thefatigue of the never-ending fight to stabilise thebusiness in the face of leverage and lender demands.The timing remains the key though, as need forrefinancing drives the price of the assets down andonce this burden is overridden, the price tag will go upagain. Besides, there are internal (e.g. profitability, cashgeneration) and external (e.g. joining WTO) pressuresthat force the issue of the operational improvementsto realise value, improve competitiveness, get access tocapital markets. These pressures are not simplyleverage and creditor driven, it is a necessityrecognised by the business owners as well.Distressed investor concernsOne of the major challenges to plan and executechanges and improvements in the distressed businessesis an availability of the experienced management pool.Expat option has not proven to be very efficient andeffective in the Russian environment, and a localprofessional, western-style management has come intoexistence just less than 15 years ago. Turnaroundexecutives, with experience and successful track recordof stabilising distressed businesses and drivingoperational change, are few and far between. Themarket of outsourced restructuring and turnaroundprofessionals is still in its formation with no unifiedmethodology and solutions standards set there yet.Another typical area of concern for a distressedinvestor is proper management reporting and financialcontrols. Russian accounting standards, despiteconsiderable efforts applied for convergence withIRFS, remain primarily tax-reporting driven, and usuallygive limited visibility of the state of the business. Butthe lack of management reporting is common indistressed companies. No news here: adequatereporting and financial controls are hard to come byat companies in trouble anywhere in the world, nomatter how developed a country is and how manyMBAs it produces. The good news is that all the toolsand techniques (cash disbursement controls and cashplanning, like a rolling <strong>13</strong>-week cash flow forecast,144

Whether serving as trusted businessadvisors or in interim management roles,Alvarez & Marsal delivers results whenyou need them most.YourNextMoveMattersInterim and Crisis ManagementTurnaround and <strong>Restructuring</strong>Operational and Financial Performance ImprovementBusiness Advisory ServicesSpecialized Industry Expertise» 1,700 professionals worldwide» Nearly 40 global locations» Ranked among the top crisismanagers by The Deal» Turnaround Management (TMA)Awards and Recognition:2011 - Chemtura2010 - Rossignol2009 - Interstate Bakeries2007 - Sourcelink and Treofan2006 - Ihr Platz2005 - Spiegel2004 - Americo / U-Haul2003 - Warnaco Group» Ranked Among the “BestFirms to Work For” by Consultingmagazine and VaultLEADERSHIPPROBLEM SOLVINGVALUE CREATIONwww.alvarezandmarsal.com

working capital management, meaningful monthlybudgets and operational and financial reports), anexperienced distress investor is used to seeing andusing, can be successfully implemented and work inRussia. We know, we have done it. In fact, in Russiawhere the business owners are traditionally focusedon cash and cash management, it is sometimes a lesserstress on the organisation to introduce propertreasury controls than in Western companies.While the insolvency law application is notoriouslyinefficient, resulting in eclectic restructuring “bedpartners” and strange consensual deals, well-testedcollateral enforcement tools and methods allow loanto-ownconversions of assets and businesses. Ofcourse, the process is usually complicated by theconvoluted legal structures, the legacy of frenzy dealmakingactivities and tax optimisation actions. Still, thecomplexity and the associated risks are manageable.ConclusionRussia is in the beginning of its journey to become adistressed investor playground, but the foundation isbeing laid today. For an early entry investor, theopportunity to earn the returns commensurate or inexcess of the risks is here, the banks are learning toplay by the rules, and experienced professionals areready to guide you through the intricacies of theRussian environment and assist in execution.Authors:Alexei Evgenev, Managing DirectorMaxim Frangulov, Managing DirectorElena Tsaturova, Senior DirectorAlvarez & Marsal CIS LLPSadovnicheskaya Street 14/2MoscowRussia 115035Tel: +7 495 988 7745Email: aevgenev@alvarezandmarsal.commfrangulov@alvarezandmarsal.cometsaturova@ alvarezandmarsal.comWebsite: www.alvarezandmarsal.com146

<strong>Review</strong> of developments in insolvencylaw in Singapore for 2011by Sushil Nair, Drew & Napier LLCThe period in review has seen a slight dip in Singapore’s economicperformance. 2011 saw Singapore’s economy grow by a mere 5%, in contrastto the 14.8% growth figure recorded in 2010. The relatively small growthpercentage for 2011 is largely due to weak performances across severalsectors in the fourth quarter. Against the subdued global situation andstructural weaknesses in some of Singapore’s major trading partners,economic activity in Singapore is likely to remain restrained in <strong>2012</strong>, withGDP growth predicted to slow to 1%-3%, the weak manufacturing sectorbuffered by a resilient services sector.Despite the global financial and economic stresses, Singapore’s financialmarkets continued to function in an orderly manner. Domestic interest ratesremained low in 2011, due in part to the policies of the US Federal Reserve.This has allowed businesses to gain greater access to credit, thereby boostingliquidity in the corporate sector and leading to an increase in corporateearnings. That said, corporate borrowing remained on the cautious side, as thedeterioration of the global economy induced worry of the ability to servicedebt in the event of an economic downturn. Fund-raising activity in the capitalmarkets grew, with increases in corporate debt issuances and the amountsraised by initial public listings. However, domestic financial markets are notimmune to contagion shocks if the advanced economies suffer setbacks.For the year 2011, the number of insolvency law cases was relatively low.However, a number of interesting insolvency issues were brought before theSingapore courts.Statutory demands under Section254(2)(a) Companies ActUnder Section 254(2)(a) of the Companies Act, acompany is presumed insolvent when a statutorydemand is made against the company for a sumexceeding S$10,000 and the company fails to pay thesum within three weeks. This presumption is what isusually relied upon for the filing of an application towind up a company.The High Court in United Fiber System Ltd v ChinaNational Machinery & Equipment Import & Export Corp[2011] 2 SLR 1021 clarified that a bona fide actionbrought to dispute a debt has the effect of suspendingthe running of time for payment for the purposes ofSection 254(2)(a) of the Companies Act until thedispute is resolved, since the non-payment of adisputed debt cannot logically give rise to apresumption of insolvency. In that case, since thecompany had brought its claim against the creditorpromptly after the issuance of the statutory demand,the 21 days for payment was held to only start to runfrom the date of the judgment that was eventuallyobtained against the company.The High Court in Pacific King Shipping Pte Ltd andanother v Glory Wealth Shipping Pte Ltd [2010] 4 SLR4<strong>13</strong> determined that a creditor is not precluded fromissuing a statutory demand under Section 254(2)(a) ofthe Companies Act based on a debt that is foundedon an arbitral award. The High Court noted that therewas no authority cited for the proposition that a partyholding a foreign arbitration award is obliged toenforce the award only by way of enforcementproceedings under the International Arbitration Actand is thereby precluded from issuing a statutorydemand based on a foreign arbitration award.Resisting a winding up applicationIn Denmark Skibstekniske Konsulenter A/S I Likvidation(formerly known as Knud E Hansen A/S) v Ultrapolis 3000Investments Ltd (formerly known as Ultrapolis 3000Theme Park Investments Ltd) [2011] 4 SLR 997, the HighCourt decided, as a preliminary issue, that the standardof proof that a debtor company had to meet in orderto resist a winding-up application was no more thanthat for resisting a summary judgment application, i.e.the debtor company need only raise triable issues. Thisstandard of proof applied equally to all ‘cross claim’ and‘disputed debt’ cases, regardless of whether the defencewas mounted before or after the winding-upapplication was filed.147

Effect of a winding-up orderIn Kong Swee Eng v Rolles Rudolf Jurgen Augus [2011] 1SLR 873, the plaintiff and the defendant entered into asale-and-purchase agreement whereby the defendantcontracted to sell shares in Golden Oriental Pte Ltd(‘Golden Oriental’) to the plaintiff. The plaintiff paid adeposit of S$500,000 for the shares. Thereafter, awinding-up petition was filed against Golden Orientalby a company controlled by the plaintiff. In the suit, theplaintiff claimed that she had been released from hercontractual obligation to complete the sale-andpurchaseagreement and was thus entitled to a refundof her deposit. The plaintiff argued, inter alia, that theagreement had been frustrated by the winding up ofGolden Oriental, as the shares no longer existed as aresult of the winding-up order. The court, referring toAustralian and New Zealand authorities, held that thewinding up of a company does not frustrate a contractfor the sale and purchase of its shares.Stay of proceedings and automaticdiscontinuance under Rules ofCourtOrder 21 Rule 2(6) of the Rules of Court (Cap 322, R5, 2006 Rev Ed) states that a cause or matter isdeemed automatically discontinued if no step is taken inthe proceedings for a year. In the High Court case ofLaserResearch (S) Pte Ltd v Internech Systems Pte Ltd[2011] 1 SLR 382, the court determined that wheneveran action is automatically stayed by operation of Section299(2) of the Companies Act, which provides that afterthe commencement of a winding up no proceeding canbe commenced or proceeded with without leave ofCourt, the action is excluded and is not subject to theone-year period prescribed by Order 21 rule 2(6) ofthe Rules of Court.The court cautioned, however, that this does notmean that the creditor whose action is stayed byoperation of Section 299(2) of the Companies Actcan take an indefinite amount of time to decidewhether it wants to proceed by litigation in court. Ifthe creditor of a company in liquidation comes beforethe court after an unreasonably long time to seek a liftof the stay pursuant to Section 299(2) of theCompanies Act, the court would have justifiablereason to refuse unless otherwise persuaded.Schemes of arrangementThe Royal Bank of Scotland NV (formerly known as ABNAmro Bank NV) and others v TT International Ltd andanother appeal [<strong>2012</strong>] SGCA 9 was a landmarkdecision in which the Court of Appeal recognised theimportance of schemes of arrangement and clarifiedseveral issues in the law on schemes of arrangement.Under section 210 of the Companies Act, a proposalcan be made to a company’s creditors, at a meetingcalled with the Court’s approval, to compromise theirclaims. If that proposal is accepted by 75% in value anda majority in number of each class of creditorsattending the meeting, that entire class of creditors isbound by the proposal.In the case, TT International Limited (‘TT’) appliedfor and received approval from the court, pursuant toSection 210(1) of the Companies Act, to summon ameeting of its creditors to propose a scheme. Thescheme meeting was duly held and votes were cast.84.81% in number of the scheme creditors attendingin person or by proxy, representing 75.06% of thevalue of debts owing to the scheme creditors, votedin favour of the scheme. This barely exceeded thestatutory threshold of 75% of value required for theapproval of a scheme. A group of opposing creditors,dissatisfied with the result of the voting, wrote to TTseeking copies of the proofs of debt lodged by certainscheme creditors and other information regarding theother scheme creditors’ claims. The High Courtapproved the scheme and the opposing creditorsappealed against the decision of the High Court. TheCourt of Appeal allowed the appeal and set aside thesanction of the scheme, ordering further meetings tobe called for the scheme to be put to a revote. Inreaching its decision, the Court of Appeal addressedseveral issues in the law on schemes of arrangement:• first, the Court of Appeal clarified and explained indetail the procedure relating to passing a schemeof arrangement under Section 210 of theCompanies Act;• second, the court addressed the issue of a schememanager’s duties, and held that a proposed schememanager’s duties to administer the approvedscheme take on a fiduciary nature upon hisappointment as the scheme manager;• third, the court addressed the issue of whetherscheme creditors are entitled to examine the proofsof debt submitted by other scheme creditors inrespect of a proposed scheme. The court held thatscheme creditors are entitled to examine the proofsof debt only if the information in the proofs of debtis relevant to the creditor’s voting rights, and thecreditor produces prima facie evidence ofimpropriety in the admission or rejection of suchproofs of debt. If the scheme manager rejects ascheme creditor’s request for the disclosure of otherscheme creditors’ proofs of debt, the requestingscheme creditor may apply to court for an orderthat the proofs and supporting documentation bedisclosed. The court will then weigh the rights of theapplicant creditors against the collective interests ofthe other creditors and the company;• fourth, the court addressed the issue of when a148

scheme creditor should be notified of thechairman’s decisions to admit or reject its own andother creditors’ proofs of debt. The court held thatit was sufficient if, before the scheme meeting tookplace, all the scheme creditors were presentedwith the full list of scheme creditors entitled tovote and the corresponding quanta of their claimsthat were admitted for the purpose of voting;• fifth, the court held that a scheme creditor couldappeal the chairman’s decisions to admit or rejectits own and other creditors’ proofs of debt.However, the court would only override theprofessional judgment of the chairman if thechairman’s judgment was affected by bad faith, amistake as to the facts, an erroneous approach tothe law or an error of principle;• sixth, the court addressed the issue of when schemecreditors should be classified differently for votingpurposes in a scheme of arrangement. The Courtheld that the applicable test in Singapore is thatbased on the dissimilarity principle. The principlestates that if a creditor’s position will improve ordecline to such a different extent vis-à-vis othercreditors simply because of the terms of the scheme(and not because of its own unique circumstances)assessed against the most likely scenario in theabsence of scheme approval (e.g. insolventliquidation), then it should be placed in a differentvoting class from the other creditors; and• seventh, the court held that related party creditorsshould have their votes discounted in light of theirspecial interests to support a proposed scheme, byvirtue of their relationship to the company. Thecourt also held that generally, the votes of whollyowned subsidiaries should be discounted to zero.However, as an exception to the general rule,wholly owned subsidiaries may instead be classeddifferently.Pursuant to the Court of Appeal’s directions, afurther meeting was held. At the meeting, a majority innumber representing 76.34% in value of the schemecreditors in the general class of unsecured creditorsvoted for the scheme, and all of the scheme creditorsin the other class of creditors also voted in favour ofthe scheme. Accordingly, the Court of Appealsanctioned the scheme, subject to certain alterationsmade pursuant to its powers under Section 210(4) ofthe Companies Act.Definition of ‘creditor’ in thecontext of schemes of arrangementIn SAAG Oilfield Engineering (S) Pte Ltd (formerly knownas Derrick Services Singapore Pte Ltd) v Shaik Abu Bakarbin Abdul Sukol and another and another appeal [<strong>2012</strong>]SGCA 7, the Court of Appeal affirmed that, ininterpreting the term ‘creditors’ (which is undefined inthe Companies Act) in the context of Section 210 ofthe Companies Act, a wide approach should be taken.This was an approval of the approach taken by theAssistant Registrar in Pacrim Investments Pte Ltd v TanMui Keow Claire and another [2010] SGHC <strong>13</strong>4, whichwas the first and only other time that this issue hadbeen raised before the local courts.The Court of Appeal held that it should bepresumed, in the absence of contrary evidence, thatParliament, in enacting Section 210 of the CompaniesAct using wording identical to that of the variousequivalent English provisions, intended the word‘creditors’ in Section 210 to be given the meaningwhich had by then been regarded as settled inEngland. Thus, following Re Midland Coal, Coke and IronCompany [1895] 1 Ch 267, the court held that theword ‘creditor’ should be used in the widest senseand would include a creditor whose debt has not yetbecome payable and a contingent creditor, whether ornot his claim is provable and even if he has yet tomake a claim or is unknown, provided that the factsthat may give rise to his claim already exist.The court further held that tort claimants withunliquidated claims fell within this wide definition of‘creditor’. The court observed that tort claimants mayform a substantial class of a company’s creditors, andto exclude such claimants from the ambit of the term‘creditors’ would render Section 210 of theCompanies Act pointless. To address the issue thatthere is no machinery to quantify such unliquidatedclaims, the court held that such claimants should bepermitted to vote for the amounts for which theyestimate that the company is liable to them, providedsuch amounts appear reasonable. If there is anobvious error, the chairman of the scheme meetingmay correct the figure and admit it for the correctedamount, or may reject the claim altogether.Arbitrability of ‘claw-back claims’In Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in officialliquidation in the Cayman Islands and in compulsoryliquidation in Singapore) [2011] 3 SLR 414 the Court ofAppeal considered whether ‘claw-back’ claims, or claimsto avoid undervalue or undue preference transactions,were arbitrable. The Court of Appeal drew a distinctionbetween private remedial claims and claims that couldonly be made by a liquidator or judicial manager of aninsolvent company, and astutely laid down three keyprinciples:• disputes involving an insolvent company that ariseonly upon the onset of the insolvency regime, suchas disputes concerning transaction avoidance andwrongful trading, are non-arbitrable;• disputes involving an insolvent company that stem150

from its pre-insolvency rights and obligations arenon-arbitrable when the arbitration would affect thesubstantive rights of other creditors; and• disputes involving an insolvent company that stemfrom its pre-insolvency rights and obligations arearbitrable when the arbitration is only to resolveprior private inter se disputes between the companyand the other party.The court’s reasoning for the distinction is that acompany’s pre-insolvency management is unlikely tohave contemplated including avoidance claims withinthe scope of an arbitration agreement, since thecommencement of insolvency proceedings wouldresult in them being displaced by a liquidator orjudicial manager.Undue preference transactionsThe Court of Appeal provided some useful guidanceon avoiding undue preference transactions in the twincases of DBS Bank Ltd v Tam Chee Chong and another(judicial managers of Jurong Hi-Tech Industries Pte Ltd(under judicial management)) [2011] 4 SLR 948 andCoöperatieve Centrale Raiffeisen-Boerenleenbank BA(trading as Rabobank International, Singapore Branch) vJurong Technologies Industrial Corp Ltd (under judicialmanagement) [2011] 4 SLR 977.The Court of Appeal affirmed that the English testof what constitutes unfair preference as laid down inRe MC Bacon Ltd [1990] BCLC 324 is applicable inSingapore: whether the debtor, in doing the act, wasinfluenced by a subjective desire to prefer a specificcreditor over the general body of creditors. The Courtof Appeal summarised the applicable principles asfollows:• the test is not whether there is a dominant intentionto prefer, but whether the debtor’s decision wasinfluenced by a desire to prefer the creditor;• the court will look at the desire (a subjective stateof mind) of the debtor to determine whether it hadpositively wished to improve the creditor’s positionin the event of its own insolvent liquidation;• the requisite desire may be proved by directevidence or its existence may be inferred from theexisting circumstances of the case;• it is sufficient that the desire to prefer is one of thefactors which influenced the decision to enter intothe transaction; it need not be the sole or decisivefactor; and• a transaction which is actuated only by propercommercial considerations will not constitute avoidable preference. A genuine belief in theexistence of a proper commercial considerationmay be sufficient even if, objectively, such a beliefmight not be sustainable.The Court of Appeal further held that there is noneed for the debtor to have knowledge of theprospect of its insolvency before it can be said tohave given an unfair preference to a creditor, and thatthe relevant time to determine whether a debtor hadthe requisite desire to prefer is the time when thecreditor received the preference, and not when it waspromised the preference.Author:Sushil Nair, Co-Head, Corporate <strong>Restructuring</strong>Drew & Napier LLC10 Collyer Quay#10-01 Ocean Financial CentreSingapore 049315SingaporeTel: +65 6531 2411Fax: +65 6535 4864Email: sushil.nair@drewnapier.comWebsite: www.drewnapier.com151

Business recovery, restructuring and performanceimprovement in South Africaby Simon Venables and Stefan Smyth, PricewaterhouseCoopersBusiness recovery, restructuring and performance improvement have bothhad a higher profile in South Africa over the course of the last two to threeyears for a number of reasons ranging from the economic downturn toincreased competition from globalisation, the introduction of new legislation(Consumer Protection Act, Companies Act and Protection of PersonalInformation Act) and due to increased investment opportunities in SouthAfrica for new entrants wanting to use South Africa as a portal for access toAfrica as a key emerging market. Accordingly ‘stressed’ and ‘distressed’businesses have tended to be recovery focused whereas ‘healthy’ businesseshave sought out performance improvement to ensure they are able toenhance or preserve their competitive position and profitability.CEOs in South Africa are on the whole reporting confidence about theirrevenue growth opportunities but many attribute their readiness to takeadvantage of recovering markets as being due to being “better prepared todeal with an economy defined by volatility in global markets, weak demand indeveloped markets and uncertainty in emerging markets”. It is interesting tonote that the recession has done its fair share to develop leaner businesses aswell as having done damage to less ‘agile’ or ‘ fit’ companies. There alsocontinue to be a raft of issues that are somewhat unique to South Africa (intheir influence on commerce) that have and continue to be dominant issuesfor in all stages of the business cycle – such areas include skills shortageswhere this criticality in the eyes of our CEOs is at such a level that it is seenas one of the leading challenges for industry and government to resolve.Recovery versus improvementWhilst there are numerous labels and categorisationspossible, often there are two common ways to considerthe interaction between business recovery andperformance improvement – the first is to presume thata business in distress is rescued or recovered (by meansof a few ‘life saving’ interventions) and is then handedover for turnaround and performance improvement(rehabilitation) and then is nursed back to its growthtrajectory. The second is to assume that businessrecovery is only for sick businesses and performanceimprovement is only for healthy businesses. The paradoxis that both can be true or not and that in reality it isthe situation facing any given business that is unique andwhich will dictate the extent to which either or bothforms of interventions will assist or not.It is, however, true to say that in the context ofSouth Africa and the current economic climate locallythat the two have recently become more polarisedand often represent practices best designed for eithersick or healthy businesses. However, in order todiscuss both subjects effectively and efficiently in thisarticle we have found it more useful to discuss keyissues, methodologies and interventions that arecommon to both or exist in either specialism andmost importantly to report on how they are beingapplied in practice.The notion of ‘recovery’ is also a subjectiveassessment. Company boards and shareholders mayhave differing views on whether a closure or sale of anon-core/non-performing asset constitutes a recovery.The reality is that any intervention that allows acompany to survive and thrive in part by closing orselling other assets is a recovery nonetheless if theprospect of changing nothing would have resulted infailure of the whole enterprise.Update on restructuring inSouth AfricaThe South African restructuring market is quite similarto that in Western Europe and North America and inmany senses is becoming even more so with theintroduction in May 2011 of Chapter 6 BusinessRescue proceedings. This draws on internationalrestructuring legislation including UK Administrationand US Chapter 11 yet is more similar to CanadianCCAA or Australian rescue provisions given that it isneither of these is creditor nor debtor in possessionbased.In under a year in it has made significant inroads152

into challenging preconceptions that Chapter 6 wouldbe a pre-liquidation status that risked substantialabuse and misuse. This is broadly thanks to acombination of factors including the quality of earlyjudgments that are being passed down by the Courts,regulation and oversight by the newly formedCompanies and Intellectual Property Commission(CIPC) and the resolve of restructuring professionalsand organisations who have lobbied and joined forcesto ensure that the ‘bar is raised’ to a suitably highstandard.Most interestingly the largest themes and issues toarise so far have centred around the challenge ofraising Post Commencement Finance (“PCF”) andalso in determining valuations at various stages of theprocess (they range from fair and reasonable toestimations of liquidation value). PCF is challengingfirstly in that traditional levels of Bank securityrequirements in South Africa often leave little roomfor secured PCF without substantial negotiation whichoften slows the much needed injection of liquidityand also due to an absence of a secondary debtmarket which has yet to emerge to refinance ailingbusinesses during the rescue process. The latter is notexpected to be anything other than time drivenwhere the maturity of the market will absorb theopportunity to create higher levels of interest andreturns related to the risk of rescue capital. It mayhowever be hampered if the release of security heldby pre rescue funders and investors is not seen to behighly negotiable and common practice to berelinquished (in part). The subject of valuations is ahighly involved process and is complicated by beinglinked to voting rights within the rescue process. Theresult is that value can be highly contentious given itsability to determine “cram down provisions” and alsoproposed compromises of creditors’ claims.Whilst Chapter 6 has brought a formal and judicialapproach to recovery techniques under theprotection of a Court Moratorium against creditors’claims that never existed before, it does in manyinstances merely require the use of business recoverytechniques that have been used for many years ininformal and consensual restructuring and includeinter alia the following:1. Fundamental changes to strategy/turnaround plans.2. Non core asset disposal.3. Optimised exits/managed wind downs.4. Refinancing and recapitalisation.5. Cost reduction vs growth strategies.In the following sections we deal with each topicin a little more detail and explore how suchinterventions have evolved to assist in theturnaround, recovery and improvement inperformance of companies in South Africa.StrategyWith levels of competition such as they are, budgetdriven strategies will not be sufficient for the survivaland growth of a business. The environment in whichthe company trades comprises of its internal, externalpositioning plus the context in which it exists –effectively the DNA of this specific business in thecontext of its industry. Recovery situations demandthat strategy is reaffirmed or redefined, matching acompany's strengths to opportunities and addressingits weaknesses against the threats that it may face.As critical is the need to determine animplementation programme and a monitoring/trackingprocess to ensure that, on a milestone basis thattimely progress is achieved and lasting change iseffected across the organisation. From a South Africanperspective, particularly the changing legal landscape isa crucial consideration, given the recent promulgationof both a new Companies Act and a ConsumerProtection Act plus a Protection of PersonalInformation law – those adopting a strategic andproactive approach will not only thrive but will beable to increase business value exponentially versusthose still in ‘wait and see’ mode. Given also labourlaw, government imperatives on job creation andacute skills shortages, those with a strategic visionregarding labour in the context of their industry willbe able to drive their own destiny versus competitorswho will be passengers in a changing South Africanlabour landscape.Asset disposalAs markets and businesses evolve, many shareholdersand boards find that adjustments need to be made tothe footprint of the organisation. Often this caninvolve selling all or part of a business that no longerperforms to its potential or no longer fits the strategicvision (including revised vision as above). Suchdisposals are commonplace, and a sign of strongmanagement and active ownership.Non-core assets develop in many contexts and arecommon in many organisations and can consist ofnon-performing loan portfolios, branch networks, orentire subsidiaries of financial institutions or real estateportfolios in corporate groups, or parts ofconglomerate businesses that have evolved over timeand now need to be rationalised and reconsidered.There are a number of potential pitfalls andtypically independent reviews can assist in determiningwhat is core and what should be sold. This aidscompanies and their shareholders to challenge theirbusiness plans and generate focus. Having determinedwhat should be changed, time and energy has to beapplied to planning the separation even before anydisposal action is contemplated. For corporates, this153

can involve a range of HR, legal and other workstream procedures to clean up and segregate the goforwardoperations from those which need to berationalised or sold. Proper planning and executioncan make a vast difference between just shedding thenon core asset and realising a successful carve out andrealisation of the company and/or shareholdersfinancial, operational and strategic objectives. Disposingor shutting down non-core elements involvesvaluation, market sounding and positioning, as well asseeking out interested parties for whom the assetsoffer value.Optimised sale or wind downIn some instances the ability to carve out or disposeof the asset in its current guise is not an option orpresents an unacceptable discount over its potentialfuture value. Invariably in such circumstances anassessment of the options will assist in informing themost effective solution. If a straight forward disposaldoes not yield positive returns or results in a limitedor no market then options such as an optimised saleor wind down can be evaluated.Optimised sales relate to situations where a partialturnaround or improvement can be effected in theasset or company and based on cost benefit analysisyields better returns. In such instances commonbusiness recovery techniques such as forecast reviewswith sensitivity analyses will allow a buyer to see thepotential for the business to recover and be viable inthe long term. Examples of this are mining assets in‘care and maintenance’ where the general view of theasset is that it is potentially tainted as not viable –investing in a partial turnaround may allow the mineto come out of care and maintenance and achieve arun rate of performance that may persuade buyersthat management or mining practices were the causeof financial distress and the ensuing care andmaintenance rather than issues around the lack ofaccessible mining reserves, life of mine or marginalityof returns.From a South African context the junior miningsector can often fall foul over lack of scale or sufficientskills or capital to attain the true viability that themining asset and reserves are really capable of bysignificantly altering and improving businessperformance. Analytics and determination of keycauses (rather than symptoms) of distress will assist inthe evaluation of the necessary interventions to effectin order to change the proposition of the distressedasset to a viable investment opportunity.Fixing the capital structureThe objective of any financial restructuring is to effectsubstantial and lasting change in a company’s financialstructure, or ownership or control designed toincrease the value of the firm. Situations includestress-induced financial restructuring, recapitalisations,debt-equity swaps and post commencement finance.Such matters require the redesign of debt, equity andmezzanine instruments in order to resolve particularproblems that cannot be solved by conventionalmethods.Causes are wide and varied ranging fromunsustainable debt levels incurred in leveragedbuyouts through to loss of headroom andconventional debt service capacity due to suppressedlevels of trading. Again South Africa has some uniqueattributes in this regard particularly in the arena ofBlack Economic Empowerment (“BEE”). The Broad-Based Black Economic Empowerment Act of 2003defines "black people" as a generic term that includes"Africans, Coloureds and Indians". According to theAct, "broad-based black economic empowerment" –with an emphasis on "broad-based" – refers to theeconomic empowerment of all black people includingwomen, workers, youth, people with disabilities andpeople living in rural areas. The socioeconomicstrategies envisaged include increasing blackownership and management of businesses, facilitatingcommunity and worker ownership of “enterprises andproductive assets”, skills development, issues aroundequal representation in the workplace, preferentialprocurement, and investment in businesses that areowned by black people. In many historic transactionsthe buy-in of a BEE partner was often vendorfinanced and was potentially excessively reliant onstrong cash flows for dividends. Where such cashflows have failed to materialise the result is deals caneither be unwound or refinanced.Working capital can be a silent killer in times ofrecession but is often neglected for a variety ofreasons. Firstly, the level of analysis, time and skillrequired to completely understand the intricacies ofall aspects of the working capital cycle can often belacking within the company despite a detailed workingunderstanding of the matter and secondly bankingfacilities designed to alleviate working capital peakpressures such as debtors finance (or factoring) canalso make it exceptionally difficult in a liveenvironment with fluctuating trading to isolate thetrue working capital requirement let alone determinethe cause of pressure which can range fromworsening debtors collections and defaults, liquidationof inventory to generate cash through to ‘rolling’ ofcreditors. Cash and liquidity can be unlocked throughworking capital optimisation programmes whichextend from negotiation of customer terms throughto supplier procurement strategies. Often companieswho have survived the worst of a downturn, fail to154

www.pwc.co.za/dealsAdvisingyou inchangingtimesAlmost a year into the era of the new Companies Act for South African businesses, theearly signs are that the challenges are every bit as complicated as were envisioned.Changes to Solvency & Liquidity tests, the introduction of new Business Rescueproceedings (Chapter 6) and altered provisions for Fundamental Transactions meansthat more than ever, the need for independent specialist advice from experiencedprofessionals currently practicing in these areas is critical.As one of the largest integrated Deal and <strong>Restructuring</strong> advisers on the continent,receiving several Deal Makers awards this year including M&A Accountants (DealValue) 2nd and Corporate Finance Sponsors (Transaction Value) 2nd and havingbeen the restructuring adviser on the largest successful Chapter 6 Business Rescuematter to date, we are ideally placed to assist.Contact our experts for further advice:Simon VenablesDirector+27 (11) 797 5660simon.venables@za.pwc.comStefan SmythAssociate Director+27 (11) 797 4184stefan.smyth@za.pwc.com

ecover even with potential excess demand for theirservices and products due to an inability to raise therequired investment in working capital to harness theopportunity and suffer ongoing losses from undertrading against often rigid, fixed cost bases.Shrink to growCompared to other interventions this can be thehardest to evaluate the likely outcome of. The battlebeing that there are a myriad of moving parts attachedto such strategies. Whilst shedding low profit contractsseems advantageous for gross profit one has to beclinical in determining whether variable costs are trulyvariable on an account by account basis and as towhether fixed costs might lose a valuable contributionby low margin accounts and economies of scale can belost. That said it is also painfully true that by expandinga bad (low-return) business means just having more ofa problem, and a measured step backward is often thebest way forward. Invariably in order to make suchdecisions a great deal of analysis is required –companies that undertake such reviews on a seriousand professional level will often reap a return on thisinvestment and undergo a (re)discovery of theirbusiness, its true drivers of success, identify their worstvulnerabilities and will equip themselves with a realtime modelling process that informs decision making atthe highest level. Whilst not for the faint hearted,properly planned and executed recovery strategieshave a range of highly successful public available tothem to show what the prize can be.Authors:Simon Venables, DirectorSouthern African Deals LeaderStefan Smyth, Associate DirectorNational Leader Business Recovery ServicesPricewaterhouseCoopers2 Eglin RoadSunninghillJohannesburg 2157South AfricaTel: +27 11 797 4000Fax: +27 11 797 5800Email: simon.venables@za.pwc.comstefan.smyth@za.pwc.comWebsite: www.pwc.co.za/en/deals/index.jhtml156

Business rescue inSouth Africaby James McKinnell and Claire van Zuylen, Bowman GilfillanAfrica, and in particular South Africa, has been relatively sheltered from theeffects of the global economic crisis. While not unscathed, the type ofeconomic meltdowns that we are seeing in the Eurozone economies are notyet threatening South Africa. Certainly, South African banks are generallyquite tightly regulated and more conservatively capitalised than banks inother jurisdictions. Moreover, local exchange control restrictions, introducedin the Apartheid era and designed to prevent the flight of capital out of theRepublic of South Africa, prevented the South African investment marketfrom material exposure to many of the toxic asset based securities thatbrought American and English banks to their knees.Nonetheless, the exposure of South Africa’s relatively‘open’ economy to the global economy has affectedSouth African companies and investments. In turn, thishas affected creditors, including a number of foreigncreditors who invested in or lent to South Africancompanies at a time when South Africa offered moregrowth and return than some of the more traditionalfirst world economies.For many years, South Africa has been classed asa ‘creditor friendly’ insolvency and bankruptcyjurisdiction, certainly for secured creditors. While theprocesses are rightly criticised for being slow by, forexample, American standards, the system gives apredictable result for secured creditors and issupported by an independent judiciary. South Africadid not have a ‘business rescue’ culture similar to someother jurisdictions and until recently the only form ofbusiness rescue was judicial management, which isgenerally regarded as ineffective in practice and wastherefore not widely utilised. <strong>Restructuring</strong>s took placeeither by means of a scheme of arrangement (similarto the English scheme of arrangement), or by way ofinformal out-of-court restructurings which requiredthe support of all the creditors.This changed when the 1973 South AfricanCompanies Act was completely overhauled andreplaced by the new Companies Act of 2008 (‘theCompanies Act’), which came into effect on May 1,2011. The Companies Act was introduced tomodernise South African company law and bring it inline with best practice internationally, especially inrelation to public companies. The Companies Act alsosought to simplify administrative red tape and otherprocedures. One of the more revolutionary changesIn the Companies Act, was the replacement of JudicialManagement by a new regime of ‘business rescue’, inline with international trends, and in line with themechanisms contained in Chapter 11 of the UnitedStates Bankruptcy Code, and on the administrationprocess in English law.Overview of business rescueBusiness rescue is intended to be a quick, cost effectiveand substantially commercial mechanism that is largelyextra-judicial, so as to limit disruptions to the company’sbusiness and reputation. The procedure is intended tolast three months from commencement to thesubstantial implementation of the business rescue planapproved of by the creditors.Business rescue can be commenced by an ordinarydirectors’ resolution and statement which confirmsthat the company is ‘financially distressed’ and can berescued. The definition of ‘financial distress’ is wide andencompasses not only an inability to pay debts whendue (cashflow insolvency), but also balance sheetinsolvency. The resolution is registered at theCompanies Commission, at which point the businessrescue commences. There is no prior external scrutinyby a court to establish if the company is indeed‘financially distressed’ or if it is a candidate for rescue.The board can pass the resolution with no notice toshareholders, creditors, financiers or employees untilafter the business rescue is in effect. While this makesthe system cheap and accessible to strugglingcompanies, there is potential for abuse.Business rescue (or ‘Rescue’) can also be initiatedby ‘interested parties’ (shareholders, creditors,employees and recognised trade unions) by means ofan application to court, which can also make an orderfor business rescue while hearing another applicationagainst the company, such as a liquidation applicationor an application to perfect security.A moratorium on all claims ensues immediately asa resolution for business rescue is filed or when a157

court application by an interested party is issued, orwhen the court makes an order during otherproceedings.An interesting provision under the new Rescuechapter is that if the board has “reasonable grounds tobelieve” that the company is ‘financially distressed’ butdecides not to adopt a resolution for Business Rescue,it must deliver a written notice to all affected persons(creditors, financiers, unions, employees) setting outthe reasons why the company is ‘financially distressed’and why the board did not pass such a resolution.This is a naive provision, as such a notice will surely bean event of default under the company’s financingarrangements, triggering a tightening of creditors’ andsuppliers’ terms or even foreclosure. However, a failureto send the notice puts directors in the firing line ofpotential personal liability and criminal sanction.Lenders or investors with board representation shouldnote this section.The board stays in office during business rescue. Ifthe board initiated the rescue via resolution then itappoints a business rescue practitioner (BRP) who isrequired to be ‘independent’. The BRP is an officer ofthe court and owes fiduciary duties to the company –not to creditors as is the case with liquidators andjudicial managers. If the Rescue is initiated by a courtorder, a meeting of creditors is held to appoint theBRP. Importantly, the appointment and work of theBRP is not overseen by the Master of the High Court.The BRP also does not have to put up a bond ofsecurity for the value of the company’s assets unlessordered to by a court – despite having managerialcontrol over the company. A creditor can apply tocourt to either set aside the Rescue, or to remove theBRP, or to order him/her to put up a bond of security.Although most of the intended Rescue process issusceptible to judicial oversight, the delays in mattersbeing heard (generally several months) is impeding theefficient progress of many Rescues in practice. Thisdelay is also being used by parties who are opposedto the Rescue who (cynically) bring court applicationsto frustrate the process. The Companies Act doesempower Judges President to appoint specific judges(similar to insolvency divisions in other jurisdictions) tospecialise in and expedite business rescue matters.However none have yet been appointed and thiswould be a most welcome development.The BRP consults with all ‘interested parties’ andthen prepares a business rescue plan (the ‘Plan’). ThePlan must follow a broad set of guidelines in that itmust show the company’s current financial position,the proposed Plan, and then the assumptions andguidelines on which it is based. Practitioners are givena great deal of leeway as to how the Plan is structuredso as to re-organise the debts of companies as well aseven to suspend or release the company from itsliabilities. The Plan may contain a term-out of debts ora ‘haircut’ of some of the capital claims. The Plan mayalso provide for changes to the company’s equity, forexample a new issue of shares (as part of a debt –equity swap in order to reduce liability in thecompany). The Plan must emphasise the benefits likelyto accrue to creditors should the Plan be adopted,versus the dividends that creditors are likely toreceive if the company were to be liquidated.Once the Plan is approved by the requisitemajority of parties (see below), the BRP thenimplements the Plan. Once the Plan is ‘substantiallyimplemented’ (which is determined by the BRP), thebusiness rescue is discharged.If the Plan is not approved, then the businessrescue is either discharged or the company put intoliquidation.VotingThe Rescue chapter draws a distinction betweenordinary creditors, and ‘independent creditors’.‘Independent creditors’ are those who are not relatedto the company, a director or the BRP. Employees areclassed as ‘independent creditors’. Creditors who arenot independent would be for example, shareholdersof the company voting a shareholder loan claim. Thepurpose behind the distinction is to avoid votes beingunduly influenced by ‘insiders’ to the company whoseinterests are not necessarily aligned with those ofcreditors.Most local and foreign creditors are familiar withschemes of arrangement where each class of creditor(preferent, secured and concurrent) votes separatelyand approvals must be obtained at each meeting. Bycontrast, the meeting to approve the plan in businessrescue is a single meeting attended by all three classesof creditors – so a single creditor with an unsecuredclaim of say R10m has the same voting power as asecured creditor with a secured claim of R10m.Secured creditors are used to having separatemeetings in terms of which a proposal cannot flyunless the class of secured creditors agree. Here, alarge number of unsecured creditors couldtheoretically outvote secured creditors.A creditor’s voting interest is calculated based onthe face value of its claim – regardless of whether theclaim is secured or unsecured. Thus even if aconcurrent claim would not give rise to a dividend inliquidation, the voting power of the creditor is basedon the face value of the claim. Claims that arecontractually subordinated vote at ‘liquidation value’which in most cases, will be close to zero.In the ordinary course of Rescue proceedings“a decision supported by the holders of a simple158

majority of the independent creditors voting interestsvoted on a matter, is the decision of the meeting onthat matter”. When a Plan is voted on, the Plan mustbe approved of by creditors as follows: 75% ofcreditors’ voting interests, and 50% of independentcreditors’ voting interests. If rights of holders ofsecurities are affected by the Plan, a separate meetingof shareholders must be convened, and 75% of theshareholders attending must approve the Plan. Thus noPlan can be approved involving variations to sharerights without shareholder consent.Deadlock on Plan – ‘buy out’ rightThe Rescue chapter contains a significant deadlockbreaking mechanism: if a Plan is voted down, adissenting creditor can be bought out by an affectedparty (i.e. another creditor or a shareholder or anemployee) at ‘liquidation value’, which in a regulatedindustry could be significantly less than the market valueof the claim. Thus creditors have an incentive to vote infavour of a plan that proposes to give them less thanwhat they feel they are entitled to, against the threatthat if they vote against the Plan, they risk their claimbeing bought out at its liquidation value.What is a creditor – bond issuesThe word ‘creditor’ is not defined in the business rescuechapter, or in the Companies Act or <strong>Insolvency</strong> Act. Atcommon law however, a creditor is accepted to be anyperson who has a right to sue in his own name for asum of money or goods. This gives rise to an issue ofinterest in the context of bond issues. Depending onthe drafting of the indenture, the claims of thenoteholders may be held by the <strong>Global</strong> Depository,who holds the same as principal against the issuercompany and not as agent or trustee of thenoteholders. Thus noteholders who attempt to proveclaims in the business rescue may find their claims arerejected. There is a fairly simple solution to this – mostindentures provide a mechanism for the ‘definitisation’of the notes, which gives the noteholders a direct claimagainst the issuer company, and reducing the claim ofthe <strong>Global</strong> Depository proportionately. This point hasnot yet been tested in a South African court.Group companiesIt is important to note that the Rescue chapter doesnot take into account the financial reality of a group ofcompanies becoming ‘financially distressed’ and there isno mechanism for a ‘group’ business rescue. Theimplication is that each constituent entity in a group hasto be placed into business rescue on its own merits(this is not difficult in most cases as the groupcompanies cross-guarantee each other) and each entityhas to appoint a BRP. Where there are group loansinvolved, and the potential for a conflict of interestbetween the companies, different BRPs must beappointed for each. Separate Plans for each companymust also be prepared. This can substantially increasethe cost and complexity in the Rescue of a group.Cherry pickingOne of the more important aspects of the Rescueregime is the so-called ‘cherry-picking’ provisions, whichmay prove controversial in practice. These permit theBRP to:• “entirely, partially or conditionally suspend, for theduration of the business rescue proceedings, anyobligation of the company” that arose under anagreement which the company is a party to andwhich would have fallen due during the rescue.The BRP may exercise this power without the needto seek court or creditor approval; or• “entirely, partially or conditionally cancel” anyobligation of the company that arose beforeBusiness Rescue. However, this requires courtauthorisation. There is little guidance as to whatconsiderations a court must take into accountwhen weighing up the rights of the counterpartyand the needs of the company, save that theobligation must be cancelled on terms that are‘just and reasonable’. For example, if a company islocked into a lease with high escalations incomparison to market rentals, and such rentals arepreventing the company from trading profitably, acourt may well order that the lease be cancelled.This affects the privity of contract as contractscould be cancelled for the reason that they arecommercially onerous in practice, not that they areimpeachable under <strong>Insolvency</strong> law (for example, asale at no value or a voidable preference).If a contract has been suspended or cancelled, theother party is limited only to a claim for damages. Thismay well be a hollow solution – the damages claim ofsuch party is unsecured and will also be subject to themoratorium on creditors’ claims.The ‘cherry-picking’ clause does not apply toemployment contracts or to ISDA master contractsor exchange contracts to the extent that they alreadyenjoy protection under SA <strong>Insolvency</strong> law.Assets subject to security cannot be sold by thepractitioner without the secured creditor’s consent.Post business rescue lendingOne of the chief reasons that Chapter 11 bankruptcyhas shown the measure of success that it has in the USis the availability of post-bankruptcy commencementfinancing – the so-called DIP financing. Mostrestructurings are doomed to failure without someform of post Rescue funding. A failure of judicial160

management, the predecessor of business rescue, wasthe reluctance of South African courts to advancefunding or overdraft facilities to a company in judicialmanagement. Many of the assets of a company indistress are often financed – and if there were equity inthose assets, the company would have utilised this toavoid financial difficulty. In an attempt to encouragepost-commencement lending, the Rescue chapterpermits a post-commencement financier to takesecurity over unsecured assets or over already securedassets if there is equity. the provisions provide that theamounts owing to a post-commencement financier are,if the business rescue fails and the company goes intoliquidation, preferent to the unsecured claims ofcreditors. However, financiers, looking to exploit a newmarket, should be mindful that any postcommencement unpaid salaries owed to employees areclaims that are preferent to post commencementfinancing – even if the post commencement financierhas taken post commencement security.ConclusionAlthough the Business Rescue regime provides aneeded and long awaited mechanism for the rescue ofcompanies in South Africa, it is largely proving to beeffective in situations where there is a high level ofco-operation between key stakeholders. Hopefullyresolve on the part of courts in interpreting the newprovisions and making key decisions swiftly, andcreditors and particularly banks in supporting theprocess will result in successful Rescues and thedevelopment of a welcome alternative to the failureand liquidation of companies.Authors:James McKinnell, Partner<strong>Insolvency</strong>, Bankruptcy and <strong>Restructuring</strong>Bowman GilfillanSA Reserve Bank Building60 St George’s Mall, Cape TownPO Box 248, Cape Town, 8000South AfricaTel: +27 (21) 480 7800Fax: +27 (21) 480 3269Email: j.mckinnell@bowman.co.zaClaire van Zuylen, PartnerBowman Gilfillan165 West Street, Sandton, JohannesburgPO Box 785812, Sandton, 2146South AfricaTel: +27 (11) 669 9000Fax: +27 (11) 669 9001Email: c.vanzuylen@bowman.co.zaWebsite: www.bowman.co.za161

Spain: Key new legislation introduced bythe <strong>Insolvency</strong> Reform Lawby Antonio Fernández, Borja García-Alaman, Adrian Thery and Juan Verdugo, GarriguesDistressed companies in Spain have tended to shy away from formalinsolvency mechanisms, leaving them to the very last minute, when it wasalready too late. This was very clearly the case when the nineteenth centurybankruptcy law and the “suspension of payments” law providing standstillprotection from the 1920s, were in force. The introduction of more stringentprovisions on directors’ liability towards the end of the 20th century didnothing to reverse this inaction.Then, in 2004, the new Spanish <strong>Insolvency</strong> Law came into force, the fruit ofhard grafting in parliament. Aware of the importance of their task, groups ofall political persuasions created a new insolvency framework from scratch,aimed squarely at modernising the treatment of insolvency in Spain. Sointent were the lawmakers on giving insolvency proceedings the importancethey deserve that they decided to create a new type of court – theCommercial Courts – tasked first and foremost with conducting insolvencyproceedings (which, therefore, remained predominantly judicial in nature).Introduction to the 2011 reform ofthe Spanish insolvency lawThe <strong>Insolvency</strong> Law involved a significant change inmindset towards insolvency, as it was no longer definedas an equity imbalance and came to be seen as theinability to meet payments from a financial or cash flowstandpoint (liquidity test). The new legislation alsoushered in a varied range of effective restructuringmeasures to induce distressed businesses to petition forinsolvency or “concurso de acreedores” (the Spanishname for the court proceeding opened by a judgeonce it has been established that the company inquestion is technically insolvent), and even allowedbusinesses to take advantage of the protection offeredby this mechanism in cases of “imminent insolvency”,that is, where technical insolvency does not yet existbut is likely to arise imminently, which enablescompanies to anticipate the problems ahead therebymaking it easier for them to find a solution.The chief restructuring measures that the<strong>Insolvency</strong> Law introduced in the Spanish legal systemwere: allowing the judge in the insolvency proceeding(rather than an administrative authority with politicalbias) to decide on the collective employmentmeasures that the company may need to carry out;allowing the judge in the insolvency proceeding toorder the termination or maintenance of specificcontracts to which the company is a party, purely onthe basis of the “interests of the insolvencyproceeding”, in other words, regardless of theexistence or otherwise of material contractualbreaches; allowing creditors arrangements to beproposed containing an array of measures torestructure the debtor’s liabilities; and, allowing a stayon the foreclosure of security interest to try andpreserve the business until a solution has beenachieved in the insolvency proceeding.Despite the enticing protection offered tobusinesses by the <strong>Insolvency</strong> Law, between 2004 and2007 the number of insolvency proceedings stayed ata moderate level (around 1,000 proceedings peryear), on a par with the former bankruptcy andsuspension of payments proceedings. There was ayawning gap between the number of insolvencyproceedings in Spain and similar proceedings in otherEU countries (Spanish ratio of insolvency per 10,000companies: 3/10,000; European average: 67/10,000). Itwas not that insolvency did not arise for companies inSpain, but rather that these companies were not usingthe formal mechanisms to the same extent as in othercountries, probably prompted by a combination oftwo factors: the average size of companies in Spainbeing smaller and the stigma traditionally attached toformal insolvency mechanisms.Since the start of the downturn in 2007, however,the number of insolvency proceedings has rocketedfrom 1,147 in 2007 to 6,755 in 2011, a six-foldincrease in four years.Due to the gravity of the downturn, in March2009, just five years after the <strong>Insolvency</strong> Law cameinto force, the lawmakers introduced a series oftechnical improvements aimed mainly at encouragingrefinancing arrangements, which were being used on awidespread basis.162

Figure 1: Evolution of the concurso proceedings8000700060006,1975,9626,7555000400030003,3982000100001,1472007 2008 2009 2010 2011On the back of the first reform in 2009, however, italso became clear that the intensity and characteristicsof the downturn made it necessary to carry out amuch deeper reform of the <strong>Insolvency</strong> Law to adjustto the new playing field.A Committee of Experts was then set up withmembers drawn from all the circles involved. Theoutcome of their work, once it had been siftedthrough the trommel of both Houses of the SpanishParliament, was the <strong>Insolvency</strong> Law reform enshrinedin Law 38/2011, of October 10, 2011, which cameinto force on January 1, <strong>2012</strong>.The 2011 <strong>Insolvency</strong> Law reform is a very farreachingand ambitious amendment, and has madechanges to almost half of the original Law’s articles,which illustrates how comprehensive it is.We are not going to embark here and now on adetailed examination of all of the issues dealt with inthe reform. What we would like to do is describe thenew legislation introduced by the 2011 reform aroundtwo main trends that we think the lawmakers havetried to address: a clear move towards preinsolvencymechanisms and preservation of the business. This willgive the reader an idea of the future direction ofrestructuring and insolvency in Spain and the newtools that will be available.Measures to preserve the businessBefore the 2007 downturn, when most of thecompanies petitioning for insolvency were alreadyterminal and breathing their last, the majority ended upin liquidation (90%), whereas only a small numbermanaged to turn themselves around and restructureusing an arrangement with creditors (10%).Generally speaking, liquidation led to thedisappearance of the business which meant thatcompanies only had two options: continue in businessby means of an arrangement or be liquidated and saygoodbye to the business.In the financial downturn, the number ofcompanies petitioning for insolvency has shot up andmany of these companies never reach the terminalstage. This is an improvement on the two-optionsystem hitherto in existence and has opened up athird option not used very often before: even thoughthe company may be liquidated, its business does notdisappear with it and survives by being transferred toa third party (along the same lines as les plans decession ou reprise in France).At present, the Commercial Courts in Spain aregoing to such great lengths to protect the survival ofthe debtor’s business where the debtor is to beliquidated that you could be forgiven for wonderingwhether the fundamental aim of insolvencyproceedings (to pay creditors, according to thePreamble to the <strong>Insolvency</strong> Law) has been overtakenby the aim of preserving the business. Whether this istrue or not, both goals can usually coexist sincepreserving the business means maximising its valueand minimising its employee liabilities, which thereforealso improves the creditors’ chances of recovery oftheir claims.Figure 2: Solutions reached in insolvency proceedings10%LiquidationArrangement90%163

That said, the most innovative steps in the reformto encourage continuity of the business are:(i) Measures to expedite proceedings and shorten thetime limits for achieving a solution in the insolvencyproceeding, either by securing advance approval ofan arrangement with creditors or bringing forwardthe opening of the liquidation phase, which speedsup the transfer of the business to a third party. If, ineither case, the company includes a proposal for anarrangement or a liquidation plan in its petition forinsolvency (which will allow the proceeding to beconducted as an “abridged” proceeding, resulting inshorter time limits), a solution may be achieved inthe insolvency proceeding between two and threemonths rather than taking at least six months ashappened before the reform.(ii) A new measure allows companies to include in theirpetition for insolvency a proposal for the transfer ofthe business to a third party, which straddles thedefinitions of ordinary liquidations in Spain andsection 363 USC sales in the US.Besides allowing all or part of the company orits production units to be sold in a shortertimeframe, its principal advantage lies in the factthat the purchaser has a court ruling that clearsthe assets and determines that the buyer will notacquire any of the seller’s debts.And the <strong>Insolvency</strong> Law reform does not stopthere; where the petition for insolvency includes aninitial liquidation plan, it also allows the court toorder the termination of specific contracts whenthe company is transferred to a buyer and, moreinterestingly, the possible maintenance of theremaining contracts.The insolvent company can therefore transferassets to the buyer and maintain specific contractswhich are in the interests of the transferredbusiness.Not only does this mean that the buyer canplace the other parties to the seller’s agreementsunder obligation to continue performing theagreements in force on the transfer date, it alsomakes it possible for the claims held by the partiesto those agreements, insofar as they are in force, tobe paid in full as post-petition claims, whichencourages these parties to support thetransaction and paves the way for survival of thebusiness. Any pre-petition claims not associatedwith agreements entered into by the buyer ranklower and are subject to the rules of the insolvencyproceeding.In short, as a result of the reform, restructuringscan now focus on the business, rather than thecompany, which makes it easier for the businessnot to disappear and to be transferred to a thirdparty. The ranking of creditors no longer dependsonly on their characteristics before the insolvencyorder, as was previously the case and now theirfuture strategic interest also plays a part. By addingthese measures, the Spanish <strong>Insolvency</strong> Law hasfostered the US concepts of critical vendor andsection 363 sales, referred to above.(iii)Another way to help the business survive is tomake it easier to obtain financing, either before theinsolvency proceeding (50% of the new preinsolvencyfinancing will be classified as a postpetitionclaim in the event of an insolvencyproceeding and the remaining 50% will have generalpreferred status) or after the insolvency order(financing provided by, or after, an arrangement withcreditors will be classified as a post-petition claim ifthe arrangement is not fulfilled and the company issubsequently liquidated).Similarly, although not a conventional financingmethod, the <strong>Insolvency</strong> Law paves the way forbuying and selling prepetition claims (and,therefore, for professional trading in liabilities andfor the associated loan to own strategies) byremoving the voting ban that these sales previouslyentailed, provided that the buyer is an “entitysubject to financial supervision” or, in other words,is not suspected of being a fiduciary of the debtor.(iv)With the same goal to secure the survival of thebusiness, the reform gives very important newpowers to the receiver, including to petition forliquidation if the debtor’s business stops operating,to take control of the voting rights of the debtor’ssubsidiaries and to dispose of or encumber thedebtor’s assets without court authorisation in theevent of urgency and necessity. Indeed, thecommitment to the principle of preserving thebusiness combined with the insolvency manager’senhanced powers is already resulting, in practice, inthe appearance and authorisation of real debtor inpossession (DIP) financing in Spain, with thetraditional US roll-ups in favour of financing banks.As a counterweight to the increased powers,additions have been made to the provisions oninsolvency managers’ liability – membership ofprofessional associations is of paramountimportance for individuals, and managers arerequired to have civil liability insurance to coverany damages arising from their decisions.The lawmakers’ aim with all of the above is toexpedite decision-making for important but notessential decisions, by taking them away from thecourts, which are no longer necessarily regarded asdecision makers on all matters. Furthermore, thelawmakers no longer require the courts tooversee all agreement processes in full, which it a164

clear move towards taking insolvency proceedingsout of the judicial sphere and towards encouragingthe preinsolvency mechanisms, discussed below.Taking insolvency proceedings out ofthe judicial sphere and decisivemove towards pre-insolvencymechanisms<strong>Insolvency</strong> proceedings in Spain have traditionally beenregarded with a lack of trust in private solutions: theseriousness of the situation was associated with anoverriding need for court mediation between theaffected parties, who were seen therefore as unable toresolve the situation (or were presumed likely to laydown the law in favour of their own interests). It ispossible that the lawmakers’ own perception ofinsolvency was at the root of the stigma attached to itamong the Spanish business community.In the 2011 reform, true pre-insolvencymechanisms made their first appearance in Spain: inwhat are known as Acuerdos de Refinanciación orRefinancing Agreements.The reason why the lawmakers stopped blindlyrelying on entirely judicial proceedings to remedyinsolvencies from start to finish seems to be arealisation that the involvement of the courts is, bydefinition, not a particularly efficient way of resolvingsituations which simply require a RefinancingArrangement. Indeed, the introduction of RefinancingAgreements in the reform bill was a result of the publicdiscussions which arose from the case of La Seda deBarcelona, in which a Spanish company, due to the lackof pre-insolvency mechanisms in Spain, had to apply tothe English courts for a scheme of arrangement (relyingon the fact that it had submitted to the law and courtsof England in its syndicated financing agreement), thanksto which it was successfully able to cram down andrestructure its banking liabilities.Differences aside, the Refinancing Agreementsintroduced by the reform are a kind of Spanish takeon schemes of arrangement in the UK and otherEnglish speaking countries.The terms of Refinancing Agreements can beimposed on dissenting financial creditors (and only onfinancial creditors) provided that the followingconditions are fulfilled: (i) it must be supported by60% of the total liabilities; (ii) it must also besupported by 75% of the financial liabilities; (iii) anindependent expert appointed by the CommercialRegistry must have prepared a report on its viability;and (iv) it must be recorded in a public deed.If the above requirements are met, the RefinancingAgreement must be approved by the CommercialCourt in a fast-track procedure, that is, within aroundone or two months and there is no possibility ofappeal. The dissenting creditors can only contest thecourt’s approval of the Refinancing Agreement on theground that the 75% majority has not been reachedand/or that the terms and conditions of theagreement entail a “disproportionate sacrifice” (whichwould be a kind of equivalent to the concept of unfairprejudice, on the basis of which it is also possible tocontest schemes of arrangement in the UK).There are basically two limitations on RefinancingAgreements: firstly, they cannot, in principle, imposeconditions over and above deferral for three years(i.e. they cannot impose release conditions or theconversion claims into equity); secondly, they cannotbe imposed on secured creditors or, in the jargon,secured creditors cannot be crammed down. Theselimitations are in turn subject to two importantclarifications: the Commercial Court with jurisdictionto approve the Refinancing Agreement may, in veryexceptional circumstances, stay enforcement of thecollateral of dissenting financial creditors for up tothree years, and even if these creditors foreclose theircollateral within the term of the RefinancingAgreement, any part of their claim over and abovethe value of the foreclosed collateral would be subjectto the Refinancing Agreement concerned (as it wouldbe an unsecured claim).Despite their limitations, Refinancing Agreementswill undoubtedly encourage refinancing even if only bydissuading creditors from dissenting. Furthermore, theymark a commendable step forward by lawmakers,both unprecedented and significant, towards securingprivate solutions to insolvencies in Spain.We hope that the above has helped providereaders with an overview of the trends and latestnew legislation on restructuring and insolvency inSpain. The reformed <strong>Insolvency</strong> Law works like aconstitution by laying down a series of almostuniversal principles in the area of insolvency, but manyissues have neither been regulated nor ruled on bythe courts, leaving them open to the defying challengeof being explored.Authors:Antonio FernándezHead of the <strong>Restructuring</strong> & <strong>Insolvency</strong>DepartmentBorja García-Alaman, PartnerAdrian Thery, PartnerJuan Verdugo, Senior Associate, GarriguesHermosilla, 328001 Madrid, SpainTel: +34 91 514 52 00Fax: +34 91 399 24 08Email: antonio.fernandez.rodriguez@garrigues.comWebsite: www.garrigues.com166

Share pledges and enforcement in Sweden: The battlebetween the pledgor and the pledgeeby Odd Swarting and Ellinor Rettig, SetterwallsFor a number of reasons share pledges have become ever more popular andrequired by lenders in international and domestic lending. The share pledgeallows the pledgee a better position of control and very often an easier wayto enforce a security than, for example, a business mortgage.In the wake of the financial defaults following thefinancial crises in Europe, and the often ratheraggressive enforcement by creditors of share pledges,several questions have been raised around howpledgors’ and other creditors’ interests are protected bycompulsory law in the sale process and whendetermining the value of the shares through valuation.The Swedish law on enforcement of pledges overmoveable property, such as shares, is to some extentvague in this respect and lacks guiding case law, whichoften leads to problems of interpretation anddisagreements between parties.In light of the above, and a recent Swedish case(the ‘Carnegie case’) involving the valuation ofredeemed shares in a financial institution, we willpresent our view on the Swedish law on sharepledges and enforcement as we see it.Share pledge under Swedish lawA share pledge is created through a pledge agreementbetween the pledgor (the debtor) and the pledgee(the creditor). A key issue in Sweden is the perfectionof such a pledge. A share pledge may be noted in theshare register of the pledgor. However, in order toperfect the pledge, the physical share certificate also hasto be handed over to, and be in the possession of thepledgee. Under Swedish law, the passing of physicalpossession is the general rule for the perfection ofpledges of moveable property. If the collateral is in thepossession of a third party, the pledge will be perfectedby notifying such third party. The principal test for theperfection of a security interest is the debtor’srelinquishing of control over the pledged property.Enforcement of share pledgesSwedish law is to some extent vague with regard toenforcement of pledges over moveable property. Thereis limited direct case law guidance on how to establish aproper enforcement process, and this area of law hasbeen a subject of debate in doctrine, particularly inrecent years.It is normally agreed in the pledge agreement thatthe pledgee may enforce the pledge in the manner heor she finds appropriate or that the agreementdescribes in detail how to proceed in the event ofdefault. If no such agreement has been reached, thepledgee must institute proceedings against the debtorin court and then make a request to the EnforcementService Authority for enforcement. Alternatively, thepledgee may invoke a (somewhat) antiquatedprovision (Chapter 10 Section 2 of the SwedishCommercial Code) to the effect that the pledge is tobe valued and offered for sale in accordance withextremely impractical rules. The provision mentionedis, however, not mandatory and is therefore routinelyopted out of in the parties’ pledge agreement.It should be noted, however, that even if thepledgee may, according to the pledge agreement,determine how enforcement shall be conducted, thepledgee always has a fiduciary duty towards thepledgor and ultimately its other creditors. The extentof the duty is determined by the nature of the pledge,but in general none of the parties may act in such away that the other party’s position deteriorates.For instance, the pledgee must maintain thepledged property in such a way that it is not at risk.In doctrine it has also been stated that the pledgeemay be obliged to take measures if there is a threatthat the pledged property may be at risk.Furthermore, as a general rule the pledgee isprobably obliged to notify the pledgor in advance thatthere is an intention to enforce the share pledgeagreement if the debt is not paid in time, irrespectiveof how enforcement will be carried out. The pledgeeshould also normally inform the pledgor of whatactions he or she may take to protect his or her right,such as the possibility to redeem the pledge and paythe pledgee’s costs. There is no reasonable noticeperiod stipulated in Swedish law, and this has to bedetermined on a case by case basis. Furthermore, ifthe shares are to be sold to a third party throughauction or otherwise, potential buyers should be givena certain time to acquire sufficient knowledge aboutthe asset in question, as this is a prerequisite forestablishing a fair market value. In our opinion this is afiduciary duty of the pledgee.167

In addition to the above, a pledge agreement maynot contravene article 37 of the Swedish ContractsAct, according to which a provision whereby the fullvalue of a pledge or other security interest may beforfeited by the pledgee will be treated as null andvoid. The pledgor may not, according to the act,commit in advance to forfeit the potential ‘overvalue’that may exist in the pledged asset after deducting thesecured claim.Under Swedish law share pledges may be enforcedin different ways if so agreed, and the pledgee willgenerally have the possibility to acquire the shares byway of setoff (credit bid). If the value of the shares ishigher than the secured debt then the ‘overvalue’should be passed on to the pledgor or other potentialsecond ranking creditors. The enforcement of theshares is very often not part of a ‘public’ auctionprocess and the value is instead established throughvaluation. The agreement often stipulates who shallconduct the valuation, but seldom how it shall beconducted. Problems related to the enforcement andthe valuation may to some extent be avoided bycareful drafting of the pledge agreement, but eventhen certain fiduciary duties arise out of general legalprinciples, regardless of the wording of the agreement.Some particularly interesting guiding principles withregard to enforcement and valuation of shares may befound in the Swedish Bankruptcy Act. In a bankruptcy(insolvent liquidation) a creditor with a pledge overmoveable property normally has to give notice to thetrustee of the bankruptcy estate and offer the trusteeto redeem the property. However, a creditor withpledge in financial instruments (e.g shares) mayarrange for the pledged property to be sold oracquired by setoff immediately without notice,provided that it is conducted in a “commerciallyreasonable manner”, according to the Bankruptcy Act,Chapter 8 article 10. Previously, the provision statedthat the sale should be conducted in accordance withthe current stock exchange or market price, but thewording was altered as a result of an EC Directive onfinancial collateral arrangements. In our opinion theprovision requires the enforcement and valuation tobe conducted in a manner that achieves a reasonableand fair market value.The Carnegie caseIn a recent Swedish case known as the ‘Carnegie case’,issues concerning the valuation of enforced shares wereexamined. Although the case involved shares of aregulated financial institution which were pledged to,and later redeemed by, the Swedish Government inaccordance with a specific piece of legislation, in ouropinion it supports the general principle that the fairmarket value should be found in a valuation.During the financial crisis in the autumn of 2008,the Swedish Government took a number of measuresto stabilise the Swedish market, such as adopting anew law on state aid to credit institutions (the‘Support Act’). The aim of the law is that severeproblems in banks and other lending institutions aremanaged in an effective way to prevent a crisis in thefinancial system.The law also permits the state under certaincircumstances to redeem the shares of an institutionwhich is subject to support. Disputes concerningagreements for support under the Support Act are tobe reviewed by a <strong>Review</strong> Board. Upon enforcementunder the Support Act, the redemption price for theshares shall be determined to match the price whichcould be expected in a sale under normal conditions.Shortly after the Support Act entered into force,Carnegie Investment Bank (CIB) received a supportloan from the Swedish Central Bank. The NationalDebt Office (NDO) took over the loan and CIB’sparent company (‘the Parent’) pledged all of theshares in CIB as security for the loan. Under thepledge agreement NDO had the right to enforce thepledge if CIB’s licence to conduct banking activitieswas revoked by the Swedish Financial SupervisoryAuthority (SFSA).On November 10, 2008 CIB’s banking licence wasrevoked with immediate effect. The NDO enforcedthe share pledge over CIB with reference to thepledge agreement. Due to the takeover CIB regainedits licence.The share pledge agreement stipulated that ifNDO enforced the share pledge other than by publicauction, the shares should be valued with regard tothe circumstances at the time of the takeover, andaccording to the principles set out in the Support Act.The preparatory works of the Support Act stateregarding the redemption of shares that rules andpractices which have been developed for theredemption of minority shares should be indicative.It should be the case that for companies theredemption price of the shares should be determinedso that it corresponds to the price for the shares thatcould be expected in a sale under normal conditions.The starting point should be that the outcome for theshareholder should be the same as in a voluntary saleof the shares.After the enforcement, the shares of CIB werevalued by PwC. The valuation was based on the factthat CIB had lost its licence at the time of thetakeover, and the NDO notified the Parent that thesecured obligations exceeded the value of thepledged shares, for which reason there was noovervalue to report to the Parent. The Parentrequested a review of the valuation, stating that the168

value should be determined on the basis that CIBhad a licence to conduct banking activities at thevaluation date.It shall be noted that the issue of the disputedvaluation in this case does not refer to shares whichthe Swedish state enforced under the rules in theSupport Act, but rather a share pledge that wasenforced under a share pledge agreement.The <strong>Review</strong> Board’s decisionThe Parent requested that the <strong>Review</strong> Board determinethe value of CIB at the time of the takeover and thatthe <strong>Review</strong> Board determine whether the NDO wasobliged to make payment to the Parent.The NDO argued that the valuation should bebased on a liquidation perspective, while the Parentstated that it was unreasonable to base the valuationon the short time that CIB did not have a licence, andthat the valuation should be based on the principle ofgoing concern.The <strong>Review</strong> Board's decision of October 3, 2011essentially started from PwC’s valuation, but accordedthe shares a somewhat higher value. In summary, the<strong>Review</strong> Board did not find that the NDO was tomake payment to the Parent.The <strong>Review</strong> Board essentially found that the valueof the shares, according to the pledge agreement,should be based on conditions at the time of thetakeover relating to the highest price that an informedand financially strong buyer would, as of this time, bewilling to pay for the shares.The <strong>Review</strong> Board considered it irrelevant to thevaluation that it related to a time when CIB’s licencewas revoked or still existed, as the essential factor wasthat CIB had been conducting its business in such away that there was a risk of revocation of the licence.A company which on November 10, 2008 wasinterested in buying the shares in CIB had to take intoaccount that certain business activities would need tobe wound up as a result of the revocation decision or,to avoid the revocation decision, the costs needed forchanges to the bank’s organisation and capital situationwhich were acceptable for the SFSA.SummaryA share pledge offers the pledgee a possibility toenforce the security in an effective and controlled way.The way the enforcement procedure is structured andrelated issues such as valuation are critical, however, andthe Swedish law in this respect is not precise and istherefore subject to arguments around interpretation.Scattered provisions in different laws such as theprovision in article 37 in the Swedish Contracts Act,which prohibits agreements that state that the pledgeshall be forfeited in the event of default, protect thepledgor and its creditors.The underlying principle seems to be that the fairmarket value of the pledged assets has to beestablished at the time of enforcement.In the recent Carnegie case the ruling body statedthat the valuation should be made from what aninformed and financially strong buyer would be willingto pay for the shares.The same conclusion could also be drawn fromthe provisions in the Bankruptcy Act, which state thatin a bankruptcy situation pledged shares may be soldimmediately without the consent of the bankruptcytrustee, provided that this is done in a commerciallyreasonable manner. In our opinion this wording impliesthat a sale or valuation should be conducted in such away that the fair market value at the time ofenforcement is obtained.Authors:Odd Swarting, PartnerTel: +46 (8) 5988 9046Email: odd.swarting@setterwalls.seEllinor Rettig, Senior AssociateTel: +46 (8) 5988 9106Email: ellinor.rettig@setterwalls.seSetterwallsArsenalsgatan 6P.O. Box 1050SE101 39 StockholmSwedenTel: +46 (8) 5988 9000Fax: +46 (8) 5988 9090Website: www.setterwalls.se170

Translation risks and their impact upon company valuation:An overview of the Swiss public companiesby Peter Dauwalder and Dr. Michael Märki, Ernst & Young AGWith the globalisation of the economy it has become crucial to understandand adequately hedge foreign currency risks. The vital importance of foreignmarkets, such as Europe, the US and Asia, to Swiss corporates isdemonstrated by the ongoing shift of generated revenues away from theSwiss franc towards foreign currencies. In light of the recent volatility inforeign exchange markets, this currency exposure of the Swiss corporates hasbecome increasingly important – even after September 6, 2011 when theSwiss National Bank announced its intervention in the markets and to defenda minimal value of the euro against the Swiss franc.Currency risk categoriesForeign exchange related risks fall into three categories,as can be seen in Figure 1.Translation risks receive less attention thantransaction and economic risks, both in theory and inpractice. Recent studies show that a clear majority ofcorporates do not hedge translation risks. 2 This raisesthe question of why translation risks carry less weightthan transaction risks. The main reason is due to thewidespread economic theory that a company’s valueis primarily dependent on future cash-flows. Whiletransaction risks directly affect a company’s result andthe future cash-flows, the translation risk, in principle,does not impact the cash-flow, and therefore affectsthe company value only indirectly, if at all.Translation risksThe translation risk is measured by the change of theexchange rate between functional and presentationcurrency in a year-on-year comparison (conversiondifference) and is in most cases recognised as positiveor negative item directly in the company’s equity. 3 Froma theoretical perspective this balance sheet impact isnot a reference for a company’s future development, orfor its valuation. Translation risk would also appear tobe an unsuitable basis for value-oriented managementdecisions since it only represents a conversiondifference in book values and is therefore not aneffective indicator of future cash flows.Behavioural finance challenges this picture of atranslation risk as non-critical in nature. Theseapproaches consider that investors who estimate thefuture development of profits and losses tend to basetheir analysis upon consolidated financials. Accordinglyconsideration must be given to the possible influencetranslation effects may have on the share price andrespectively on the company’s value. The strength ofthe Swiss franc is a key theme across the currentseason of annual report presentations, and translationrisk has become topical point of discussion. Onepresumes that more than a few multinational Swisscorporates will have to explain to their investors whythey could keep year-on-year sales trends level in theirseparate market regions (i.e. when reporting inFigure 1: Foreign exchange related risk categories 1Foreign exchange related risksTransaction risksExchange rate risks in connectionwith cash-flows and components inforeign currenciesTransaction risksExchange rate risks in connectionwith the conversion of balance sheetand profit and loss accounts fromforeign currenciesEconomic risksThe risk of the relative loss of marketposition due to middle to long-lastingfluctuations of exchange rates171

functional currencies) and yet report a decline on aconsolidated level (due to translation effects). Similarly,the financing side could also be affected. Falling(consolidated) financials could lead to higher financingcosts where pricing grid mechanisms are in place. Inextreme cases it is conceivable that negativetranslation effects could lead to a breach of covenantsand a tightening of credit lines.This gives the management of translation risk anew importance. In theory translation risks can beavoided simply and cost effectively by carrying out alltransactions in the same currency. In practice thisconvergence goal would be best achieved out if thecurrency of the main market region were chosen asthe presentation currency.The presentation currency of SPIcompaniesThe majority of the listed companies in Switzerlandpresent their annual report in the local currency – theSwiss franc.Figure 2: Overview on presentation currencies appliedby the SPI index members 4€6%US$10%of the parent company and its subsidiaries by theirrespective functional currency. Neither the SIX (SwissInfrastructure and Exchange) nor the generallyaccepted accounting principles require segmentreporting by currencies; hence the aforementionedtranslation risk analysis cannot usually be entirelyfulfilled. The following analysis is based upon the IFRSaccounting standards requirements for geographicalsegment reporting. The following assumptions havebeen made: The turnovers in the regions of America(Canada, North, Middle and South America) weregenerated in US dollars; turnovers in Europe were ineuro and turnovers in Switzerland were in Swiss franc.The chart in Figure 3 plots the turnovers of all SPIenterprises, divided into Swiss franc and foreigncurrencies (i.e. US dollars and euro).Figure 3: Sales split between Switzerland and foreigncountries 5Foreign sales (in SFrm)3,5003,0002,5002,0001,5001,000500SFr84%00 500 1,000 1,500 2,000 2,500 3,000 3,500Domestic sales (in SFrm)SFr € US$Of the current 214 Swiss Performance Index (SPI)members, only 33 companies report in a foreigncurrency (12 in euro and 21 in US dollar, see Figure2). With regard to the aforementioned convergencegoal, one question naturally arises: How much did theexistence of translation risks influence the choice ofthe presentation currency in the past? If not, to whatextent is there a need to follow up in this regard? Inany case the aggregated sales split of the indexmembers does not appear to support thepredominant standing of the Swiss franc aspresentation currency – from a translation riskperspective. Even though 84% of all SPI companiesreported in Swiss franc, in 2010 only just <strong>13</strong>% of thetotal turnover of the index members were generatedin Switzerland.Translation risks by SPI companiesThe analysis of a company’s exposure to translationrisks requires the listing of all net assets and cash-flowsUnsurprisingly the index members with the USdollar or the euro as representation currencygenerated only a minor part of their turnovers inSwiss franc. The main markets of these companies liein America and Europe and the main tradingcurrencies are the US dollar and the Euro respectively.In contrast the index members which use theSwiss franc as a presentation currency showed amixed picture. On one hand, a group of smallcompanies near the X axis is visible, which remainnationally aligned and generate their turnovers inSwitzerland despite their listing on the stockexchange. On the other hand, there is a mass of bluedots near the Y axis. These corporates really generateonly a small part of their turnover in Switzerland yetthey still use the Swiss franc as presentation currency.In other words these companies directly exposethemselves to translation risks. It should bedetermined for these companies what is moreimportant with regard to foreign exchange risk172

Who can helpcrisis-proof my company?Entrepreneurs Agenda |

management – a change of the presentation currencycombined with a vast reduction in translation risks orthe continuity in presenting the financial statements inSwiss franc.References:• Seethaler, P., Hass, S., Brunner, M., 2007.Praxishandbuch Treasury-Management: Leitfaden fürdie Praxis des Finanzmanagements. Gabler Verlag.• Bonini, S., Dallocchio, M., Raimbourg, P., Salvi, A., 2011.Do Firms Hedge Translation Risk? Working Paper2011. Download by SSRN:http://ssrn.com/abstract=1063781.Notes:1Seethaler, Hass und Brunner (2007), S. 345.2Bonini, Dallocchio, Raimbourg und Salvi (2011).3This procedure corresponds to the Current RateMethod and is used if the functional currencycorresponds to the presentation currency of theholding company. If the functional currency is notidentical to the presentation currency of the holding,the financials in a foreign currency are converted byusing the Temporal Method. The conversiondifferences, contrary to Current Rate Method, arerecognised in the profit and loss statement (see alsoIAS 21).45Data rely on Bloomberg.Several growth companies generate only marginalturnovers despite their stock market listing. For thisreason, such enterprises are positioned near thecrossing of both axes in the scatter plot. For abetter display, the scale of maximum SFr3.5bn waschosen. This reduces the total number of analysedSPI companies from <strong>13</strong>2 to 107.Authors:Peter Dauwalder, PartnerTransaction Advisory ServicesEmail: peter.dauwalder@ch.ey.comDr. Michael Märki, Senior ManagerTransaction Advisory ServicesEmail: michael.maerki@ch.ey.comErnst & Young AG (Switzerland)Maagplatz 1PostfachCH-8010 ZürichSwitzerlandTel: +41 58 286 34 23Fax: +41 58 286 30 04Website: www.ey.com/ch174

Pitfalls for a foreign entity in distress that maintainsassets or an operation in Switzerlandby Ueli Huber and Simon Lang, HomburgerIf a foreign administrator comes to Switzerland to lay his hands on assetssituated here, his powers are fairly limited. He will need to apply to thecompetent court to obtain recognition of the foreign insolvency adjudication.Comparably, if these assets are part of a Swiss registered branch office, such abranch office is subject to separate Swiss bankruptcy proceedings. A foreignadministrator will therefore not be in a position to repatriate branch assets ifa branch bankruptcy has already been commenced.Limited powers of a foreignadministrator to act in SwitzerlandIf a foreign entity becomes subject to an insolvencyproceeding, but maintains assets abroad, the questionarises how these assets can be pulled into the foreignestate. Switzerland is not a member of the EU andtherefore does not apply the relevant regulation oninsolvency proceedings. And it has not enacted theUncitral model law. But it provides for a proceeding bywhich a foreign insolvency adjudication can berecognised in Switzerland if assets are situated here,provided the prerequisites are met. Followingrecognition, assets in Switzerland will be available to alimited range of creditors (including secured creditorsfor security situated in Switzerland) in a limitedbankruptcy proceeding, a so-called mini-bankruptcy.After these creditors have been fully satisfied or in theabsence of such creditors, the assets (or the countervalue following their sale) can be made available tothe administrator of the foreign estate, provided thatSwiss creditors will be treated equally in the foreignproceeding.The purpose of the recognition process and themini-bankruptcy over assets situated in Switzerlandtaking place is obvious. Swiss law wants to makesure that certain privileged creditors (which mostlyare not big creditors, but smaller ones, such asemployees) are not hassled by participating in foreignproceedings and that Swiss creditors who will have toparticipate in foreign proceedings will meet a levelplaying-field.The prerequisites for recognition of a foreigninsolvency adjudication contain an element that oftenproves to become a stumbling block for therecognition procedure: reciprocity. Reciprocity requiresthat Switzerland will only recognise a foreigninsolvency adjudication if the country where theadjudication originates from would also recogniseSwiss insolvency adjudications. There are still a numberof countries which do not recognise foreign insolvencyadjudications generally and therefore an insolvencyadjudication originating from such a country will notbe recognisable in Switzerland.Given globalisation, this is a very unsatisfactoryoutcome for the foreign administrator, as the assetssituated in Switzerland will remain available toindividual creditors of the foreign entity that can makethe race to the Swiss courthouse for an attachment,but due to a lack of recognisability of the foreigninsolvency adjudication will not be available to theestate as a whole.It comes as no surprise that, given the problems aforeign administrator may face regarding recognition,the Swiss Federal Supreme Court has had to dealwith a number of cases recently where a foreignadministrator tried to circumvent the hurdles ofrecognition and to get hold of the relevant assetsusing a different method.Up until 2003 a foreign administrator wasoccasionally successful in repatriating funds tocountries which could not get their insolvencyadjudications recognised in Switzerland, but thatpractice has largely been stopped in recent years.Before distilling general findings resulting from thatcourt practice, let us have a look at some of thetypical situations the Swiss courts have faced:• A foreign administrator obtained a judgmentabroad against a Swiss-based solvent debtor onfacts showing fraudulent conveyance. Theadministrator tried to enforce that judgmentagainst the Swiss debtor in Switzerland. The foreignadministrator was denied standing lackingrecognition of the foreign insolvency adjudication(which unfortunately was not an option due tolack of reciprocity).• Similarly, a foreign administrator sued a Swiss-basedsolvent debtor for payment under a settlement theadministrator and the debtor had reached. Thesettlement concerned a fraudulent transfer matter.With respect to fraudulent conveyance matters175

one has to note that Swiss international insolvencylaw explicitly provides that the right to sue is withthe Swiss administrator handling the mini-bankruptcyand that only if the Swiss administrator and thecreditors admitted to the mini-bankruptcy waive theright to sue, such right will pass to the foreignadministrator. So the denial should not have come asa surprise.Further cases involved the following situations:• A foreign administrator sued a Swiss solventdebtor in a lawsuit in Switzerland for a claim theestate argued to have. In that case, reciprocity wasnot an issue, but the foreign administrator hopedto be able to take a shortcut, having the foreigninsolvency adjudication recognised as part of thelawsuit. That did not work, however, because therecognition of the foreign adjudication would nothave had the same effects as a proper recognition;it would not have led to a mini-bankruptcy andtherefore would have deprived certain creditorsof their privileges.• In several cases, a foreign administrator filed a claimto be registered in the claims schedule of anequally insolvent debtor of the foreign estate. Theclaim was refused because the foreignadministrator had not had the foreign proceedingrecognised in Switzerland.The rationale behind these decisions, which alldenied the foreign administrator access to theestate's assets in Switzerland, has been more or lessthe same: Within the perimeters of the proceedingsprovided for by Swiss international insolvency law,Switzerland permits the recognition of foreigninsolvency adjudications and, provided a limitedrange of creditors with privileges have beensatisfied, also the repatriation of excess funds to theforeign estate.To grant a foreign administrator powers broaderthan to demand recognition of the foreign insolvencyadjudication would permit these rules to beundermined, which in turn would deprive creditors ofprotection granted to them by Swiss internationalinsolvency law.These cases therefore make it quite clear that, aslong as the foreign insolvency adjudication has notbeen recognised here, the possibility of the foreignadministrator attracting the estate’s assets inSwitzerland into the estate are virtually non-existent.It remains to be added that the Federal SupremeCourt has made a fairly important statement in itsmost recent decision, where the foreign administratorargued that the claim was not a bankruptcy relatedclaim and therefore his standing should not bemeasured against the standards of Swiss internationalinsolvency law.The court did not hear that argument. It clearlystated that Swiss international insolvency law wouldapply if the foreign administrator's act or action hadfor its purpose to repatriate funds of the estatesituated in Switzerland. The nature, legal basis, etc. ofsuch act or action are not relevant.There have been many cases arguing that, ifrecognition is not possible due to lack of reciprocity,the foreign administrator should otherwise be givenaccess to these assets. While the courts recognise thatreciprocity may pose an issue and runs against theequal treatment of all creditors of an estate, theynote two things: (i) on the one hand, this is not aproblem originating in Swiss law, but in foreign lawwhich does not recognise Swiss or, more often,foreign adjudications generally, i.e. does not respectcreditor equality; and (ii) on the other hand, anycircumvention of the recognition proceedings woulddeprive certain creditors of the protection granted tothem by Swiss law.The Federal Supreme Courts also held in a veryrecent case that Swiss statutory law is so clear on thisaspect that the courts are not in a position to ignorethe requirement of reciprocity. Foreign administratorswill in the future, therefore, have to have their foreigninsolvency adjudications recognised in order to attractassets of the estate situated in Switzerland and,unfortunately, they will continue to be frustrated withsuch efforts if the originating country does not grantreciprocity.Finally, Switzerland has enacted new rules on therecognition of insolvency adjudications concerningforeign banks. While the prerequisites (includingreciprocity) remain the same, the rules applying onbanks will permit the supervisory agency Finma (whois running the process rather than a court orbankruptcy administrator) to transfer assets to theforeign administrator without a mini-bankruptcy beingconducted. It is far too early, though, to evaluate whateffect these rules will have, as it appears that theyhave not been applied in practice as yet.<strong>Insolvency</strong> of a branch office inSwitzerland and other forms of debtenforcement against assets of aforeign debtorTwo fundamental principles set the guidelines for debtenforcement procedures against Swiss assets of aforeign entity:(i) Firstly, Swiss debt collection authorities do notgenerally have jurisdiction over assets located inSwitzerland belonging to a foreign entity; theexception to this rule is if the foreign debtor eithermaintains an informal (unregistered) establishmentin Switzerland or a formal branch office (i.e. an176

The leading edgein business lawworking groups, integrating the skills and experienceof more than 100 lawyers and tax experts focusing ondings for the concerned enterprises and representing creditors in such proceedingsrepresentation of parties in proceedings concerdings and coordination between foreign and domeUeli HuberDaniel HaeberliPrime TowerT +41 43 222 10 00F +41 43 222 15 00

establishment that is registered in a commercialregister in Switzerland).(ii) Secondly, foreign adjudications of bankruptcy donot per se have any effect in Switzerland. However,as described above, Switzerland provides for amechanism to obtain recognition of foreignbankruptcy adjudications.As a result, debt enforcement against the assetsbased in Switzerland of a legal entity domiciled outsideof Switzerland is, in general, possible in the followingthree ways:• if the foreign entity has an establishment inSwitzerland, by way of debt collection against theSwiss establishment, resulting in the seizure andforeclosure of such assets;• if the foreign entity has a branch office inSwitzerland, by way of debt collection against thebranch office resulting in a branch bankruptcy;and/or• by way of recognition of foreign bankruptcyadjudications in Switzerland resulting in a minibankruptcyprocedure limited to the assets of theforeign debtor located in Switzerland (for detailson the prerequisites for such a recognition andthe subsequent mini-bankruptcy procedure, seePart I: Limited Powers of a Foreign Administrator toAct in Switzerland above).It is important to note that neither the SwissFederal Act on Debt Collection and Bankruptcy(Bankruptcy Act) nor the Swiss Federal Act on PrivateInternational Law (PILA) contain provisions whichwould allow the application of the COMI-principleknown in the EU.Debt collection against a branch officeUnder certain conditions a foreign company canregister its establishment in Switzerland as a branchoffice. With the registration of the establishment in thecommercial register, such an establishment becomesa branch office.A creditor with a claim against a branch office caninitiate debt collection proceedings against the branchoffice in Switzerland. In such a proceeding, the foreigndebtor company owning the branch office is thenamed debtor. Service of documents can, however, bemade directly to the branch office.In contrast to debt collection proceedings againstan unregistered establishment, debt collectionproceedings against a branch office can result in theinsolvency of the branch office if the debt pursuedremains unpaid.Compared to a fully-fledged bankruptcy of anentity domiciled in Switzerland, the effects of a branchbankruptcy are limited in several respects:• Only creditors (Swiss or foreign) who have claimsrelating to the business of the branch office will beadmitted to file claims in the branch bankruptcy.• The branch bankruptcy encompasses the assets ofthe foreign debtor company belonging to thebranch office. Pursuant to a minority view indoctrine a branch bankruptcy also includes otherassets of the foreign debtor company situated inSwitzerland. While this question has not yet beendecided by the courts, we believe that it is notcorrect to include assets unrelated to the businessof the branch office in a branch bankruptcy, mainlybecause creditors of the foreign debtor companynot owning a debt pertaining to the branch officewill not be permitted to participate in the branchbankruptcy. Excluding assets unrelated to thebusiness of the branch office mirrors thatlimitation.In comparison to the mini-bankruptcy describedabove the scope of the branch bankruptcy, is thusnarrower, both in terms of assets and liabilities.Competition of branch insolvency andrecognition of a foreign bankruptcyadjudicationIn light of the two different procedures for debtenforcement against the assets of a foreign debtorboth leading to a bankruptcy like winding down, thequestion if and how parallel branch bankruptcy andmini-bankruptcy proceedings have to be coordinatedis key.According to the PILA, debt collection proceedingsagainst a branch office are “permitted” until the claimsschedule for creditors in the mini-bankruptcy hasbecome final and enforceable. The law is silent onthe question what “permitted” means and what itseffects on a parallel branch bankruptcy are once themini-bankruptcy has reached that stage.The general view is that at the latest when thebranch bankruptcy has been declared, it can no longerbe undone. Once the branch bankruptcy has beenopened, the assets of the branch office will remainseparated and will be liquidated in the branchbankruptcy. If the claims schedule in the competingmini-bankruptcy would become final and enforceableat an earlier stage of the debt collection proceedingsagainst a branch office, the latter would be collapsedinto the mini-bankruptcy.A mini-bankruptcy would also encompass assetsof a branch office. However, if debt collectionproceeding against a branch office were commencedand, as a result, a branch bankruptcy adjudicated aftera parallel mini-bankruptcy proceeding has beeninitiated but before the claims schedule in themini-bankruptcy has become final and enforceable, theassets pertaining to the business of the branch officewould have to be separated from the estate of themini-bankruptcy.178

The fact that the range of creditors permitted toparticipate in a branch bankruptcy or in a minibankruptcyare not identical justify the fact that Swisslaw permits two estates to be run in parallel. At thesame time, this argument also explains why assets notpertaining to the business of a branch office should beexcluded in a branch bankruptcy. To include suchassets would be to the detriment of the creditorspermitted to participate in a later mini-bankruptcy, asthe estate of that proceeding would be left withoutany assets.Authors:Ueli Huber, PartnerSimon Lang, AssociateHomburger AGHardstrasse 2018005 Zurich, SwitzerlandTel: +41 43 222 1000Fax: +41 43 222 1505Email: ueli.huber@homburger.chsimon.lang@homburger.chWebsite: www.homburger.ch179

Corporate restructuringin Thailandby Surasak Vajasit and Pakpoom Suntornvipat, Hunton & WilliamsIn Thailand, the current situation on debt restructuring is different from 1997,when Thailand experienced its worst economic crisis. Nowadays, financialcreditors, which are usually major creditors, seem to be uninterested in debtrestructuring through the business reorganisation proceeding under Chapter3/1 of the Bankruptcy Act; the proceeding is time consuming and while it isunderway, there are uncertainties. Each financial creditor is likely to preferout-of-court debt restructuring, which, of course, may not be easy if thedebtor is in default to several creditors simultaneously.As for debtors, they seem to prefer to go whicheverway will be to their benefit as long as the creditors aresupportive. Debtors’ greatest desire is to turn theirbusiness around and one of the difficult tasks is how tosecure their credit lines from the financial creditor whiletheir balance sheets are negative. The present policy ofeach financial institution is that if a debtor files forbusiness reorganisation, its credit lines will be ceased,which results in the debtor being put into moretrouble.In Thailand, the garment business should be themost impacted. In addition to its tough economicconditions, a huge garment factory usually employsmore than 1,000 workers. Economic impact willtherefore be not only on the company but also on alarge number of workers. Laying off a great quantity ofworkers is a difficult and risky job that employerswould want to avoid.To keep the failing garment business alive, the debtrestructuring may be unavoidable, but financialinstitutions are cautious in lending money to thegarment business because it is regarded as a sunsetbusiness.To restructure the operations, the companies mayneed new money either from a financial institution oran investor. Companies that have no clean assets tosecure a loan will find it difficult to obtain any loanfrom a financial institution. Seeking a new investor maybe an alternative, if the business is of interest to thenew investor and a company’s outstanding debt is at amanageable level.Filing of reorganisation petitionA petition for an order to reorganise business may befiled with the court by the debtor; by one or more ofthe creditors who are owed, in aggregate, at leastBt10,000,000; or by certain government agencies.To file the petition for business reorganisation,certain requirements need to be met, including: (i) thedebtor must be insolvent; (ii) the debtor is indebtedto one or more creditors for a definite amount of notless than Bt10,000,000, irrespective of whether suchdebt is due immediately or in the future; and (iii)there are reasonable grounds and prospects toreorganise the business of the debtor.Contents of petitionThe petition for business reorganisation must includedetails of the following matters:• the insolvency of the debtor;• a list and addresses of one creditor or more towhom the debtor is indebted for an amount, inaggregate, of no less than Bt10,000,000;• reasonable grounds and prospects to rehabilitatethe business of the debtor; and• the name and qualification of the planner, includinghis letter of consent.Hearing of petition and automaticstayAfter the court has ordered the acceptance of thepetition, the court is required to proceed with thehearing of the petition on an urgent basis but anadvertisement of the hearing must be published notless than twice in at least one widely distributednewspaper at intervals of not more than seven daysand a copy of the petition must be given to, amongothers, known creditors and the registrar of the debtor(if any) at least seven days prior to the hearing date.The hearing is to be conducted on a continual basiswithout postponement unless there is an event of forcemajeure. Following acceptance of the petition by thecourt, the debtor is protected from certain specifiedactions that may adversely affect its business, including(the Automatic Stay):• commencement of civil or arbitration proceedingsin respect of debt or obligation that arises beforethe date on which the court approves the business180

eorganisation plan;• commencement of bankruptcy proceedings;• enforcement of judgments;• revocation of existing licences by regulatoryauthorities and orders by such authorities to ceasebusiness operations;• enforcement of security by secured creditorswithout court approval;• seizure and sale of the debtor’s assets; and• suspension of electricity, water and other utilityservices without court approval (unless there aredefaults on two successive payments).The Automatic Stay remains in place to protect thedebtor until the earlier to occur of the date on which:(i) the period of time for implementation of thebusiness reorganisation plan expires; (ii) the businessreorganisation plan is successfully implemented; (iii)the court dismisses the petition; (iv) the court revokesthe business reorganisation order; (v) the courtterminates the business reorganisation proceeding; or(vi) the court orders the debtor to be under absolutereceivership, as the case may be.Business reorganisation orderAfter the petition for business reorganisation isaccepted, the court hearing will in principle beconducted on an urgent basis. Following the courthearing, the court may then issue an order for (i)dismissing the petition; (ii) business reorganisation; or(iii) business reorganisation with appointment of theplanner. If the court issues an order for businessreorganisation and appoints the planner nominated bythe petitioner, the planner will assume temporarycontrol over the management of the debtor’s businessat the date on which such order has been made.Appointment of plannerUnless an alternative person is proposed by the debtoror by other creditors or the person proposed is notqualified to act as the planner, the court will appoint theplanner nominated by the petitioner and announcesuch appointment in the Government Gazette. If thenominated person is not qualified or another person isnominated by the debtor or by other creditors, ameeting of creditors will be held at which a resolutionwill be passed to appoint the planner. The planner isresponsible for the preparation of the businessreorganisation plan and assumes all powers and dutiesof management and shareholders (other than the rightto receive dividends) of the debtor.Filing of claimsFollowing the appointment of the planner, everycreditor whose claim had occurred before the courtorder for business reorganisation was issued is requiredto file its claim for repayment of debts with the officialreceiver within one month of the announcement of theplanner’s appointment in the Government Gazette. Anycreditor who is eligible for filing such claim and fails todo so within such one-month period will lose the rightto receive payment regardless of whether the businessreorganisation plan succeeds, unless (i) the businessreorganisation plan specifies otherwise; or (ii) the courtrevokes the business reorganisation order.Business reorganisation planThe plan for business reorganisation of the debtor willbe prepared by the planner and be submitted to theofficial receiver (with copies for the debtor and each ofthe creditors who is eligible to vote) within threemonths of the announcement of the planner’sappointment in the Government Gazette. Twoextensions of one month each may be granted by thecourt.At a minimum, the plan must contain the following:• the reasons for reorganising the business of thedebtor;• details concerning the assets, liabilities and otherbinding obligations of the debtor at the time thecourt issues an order to reorganise the business ofthe debtor;• principles and method for the businessreorganisation:(i) steps in reorganising the business;(ii) payment of debts, extension of time forpayment of debt, reduction of the debt andclassification of creditors;(iii) reducing and increasing capital;(iv) creating debts and raising funds, includingsources of funds and any conditions pertainingto such debt and funds;(v) managing and acquiring benefits from the assetsof the debtor; and(vi) conditions regarding payment of dividends andother benefits.• redemption of security in the case where there aresecured creditors and liabilities of guarantors;• ways to solve the problems if there is a temporarylack of liquidity while the plan is beingimplemented;• action to be taken in cases in which a claim ordebt is assigned or transferred;• the name, qualifications and letter of consent ofthe plan administrator and their compensation;• the appointment of the plan administrator and hisrelease from this position;• disclaiming assets of the debtor or rights undercontracts made by the debtor where the termsare more onerous than the benefits to be derivedtherefrom by the debtor; and181

• the time period for implementing the plan, whichmust not exceed five years. Two extensions of oneyear each may be granted.Approval of reorganisation planThere are two steps of approving the plan, i.e. approvalby the creditors and approval by the court.Approval by creditorsUpon receiving the plan from the planner, the officialreceiver must call a meeting of creditors to discusswhether to approve the plan. For the purposes ofvoting, the creditors are divided into various classes asfollows:(i) each secured creditor holding a secured claim in theamount of not less than 15% of all debts that maybe claimed in the business reorganisationproceeding;(ii) all other secured creditors not classified in (i)above;(iii) unsecured creditors, which may be classified intovarious sub-classes according to their variousinterests, provided that unsecured creditors thathave substantially the same or similar kinds ofclaim or interest are grouped into the same subclass;and(iv) subordinated creditors.Approval of the plan requires a “special resolution” of:• the meeting of each and every class of creditors; or• the meeting of, at least, one class of creditors(excluding those deemed to have always approvedthe plan) and the aggregate amount of claims ofcreditors who cast votes in favour of the plan inthe meetings of every class of creditors is not lessthan 50% of the total amount of claims of thecreditors who attend the meetings, either inperson or by proxy, and also vote on the plan.In this context, a “special resolution” means aresolution of a majority in number of creditors whosedebt is not less than 75% of the total amount of debtof creditors who attend the meeting, either in personor by proxy, and also vote on such resolution. If,however, no special resolution to approve the plan canbe passed by the creditors, the official receiver willreport such non-approval to the court. The court willthen revoke the business reorganisation order. In theevent that there is a bankruptcy suit that has beensuspended during the reorganisation proceeding andthe court deems it appropriate to adjudge the debtorbankrupt, the court will then dismiss the petition forbusiness reorganisation and thereafter resume suchsuspended bankruptcy suit.Approval by courtThe official receiver will report to the court theresolution approving the plan by the meeting ofcreditors. The court will then promptly call a hearing toconsider the plan. If the plan meets the requirementsset out in the Bankruptcy Act, the court will approvethe plan. Following court approval of the plan, a planadministrator (the plan administrator) assumes thepowers and duties of the planner. However, if the courtrejects the plan, the court will then revoke the businessreorganisation order. In the event that there is abankruptcy suit that has been suspended during thisreorganisation proceeding and the court deems itappropriate to adjudge the debtor bankrupt, the courtwill then dismiss the petition and thereafter resumesuch suspended bankruptcy suit.The Thai court takes the view that the BankruptcyAct of Thailand requires that business reorganizationplans be approved by the court, meaning that theBankruptcy Act of Thailand empowers the court toplay the economic role to control the businessreorganisation proceeding such that the relevantpersons are treated fairly and minor creditors areprotected for the most benefit of the creditors andthe country as a whole. The Thai court further viewsthat the requirements under the Bankruptcy Act ofThailand are only the minimum standard and the Thaicourt can use its discretion to approve or disapprovebusiness reorganisation plans.With due respect, it is likely that the Thai courtdoes not consider only the legal requirements underthe Bankruptcy Act of Thailand but also thecommercial perspectives. This creates a lot ofcommercial uncertainties as to how the Thai courtdetermines what is fair and not fair.Implementation of reorganisationplanFollowing court approval of the plan, the plan willbe binding on all creditors filing claims for repaymentand being entitled to receive repayments underthe plan. The plan must be implemented within fiveyears although the court may extend this periodtwice by not more than a year on each occasion.Following the successful implementation of the plan,the court will issue an order for the termination of thebusiness reorganisation proceeding. Thereafter, thedebtor’s management and the debtor’s shareholderswill then resume full control of the business. In thecase that the plan cannot be implemented successfullyand if the court deems it appropriate to adjudgethe debtor bankrupt, the court will order the debtorto be under absolute receivership. However, if thecourt does not deem it appropriate to adjudge thedebtor bankrupt, the court will order for thetermination of the business reorganisation proceeding.Thereafter, the debtor’s management and the debtor’sshareholders will then resume full control of thebusiness.182

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Ongoing restrictions on businessoperationsThroughout the period when the debtor is under thebusiness reorganisation proceeding, the debtor issubject to the following restrictions that may potentiallyaffect its business operations:• Throughout the period of Automatic Stay, thedebtor shall not dispose of, distribute, transfer, rentout, pay debt, create debt or do any act that createsencumbrances over its assets except where such actis essential for the debtor to carry on its ordinarycourse of business, unless otherwise ordered by thecourt.• Under the business reorganisation proceeding, allpower and duties of management and shareholders(other than the right to receive dividends) of thedebtor are taken over by the planner (during theperiod of formulating the plan) and the planadministrator (during the period of implementingthe plan).• During the period when the plan is beingimplemented, the debtor is required to strictlycomply with the plan. The plan may provide for anyrestriction that may potentially affect the businessoperations of the debtor, in which case the debtormust fully comply.Authors:Surasak Vajasit, PartnerPakpoom Suntornvipat, AssociateHunton & Williams34th Floor Q.House Lumpini Building1/3401-3402 South Sathorn RoadBangkok 10120ThailandTel: +66 2 645 88 00Fax: +66 2 645 88 80Email: surasak@hunton.compakpoom@hunton.comWebsite: www.hunton.com184

Recent developments in Ukrainian distresseddebt disposal strategiesby Denis Lysenko and Yulia Kyrpa, Vasil Kisil & PartnersThere has been a continued rise in the Ukrainian distressed debt market in2011 and early <strong>2012</strong>. The aggregate amount of overdue loans in Ukrainereached US$10.4bn (10.7% of the gross loan portfolio) by the end of 2011.In view of relatively high costs incurred by the banksfor keeping non-performing loans (NPLs) on theirbalance sheets, as well as the continuous pressurefrom the National Bank of Ukraine (NBU) tocomply with the economic ratios set forth by thelatter, it became hardly affordable for a number ofUkrainian banks to hold NPLs on their balancesheets, and therefore, banks continued to developsolutions for debts restructuring arrangements orworkouts utilising either in-house or outsourcedresources.Distressed debt disposal methodsDepending on the priority for a distressed debtvendor, the following NPL sales methods appeared tobe the most popular in Ukraine in 2011: (i) opentender, (ii) closed tender, and (iii) outright sale, eachof them having its advantages and disadvantageswhich are considered in Figure 1.Distressed debt disposal structuresIn view of peculiarities of Ukrainian legislation, thefollowing three basic structures are most commonfor the distressed debt disposal process: (i) NPLs saleto a Ukrainian factoring company; (ii) NPLs sale to anon-resident SPV; and (iii) NPLs sale to a Ukrainianventure fund.The choice of the strategy depends on distresseddebts value and the type of the investor.Ukrainian factoring companystructureThe applicable Ukrainian legislation provides for twopossible options of NPLs sale – on the basis of eitherFigure 1: Distressed debt disposal methods – advantages and disadvantagesOption Advantages DisadvantagesOpen (public)tender• Wide range of professional investors.• Potentially higher price for NPLportfolio (as compared to closedtender and outright sale) due to thecompetition among investors.• Sensitive information disclosure due toadvertised sale of NPLs portfolio amongunlimited number of potential investors.• Longer process compared to outrightsale.• Process requires significantmanagement resources.Closed tender• Longer process compared to outrightsale, but shorter compared to open(public) tender.• Confidentiality of the process due tolimited information disclosure.• Limited investor base (a number ofcompanies which cooperate with thevendor).• Process requires significantmanagement resources.Outright sale• Relatively fast process.• Negotiations with onecounterparty only.• Confidentiality of the process dueto limited information disclosure.• Customised transaction structurespecifically tailored to the investor.• One potential investor only.• NPLs purchase price is usually lowerdue to absence of competition.• Risk of failed negotiations.Source: Vasil Kisil & Partners185

factoring (in case of NPLs sale at a discounted value)or an assignment agreement (in case of NPLs sale attheir par value). Brief characteristics of the elementsof a factoring transaction are provided in Figure 2.Until recently it has been a common practice inUkraine to establish debt collection agencies focusedon distressed debt acquisitions in the form offactoring companies, enjoying a status of financialinstitution governed by the Commission forRegulation of Financial Services Market (FSA).To obtain a status of a factoring company thefollowing requirements are to be observed:(a) equity capital of a factoring company mustconstitute no less than UAH3m;(b)established system of accounting and reporting,meeting legislative requirements, has to be inplace;(c) chief executive officer and chief accountant haveto meet eligibility criteria set forth by the FSA;(d)appropriate owned or leased premises,communication facilities, hardware and softwaresuitable for rendering financial services must beavailable; and(e)competent staff for rendering financial servicesmust be employed by the factoring company.In case distressed debts to be sold to the factoringcompany are denominated in any other currency thanUkrainian hryvnias (UAH) it would be advisable tokeep the NPLs vendor as a servicer for collection ofproceeds under the loan agreements, theirsubsequent conversion into UAH and transfer to thefactoring company – to sidestep the requirement ofobtaining a general NBU licence for the performanceof FX transaction by the factoring company.Functions of the vendor, as a servicer of proceeds,can be performed on the basis of the respectiveagency (commission) agreement entered into with afactoring company. According to the said agency(commission) agreement, the NPL vendor is entitledto act on its own behalf but in favour of the factoringcompany, being the NPLs acquirer, as the NBUregulations allow conversion of funds obtained fromthe debtors in foreign currency into UAH on thebasis of the said agency (commission) agreement.In accordance with the FSA regulations, financialinstitutions are obliged to create provisions under theNPLs acquired considering the price paid by thefactoring company for the NPLs acquisition, interestand other payments due accrued from the date ofthe NPLs acquisition.The main guidelines for creation of provisions byfactoring companies, prescribed by the FSA are thefollowing:(a) provisions are to be created in UAH only, hence,under foreign currency denominated NPLs thecalculation is to be made on the basis of theavailable NBU exchange rate; and(b)provisions are to be created on a monthly basisregardless of the factoring company’s financialresults.Since factoring companies are obliged to createprovisions regardless of their financial results,Figure 2: Elements of a factoring transaction1.Loan claims valueDiscounted value of the loan to be paid by the assignee (thefactor).Alternatively a commission for the services rendered by theassignee (the factor) to be paid by the assignor (i.e. so-called‘hidden discount’).2.Acquirer of loan claimsThe assignee (the factor) has to be established as a bank, or anon-banking financial institution, registered by the FSA.3.Consent of the debtor/restrictions envisaged by theloan agreementNo consent of the debtor is required.Restrictions for an assignment stipulated by loan agreements(if any) are not applicable to the given case, therefore, factoringcould be made even in case of the said contractual restrictions.4.Further (secondary)assignmentCan be performed through further factoring agreement only.Source: Vasil Kisil & Partners186

additional equity financing may be required for thispurpose at some point of their activity.According to the FSA regulations, factoringcompanies are obliged to keep non loss-makingactivity, as well as to keep equity capital in an amountof no less than UAH3m in the course of their activity.Hence, as a result of NPL acquisition and creation ofprovisions, factoring companies may incur lossesduring the first and next years of their activity,potentially resulting in their negative equity. To dealwith potential issues that may be raised by the FSA inthis respect it would be advisable to prepare aprofitable long-term financial plan for the factoringcompany prior to registration of the factoringcompany as a financial institution by the FSA.It should also be noted that according to the CivilCode of Ukraine, in case net asset value of thefactoring company (if established in the form of anLLC) at the end of the second or third financial yearis lower than the amount of its registered capital, suchfactoring company would be obliged to reduce itsregistered capital. In case the factoring company’s netasset value at the end of the second or third financialyear is lower than the minimum amount of theregistered capital provided for by the law, suchcompany will be subject to liquidation.Though the recent amendments to the Civil Codeof Ukraine cancelled the minimum amount of theregistered capital for LLCs, there is still a risk of filinga claim by tax authorities aimed at the company’sliquidation in case of its negative net worth. As amatter of practice, Ukrainian tax authorities have notbeen active in filing such claims so far, and, therefore,the risk of liquidation of the factoring company undera court decision could be treated as rather remote.In the worst case scenario (i.e. in case courtproceedings aimed at liquidation of the factoringcompany, having negative net worth, are commencedby the Ukrainian tax authorities), such companywould be entitled to make further sale of NPLs andthe underlying security to another legal entity prior toits liquidation.In addition, it should be noted that the FSA hasrecently issued a regulation prohibiting factoringcompanies to acquire loans borrowed by privateindividuals, limiting distressed debt portfolios to besold to factoring companies to corporate and privateentrepreneur loans only. Further to the saidregulations, several factoring companies have beenalready instructed by the FSA to stop acquiringprivate person loans.From the Ukrainian tax perspective, the Ukrainianfactoring company structure has the followingdisadvantages:(a) the Ukrainian factoring company is subject to allapplicable taxes, including corporate profit tax;(b)the difference between the purchase price paid bythe factoring company for acquiring each separatedistressed debt and the proceeds collected undersuch debt is subject to taxation. Unfortunately, taxlegislation provides for restrictions on nettinglosses and gains under different loans.Consequently, if factoring companies incur lossesunder certain loans, it is impossible by law todeduct such losses against gains obtained underother loans or against taxable profit under othertransactions carried out by the factoring company.Non-resident SPV structureThe structure of NPLs sale to a non-resident SPVwould be less complicated from a regulatoryperspective compared to Ukrainian factoringcompany structure, as the requirements with regardto non-loss making activity or positive net worth donot apply to a non-resident SPV.Another obvious advantage of this structure isthat a non-resident SPV can be established in taxfavourable jurisdictions much faster and cheaper thana factoring company in Ukraine.However, according to the NBU regulations inforce, NPLs may be sold to a non-resident providedthat the change of the creditor under each separateloan agreement (i.e. substitution of NPLs vendor bythe non-resident SPV as the NPL acquirer) is dulyregistered with the NBU prior to effectuating theNPLs sale transaction. Such registration may be donesolely based on the debtor’s application andtherefore entails direct involvement of the borrowersinto the NPLs sale process, which might be apotential deal-breaker if the borrowers are notcooperative with the vendor. Moreover, non-residentinvestors may face serious difficulties within thecourse of distressed debts enforcement due tocomplicated provisions of Ukrainian legislationgoverning legal succession, as well as peculiarities ofthe Ukrainian court process.Therefore, in practical terms, non-resident SPVstructure is workable in a very limited number ofcases.Ukrainian venture investment fundstructureFor tax purposes it might be advisable to sell adistressed debt portfolio to a Ukrainian ventureinvestment fund, managed by an asset managementcompany (the ‘AMCo’), as the Ukrainian tax regimeprovides for certain tax exemptions for such funds -namely, capital gains of a unit venture investment fundare subject to taxation in the following cases only:(a) in case of selling investment certificates (i.e.188

securities evidencing an investor’s right to a sharestake in the fund) by an investor to third parties;(b)in case of selling investment certificates of theventure fund to the said fund itself (e.g. in theevent of repurchase of investment certificates bythe venture fund in view of closing of the latter);or(c) in case of profit distribution between investors ofthe fund.Considering the above, capital gains of venturefunds are not subject to corporate profit taxation, incase they are not received by investors in the processof profit distribution (as dividends), but are reinvestedby the said funds.Such unit venture funds structure, commonlyutilised for efficient tax planning, allows making furthersales of assets without taxation of capital gains tillclosing of the fund, or distribution of profit (if any)between its investors.In the structure discussed, a venture investmentfund does not enjoy the status of a legal entity andrepresents a contractual mutual investment vehicle (aset of assets) jointly owned by the fund’s investorsand managed by the AMCo.All transactions with the venture fund’s assets arecarried out by the AMCo on its own behalf ratherthan on behalf of the fund. According to the laws ofUkraine, asset management activity, includingmanaging venture investment fund, requires a licencefrom the National Securities Commission (the‘Commission’).Therefore, the AMCo is entitled toestablish a venture investment fund upon obtainingsuch a licence from the Commission.Although the applicable Ukrainian laws allowdistressed debt acquisition by a venture fund, theCommission regulations governing such activity arevery underdeveloped. As a result, there might besome issues with proper calculation of the venturefund’s assets and compliance with the reportingrequirements set forth by the Commission.Moreover, the Commission is reluctant to openlyendorse NPLs acquisitions by venture funds due tovague and underdeveloped regulations governingsuch activity, which have been utilised by professionalcollection agencies focused on distressed debtacquisitions in a public outcry against NPLsacquisitions by any other institutions.At present, the Commission is in the process ofdeveloping the respective regulation to fully govern alllegal aspects of distressed debt sales to jointinvestment institutions, including venture investmentfunds. The first stage of this process, which is almostfinalised by the Commission, is carrying out a pilotproject involving several selected venture funds, whichhave been allowed to invest a limited amount indistressed debt acquisition under the Commissionsupervision, for the purpose of testing appropriateregulatory tools and elaboration of a methodologicalbase required for NPL purchases by joint investmentinstitutions.Structural considerationsAs a matter of practice a much wider range of legalissues has to be taken into account for the purposesof proper planning and structuring NPLssale/acquisition transactions, including but not limitedto banking secrecy and personal data disclosurewithin the course of distressed debt disposal, legaldue diligence of assets and limitations of vendor’sliability, transfer of the underlying security to theNPLs acquirer, as well as legal succession of theinvestor and further NPLs enforcement proceedings.Authors:Denis Lysenko, PartnerYulia Kyrpa, CounsellorVasil Kisil & Partners17/52A Bogdana Khmelnytskogo St.Kyiv 01030, UkraineTel: +380 (44) 581 7777Fax: +380 (44) 581 7770Email: vkp@vkp.kiev.uaWebsite: www.kisilandpartners.com189


ALBANIAWolf Theiss SH.P.KEurocol Center, 4th Floor,Murat Toptani Street, AL-Tirana, Albania.Tel: +355 (4) 2274 521Fax: +355 (4) 2274 521Email: tirana@wolftheiss.comWebsite: www.wolftheiss.comDirectorSokol NakoActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.ANGOLAKPMG AngolaEdifício Moncada Prestige, Rua do Assalto aoQuartel de Moncada, Nº 15, 2º Andar,Luanda, Angola.Tel: +244 (227) 280 101Fax: +244 (227) 280 119Website: www.kpmg.co.aoHead of <strong>Restructuring</strong>José Luís SilvaARGENTINAAllende & Brea, S.H.Maipu <strong>13</strong>00, piso 10°, Buenos AiresC1006ACT, Argentina.Tel: +54 (11) 4318 9900Fax: +54 (11) 4318 9999Email: db@allendebrea.com.arWebsite: www.allendebrea.comPartnersDr. Diego BotanaDr. David GurfinkelActivities: Participated in the most relevantcases in the global insolvency andrestructuring arena in the last two years.Deloitte25 de Mayo 596, piso 20°, Buenos AiresC1002ABL, Argentina.Website: www.deloitte.comHead of <strong>Restructuring</strong> Services LATCOEduardo De BonisTel: +54 (11) 5129 2003Email: edebonis@deloitte.comPartnerLuis DubiskiTel: +54 (11) 5129 2003Email: ldubiski@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Estudio Alegria, Buey Fernández,Fissore y MontemerloAvenida Santa Fe 1621, piso 6°, Buenos AiresC1060ABC, Argentina.Tel: +54 (11) 4812 5500/4811 6060Fax: +54 (11) 4812 6245Email: info@estudioabffm.com.arWebsite: www.estudioabffm.com.arFounding PartnerHector AlegriaTel: +54 (11) 4812 5500 ext. 62Email: halegria@estudioabffm.com.arPartnerPablo Buey FernandezTel: +54 (11) 4812 5500 ext. 65Email: pbf@estudioabffm.com.arActivities: Bankruptcy law, debtrestructurings, recapitalisations,reorganisations, pre-packaged plans (acuerdopreventivos extrajudiciales), M&Atransactions; represents borrowers andissuers in lending, debt securities and othertypes of financing transactions.Martelli AbogadosSarmiento 1230, piso 9°, Buenos AiresC1041AAZ, Argentina.Tel: +54 (11) 4<strong>13</strong>2 4<strong>13</strong>2Fax: +54 (11) 4<strong>13</strong>2 4101Email: info@martelliabogados.comPartnersPablo de RossoHugo MartelliActivities: Comprehensive legal services,including those needed in insolvencysituations.Standard & Poor’sTorre Alem Plaza, Avenida Leandro N Alem855, 3rd Floor, Buenos Aires CIOOIAAD,Argentina.Tel: +54 (11) 4891 2100Fax: +54 (11) 4891 2102ARUBAAIB BANK N.V.Wilhelminastraat 36, PO Box 1011,Oranjestad, Aruba.Tel: +297 582 7327Fax: +297 582 7461Email: info@aib-bank.comWebsite: www.aib-bank.comManaging DirectorF.W. GielAssistant Managing DirectorH.M. KoolmanActivities: Providers of investment bankingservices: medium and long term loans, equityparticipation, fund management and financialadvisory services, among others.AUSTRALIAAllens Arthur RobinsonLevel 28, Deutsche Bank Place,Corner of Hunter and Phillip Streets,Sydney NSW 2000, Australia.Tel: +61 (2) 9230 4000Fax: +61 (2) 9230 5333Email: contactus@aar.com.auWebsite: www.aar.com.auPartnersJohn WardeTel: +61 (2) 9230 4892Email: john.warde@aar.com.auMichael QuinlanTel: +61 (2) 9230 4411Email: michael.quinlan@aar.com.auActivities: Its corporate insolvency andrestructuring practice advises on: corporatereconstruction; workouts; receiverships;liquidations; voluntary administrations; creditrecovery; and enforcement.Allens Arthur RobinsonRiverside Centre, 123 Eagle Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3334 3000Fax: +61 (7) 3334 3444Email: contactus@aar.com.auWebsite: www.aar.com.auPartnersMichael IIottTel: +61 (7) 3334 3234Email: michael.ilott@aar.com.auGeoff RankinTel: +61 (7) 3334 3253Email: geoff.rankin@aar.com.auAlf PappalardoTel: +61 (7) 3334 3269Email: alf.pappalardo@aar.com.auActivities: Its corporate insolvency andrestructuring practice advises on: corporatereconstruction; workouts; receiverships;liquidations; voluntary administrations; creditrecovery; and enforcement.Allens Arthur RobinsonLevel 27, 530 Collins Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9614 1011Fax: +61 (3) 9614 4661Email: contactus@aar.com.auWebsite: www.aar.com.auPartnersClint HinchenTel: +61 (3) 96<strong>13</strong> 8924Email: clint.hinchen@aar.com.auTania CiniTel: +61 (3) 96<strong>13</strong> 8574Email: tania.cini@aar.com.auMatthew WhiteTel: +61 (3) 96<strong>13</strong> 8561Email: matthew.white@aar.com.auActivities: Its corporate insolvency andrestructuring practice advises on: corporatereconstruction; workouts; receiverships;liquidations; voluntary administrations; creditrecovery; and enforcement.Allens Arthur RobinsonLevel 37, QV.1, 250 St Georges Terrace,Perth WA 6000, Australia.Tel: +61 (8) 9488 3700Fax: +61 (8) 9488 3701Email: contactus@aar.com.auWebsite: www.aar.com.auPartnerPhilip BlaxillTel: +61 (9) 9488 3739Email: philip.blaxill@aar.com.auActivities: Its corporate insolvency andrestructuring practice advises on: corporatereconstruction; workouts; receiverships;liquidations; voluntary administrations; creditrecovery; and enforcement.Arnold Bloch LeiblerLevel 24, Chifley Tower, 2 Chifley Square,Sydney NSW 2000, Australia.Tel: +61 (2) 9226 7100Fax: +61 (2) 9226 7120Email: info@abl.com.auWebsite: www.abl.com.auPartnerPaul RubensteinTel: +61 (2) 9226 7222Email: prubenstein@abl.com.auActivities: Arnold Bloch Leibler regularlyacts in Australia’s largest and most complexreconstruction and insolvency matters,covering numerous industries, and crossborder insolvencies.Arnold Bloch LeiblerLevel 21, 333 Collins Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9229 9999Fax: +61 (3) 9229 9900Email: info@abl.com.auWebsite: www.abl.com.auPartnerLeon ZwierTel: +61 (3) 9229 9646Email: lzwier@abl.com.auActivities: Arnold Bloch Leibler regularlyacts in Australia’s largest and most complexreconstruction and insolvency matters,covering numerous industries, and crossborder insolvencies.192

Blake DawsonLevel 38, Riverside Centre,123 Eagle Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3259 7000Fax: +61 (7) 3259 7111Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Blake DawsonLevel 32, Exchange Plaza, 2 The Esplanade,Perth WA 6000, Australia.Tel: +61 (8) 9366 8000Fax: +61 (8) 9366 8111Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Blake DawsonLevel 36, Grosvenor Place, 225 GeorgeStreet, Sydney NSW 2000, Australia.Tel: +61 (2) 9258 6000Fax: +61 (2) 9258 6999Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Blake DawsonLevel 26, 181 William Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9679 3000Fax: +61 (3) 9679 3111Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ross McClymontTel: +61 (3) 9679 3025Email: ross.mcclymont@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Blake DawsonLevel 11, 12 Moore Street,Canberra ACT 2601, Australia.Tel: +61 (2) 6234 4000Fax: +61 (2) 6234 4111Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Blake DawsonLevel 4, 151 Pirie Street, Adelaide SA 5000,Australia.Tel: +61 (8) 8112 1000Fax: +61 (8) 8112 1099Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.DeloitteGrosvenor Place, 225 George Street,Sydney NSW 1217, Australia.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesDavid McCarthyTel: +61 (2) 9322 7086Email: damccarthy@deloitte.com.auActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.DibbsBarkerLevel 23, Central Plaza Two, 66 Eagle Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3100 5000Fax: +61 (7) 3100 5001Email: enquiry@dibbsbarker.comWebsite: www.dibbsbarker.comPartnerScott GuthrieActivities: Services include administrations,bankruptcies, corporate voluntaryarrangements, company searches and statusenquiries, court proceedings, creditmanagement consultancy, debt collection,enforcement of security, liquidations,receiverships, statutory demands andinsolvency petitions.DibbsBarkerLevel 6, Canberra House, 40 Marcus ClarkeStreet, Canberra ACT 2600, Australia.Tel: +61 (2) 6201 7222Fax: +61 (2) 6257 4011Email: canberra@dibbsbarker.comWebsite: www.dibbsbarker.comPartnerJohn HillActivities: Services include administrations,bankruptcies, corporate voluntaryarrangements, company searches and statusenquiries, court proceedings, creditmanagement consultancy, debt collection,enforcement of security, liquidations,receiverships, statutory demands andinsolvency petitions.DibbsBarkerLevel 8, Angel Place, 123 Pitt Street,Sydney NSW 2000, Australia.Tel: +61 (2) 8233 9500Fax: +61 (2) 8233 9555Email: enquiry@dibbsbarker.comWebsite: www.dibbsbarker.comPartnerWendy JacobsTel: +61 (2) 8233 9533Email: wendy.jacobs@dibbsbarker.comActivities: Services include administrations,bankruptcies, corporate voluntaryarrangements, company searches and statusenquiries, court proceedings, creditmanagement consultancy, debt collection,enforcement of security, liquidations,receiverships, statutory demands andinsolvency petitions.Ferrier HodgsonLevel <strong>13</strong>, Grosvenor Place, 225 GeorgeStreet, Sydney NSW 2000, Australia.Tel: +61 (2) 9286 9999Fax: +61 (2) 9286 9888Website: www.ferrierhodgson.comPartnerSteven ShermanEmail: steven.sherman@fh.com.auActivities: Independent professional servicesgroup specialising in corporate advisory,corporate recovery and forensic services.Offices in all major Australian capital citiesand Asia.Gadens LawyersLevel 12, 77 Castlereagh Street,Sydney NSW 2000, Australia.Tel: +61 (2) 9931 4999Fax: +61 (2) 9931 4888Email: info@nsw.gadens.com.auWebsite: www.gadens.com.auContactsCampbell HudsonTel: +61 (2) 9931 4957Email: chudson@nsw.gadens.com.auJustin BatesTel: +61 (2) 9931 4763Email: jbates@nsw.gadens.com.auActivities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments andre-documentation.193

Gadens LawyersLevel 1, 19 Gouger Street, Adelaide SA 5000,Australia.Tel: +61 (8) 8233 0600Fax: +61 (8) 8233 0699Email: info@sa.gadens.com.auWebsite: www.gadens.com.auContactsWendy JonesTel: +61 (8) 8233 0645Email: wjones@sa.gadens.com.auJames MarshTel: +61 (8) 8233 0662Email: jmarsh@sa.gadens.com.auKaren ThomasTel: +61 (8) 8233 0639Email: kthomas@sa.gadens.com.auActivities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments andre-documentation.Gadens LawyersLevel 25, Bourke Place, 600 Bourke Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9252 2555Fax: +61 (3) 9252 2500Email: info@vic.gadens.com.auWebsite: www.gadens.com.auContactsDavid ReichenbergTel: +61 (3) 9252 2581Email: dreichenberg@vic.gadens.com.auRob HintonTel: +61 (3) 9252 2531Email: rhinton@vic.gadens.com.auHoward ChaitTel: +61 (3) 9252 2596Email: hchait@vic.gadens.com.auActivities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments andre-documentation.Gadens LawyersLevel 7, 150 St Georges Terrace,Perth WA 6000, Australia.Tel: +61 (8) 9323 0999Fax: +61 (8) 9323 0900Email: info@wa.gadens.com.auWebsite: www.gadens.com.auContactsLee ChristensenEmail: lchristensen@wa.gadens.com.auJames ScovellEmail: jscovell@wagadens.com.auActivities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments andre-documentation.Gadens LawyersLevel 25, 240 Queen Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3231 1666Fax: +61 (7) 3229 5850Email: info@qld.gadens.com.auWebsite: www.gadens.com.auPartnerDan PennicottTel: +61 (7) 3114 0102Email: dpennicott@qld.gadens.com.auContactMatthew BroderickTel: +61 (7) 3114 0106Email: mbroderick@qld.gadens.com.auActivities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments andre-documentation.Grant ThorntonLevel 2, 215 Spring Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 8663 6000Fax: +61 (3) 8663 6333Email: greg.keith@au.gt.comWebsite: www.grantthornton.com.auPartnersGreg KeithAndrew HewittNick MellosMatt ByrnesActivities: Specialising in both corporateand personal insolvency, Grant ThorntonMelbourne can assist with formalappointments or workout scenarios.Henry Davis York44 Martin Place, Sydney NSW 2000, Australia.Tel: +61 (2) 9947 6000Fax: +61 (2) 9947 6999Email: hdy@hdy.com.auWebsite: www.hdy.com.auManaging PartnerSharon CookTel: +61 (2) 9947 65<strong>13</strong>Email: sharon_cook@hdy.com.auPartnerRoger DobsonTel: +61 (2) 9947 6382Email: roger_dobson@hdy.com.auActivities: Henry Davis York, has a leadingadvisory role in Australia’s major insolvencyand restructuring deals.Henry Davis YorkLevel 19, 324 Queen Street,Brisbane QLD 4000, Australia.Tel:+ 61 (7) 3087 5000Fax: + 61 (7) 3087 5099Website: www.hdy.com.auPartnerJohn EvansTel: +61 (7) 3087 5001Email: john_evans@hdy.com.auContactLeonard McCarthyTel: +61 (7) 2199 3087 5002Email: leonard_mccarthy@hdy.com.auActivities: Specialists in restructuring,insolvency and banking disputes for theQueensland market.Johnson Winter & SlatteryLevel 10, 211 Victoria Square,Adelaide SA 5000, Australia.Tel: +61 (8) 8239 7111Fax: +61 (8) 8239 7100Website: www.jws.com.auPartnerDavid ProudmanEmail: david.proudman@jws.com.auActivities: An insolvency practicespecialising in workouts, recovery andreconstructions and acting for secured andsignificant unsecured creditors and insolvencypractitioners.Johnson Winter & SlatteryLevel 25, 20 Bond Street, Sydney NSW 2000,Australia.Tel: +61 (2) 8274 9555Fax: +61 (2) 8274 9500Website: www.jws.com.auPartnersDavid ProudmanTel: +61 (8) 8239 7118Email: david.proudman@jws.com.auChris ConnorTel: +61 (3) 8611 <strong>13</strong>09Email: chris.conor@jws.com.auActivities: An insolvency practicespecialising in workouts, recovery andreconstructions and acting for secured andsignificant unsecured creditors and insolvencypractitioners.King & Wood Mallesons - BrisbaneLevel 30, Waterfront Place, 1 Eagle Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3244 8000Fax: +61 (7) 3244 8999Email: bris@au.kwm.comPartner ContactPhilip PanTel: +61 (7) 3244 8081Email: philip.pan@au.kwm.comCommunications ManagerElle QuinnTel: +61 (2) 9296 3730Email: elle.quinn@au.kwm.comActivities: Multi-disciplinary legal teamadvises on all aspects of insolvency,reconstruction and workouts.King & Wood Mallesons -CanberraLevel 5, NICTA Building B, 7 London Circuit,Canberra ACT 2600, Australia.Tel: +61 (2) 6217 6000Fax: +61 (2) 6217 6999Email: can@au.kwm.comPartner ContactJohn TopferTel: +61 (2) 6217 6078Email: john.topfer@au.kwm.comCommunications ManagerElle QuinnTel: +61 (2) 9296 3730Email: elle.quinn@au.kwm.comActivities: Multi-disciplinary legal teamadvises on all aspects of insolvency,reconstruction and workouts.King & Wood Mallesons -MelbourneLevel 50, Bourke Place, 600 Bourke Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9643 4000Fax: +61 (3) 9643 5999Email: mel@au.kwm.comPartner ContactTony TroianiTel: +61 (3) 9643 4286Email: tony.troiani@au.kwm.comCommunications ManagerElle QuinnTel: +61 (2) 9296 3730Email: elle.quinn@au.kwm.comActivities: Multi-disciplinary legal teamadvises on all aspects of insolvency,reconstruction and workouts.King & Wood Mallesons - PerthLevel 10, Central Park, 152 St GeorgesTerrace, Perth WA 6000, Australia.Tel: +61 (8) 9269 7000Fax: +61 (8) 9269 7999Email: per@au.kwm.comPartner ContactJohn NaughtonTel: +61 (8) 9269 7100Email: john.naughton@au.kwm.comCommunications ManagerElle QuinnTel: +61 (2) 9296 3730Email: elle.quinn@au.kwm.comActivities: Multi-disciplinary legal teamadvises on all aspects of insolvency,reconstruction and workouts.King & Wood Mallesons - SydneyLevel 61, Governor Phillip Tower,1 Farrer Place, Sydney NSW 2000, Australia.Tel: +61 (2) 9296 2000Fax: +61 (2) 9296 3999Email: syd@au.kwm.comWebsite: www.kwm.comPartner ContactsLinda JohnsonTel: +61 (2) 9296 2202Email: linda.johnson@au.kwm.com194

Beau DeleuilTel: +61 (4) 0886 7043Email: beau.deleuil@au.kwm.comCommunications ManagerElle QuinnTel: +61 (2) 9296 3730Email: elle.quinn@au.kwm.comActivities: Multi-disciplinary legal teamadvises on all aspects of insolvency,reconstruction and workouts.KordaMenthaLevel 4, 70 Pirie Street, Adelaide SA 5000,Australia.Tel: +61 (8) 8212 6322Fax: +61 (8) 8212 2215Email: info@kordamentha.comWebsite: www.kordamentha.comPartnersStephen DuncanChris PowellPeter LanthoisKordaMenthaLevel 5, Chifley Tower, 2 Chifley Square,Sydney NSW 2000, Australia.Tel: +61 (2) 8257 3000Fax: +61 (2) 8257 3099Email: info@kordamentha.comWebsite: www.kordamentha.comPartnersDavid MerryweatherDavid WinterbottomMartin MaddenRichard BennisonJanna RobertsonScott KershawPaul MiramsNigel CarsonJohn Temple-ColeAndrew RossKordaMenthaLevel 24, 333 Collins Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 8623 3333Fax: +61 (3) 8623 3399Email: info@kordamentha.comWebsite: www.kordamentha.comPrincipalsMark KordaMark MenthaPartnersCraig ShepardBerrick WilsonLeanne ChesserHaydn LawAndrew MalarkeyOwain StoneTony O’CallaghanBryan WebsterActivities: Independent, tier oneprofessional services firm, specialising incorporate recovery, corporate advisory,forensic accounting and real estate services.KordaMenthaLevel 1, 150 Walker Street, Townsville,QLD 4810, Australia.Tel: +61 (7) 4724 5455Fax: +61 (7) 4724 5405Email: tsv.receprion@kordamentha.comWebsite: www.kordamentha.comPartnersBill BuckbyGavin NolanTony MiskiewiczKordaMenthaLevel 9, Corporate Centre One, 2 CorporateCourt, Bundall, Gold Coast, QLD 4217,Australia.Tel: +61 (7) 5574 <strong>13</strong>22Fax: +61 (7) 5574 1433Email: gc.reception@kordamentha.comWebsite: www.kordamentha.comPartnerDamian BenderKordaMenthaLevel 11, 37 St Georges Terrace,Perth WA 6000, Australia.Tel: +61 (8) 9220 9333Fax: +61 (8) 9220 9399Email: info@kordamentha.comWebsite: www.kordamentha.comPartnerCliff RockeKordaMentha22 Market Street, Brisbane QLD 4000,Australia.Tel: +61 (7) 3225 4900Fax: +61 (7) 3225 4999Email bne.reception@kordamentha.comWebsite: www.kordamentha.comPartnersJohn ParkGinette MullerDamian BenderRobert HutsonJohn ShanahanKelly TrenfieldJoanne DunnNorton Rose AustraliaLevel 18, Grosvenor Place, 225 GeorgeStreet, Sydney NSW 2000, Australia; MailingAddress: GPO Box 3872 Sydney NSW 2001,Australia.Tel: +61 (2) 9330 8000Fax: +61 (2) 9330 8111Website: www.nortonrose.comPartnersJohn HolmesEmail: john.holmes@nortonrose.comChris McLeodEmail: chris.mcleod@nortonrose.comSteven PalmerEmail: steven.palmer@nortonrose.comDavid PorterEmail: david.porter@nortonrose.comMitchell MathasEmail: mitchell.mathas@nortonrose.comPeter SchmidtEmail: peter.schmidt@nortonrose.comDamien ButlerEmail: damien.butler@nortonrose.comAndrew BruceEmail: andrew.bruce@nortonrose.comDavid GoldmanEmail: david.goldman@nortonrose.comActivities: Specialising in cross-borderinsolvency and restructurings. Extensiveexperience in the areas of financialinstitutions, energy, infrastructure andcommodities, transport and technology.PPB AdvisoryLevel 21, 181 William St, Melbourne,VIC 3000, Australia.Tel: +61 (3) 9269 4000Fax: +61 (3) 9269 4099Website: www.ppbadvisory.comCEOStephen PurcellPartnerIan CarsonEmail: icarson@ppbadvisory.comActivities: PPB Advisory is a leadingprofessional advisory firm specialising incorporate advisory, restructuring andturnarounds, forensics, and insolvencyservices. The firm employs over 300 people,including 35 partners, across Australia andNew Zealand.PPB AdvisoryLevel 3, 167 Eagle Street, Brisbane,QLD 4000, Australia.Tel: +61 (7) 3222 6800Fax: +61 (7) 3222 6899Website: www.ppbadvisory.comCEOStephen PurcellPartnerGrant SparksEmail: gsparks@ppbadvisory.comActivities: PPB Advisory is a leadingprofessional advisory firm specialising incorporate advisory, restructuring andturnarounds, forensics, and insolvencyservices. The firm employs over 300 people,including 35 partners, across Australia andNew Zealand.PPB AdvisoryLevel 46, MLC Centre, 19 Martin Place,Sydney NSW 2000, Australia.Tel: +61 (2) 8116 3000Fax: +61 (2) 8116 3111Website: www.ppbadvisory.comCEOStephen PurcellTel: +61 (2) 8116 3000Email: spurcell@ppbadvisory.comDirector of Strategy & Client ServicesBen PollackTel: +61 (2) 8116 3141Email: bpollack@ppbadvisory.comActivities: PPB Advisory is a leadingprofessional advisory firm specialising incorporate advisory, restructuring andturnarounds, forensics, and insolvencyservices. The firm employs over 300 people,including 35 partners, across Australia andNew Zealand.PPB AdvisoryLevel 21, 140 St Georges Terrace,Perth WA 6000, Australia.Tel: +61 (8) 9216 7600Fax: +61 (8) 9216 7699Website: www.ppbadvisory.comCEOStephen PurcellPartnerSimon TheobaldEmail: stheobald@ppbadvisory.comActivities: PPB Advisory is a leadingprofessional advisory firm specialising incorporate advisory, restructuring andturnarounds, forensics, and insolvencyservices. The firm employs over 300 people,including 35 partners, across Australia andNew Zealand.Sellers Muldoon Benton Pty LtdLevel 3, 90 William Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9600 2100Fax: +61 (3) 9600 2400Email: clientservice@smbvic.com.auWebsite: www.smbvic.com.auPartnersKen SellersEmail: ksellers@briferrier.com.auMathew MuldoonEmail: mmuldoon@briferrier.com.auActivities: Bankruptcy and insolvency firm.Skadden, Arps, Slate, Meagher &FlomLevel <strong>13</strong>, <strong>13</strong>1 Macquarie Street,Sydney NSW 2000, Australia.Tel: +61 (2) 9253 6000Fax: +61 (2) 9253 6044Website: www.skadden.comPartnerAdrian J.S. DeitzActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Standard & Poor’sLevel 27, 259 George Street,Sydney NSW 2000, Australia.Tel: +61 (2) 9255 9888Fax: +61 (2) 9255 9880195

Standard & Poor’sLevel 45, 120 Collins Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9631 2000Fax: +61 (3) 9650 8106Taylor WoodingsLevel 15, 50 Pitt Street, Sydney NSW 2000,Australia.Tel: +61 (2) 8247 8000Fax: +61 (2) 8247 8099Email: info@twcs.com.auWebsite: www.taylorwoodings.com.auPartnersQuentin OldeMatt AdamsActivities: Chartered accounting andcorporate services firm specialising incorporate insolvency and advisoryassignments, with offices in Sydney, Perth,Melbourne and Brisbane.Taylor WoodingsLevel 6, 30 The Esplanade, Perth WA 6000,Australia.Tel: +61 (8) 9321 8533Fax: +61 (8) 9321 8544Email: info@twcs.com.auWebsite: www.taylorwoodings.com.auPartnersMichael RyanIan FrancisMark EnglebertActivities: Chartered accounting andcorporate services firm specialising incorporate insolvency and advisoryassignments, with offices in Sydney, Perth,Melbourne and Brisbane.Taylor WoodingsLevel 19, 307 Queen Street,Brisbane QLD 4000, Australia.Tel: +61 (7) 3041 2900Fax: +61 (7) 3041 2999Email: info@twcs.com.auWebsite: www.taylorwoodings.com.auPartnersStefan DopkingMichael RyanActivities: Chartered accounting andcorporate services firm specialising incorporate insolvency and advisoryassignments, with offices in Sydney, Perth,Melbourne and Brisbane.Taylor WoodingsLevel 15, 600 Bourke Street,Melbourne VIC 3000, Australia.Tel: +61 (3) 9604 0600Fax: +61 (3) 9604 0699Email: info@twcs.com.auWebsite: www.taylorwoodings.com.auPartnersRoss BlakeleyAndrew SchwarzActivities: Chartered accounting andcorporate services firm specialising incorporate insolvency and advisoryassignments, with offices in Sydney, Perth,Melbourne and Brisbane.AUSTRIADeloitteRenngasse 1/Freyung, A-1010 Vienna, Austria.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesAlbert HannackTel: +43 (1) 53700 2900Email: ahannak@deloitte.atActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and business reviews.Dorda Brugger JordisDr. Karl Lueger-Ring 10, A-1010 Vienna, Austria.Tel: +43 (1) 53347 9542/9528Fax: +43 (1) 53347 955042Website: www.dbj.atPartnersAndreas ZahradnikEmail: andreas.zahradnik@dbj.atTibor VargaEmail: tibor.varga@dbj.atActivities: Advises international anddomestic clients in all matters regardinginsolvency law, loan restructuring andenforcement.Graf & Pitkowitz, RechtsanwälteGmbH, Attorneys at LawStadiongasse 2, A-1010 Vienna, Austria.Tel: +43 (1) 40117 0Fax: +43 (1) 40117 40Email: office@gpp.atWebsite: www.gpp.atHead, <strong>Insolvency</strong> & <strong>Restructuring</strong>Dr. Alexander Isola, MCJTel: +43 (3) 16833 7770Email: isola@gpp.atActivities: <strong>Insolvency</strong> law, banking,accountant’s liability, loan collateralisation,commercial law, corporate restructuring andcorporate law.Hauser Partners RechtsanwälteGmbH Attorneys at Law P.C.Seilerstatte 18-20, A-1010 Vienna, Austria.Tel: +43 (1) 512 2900-14Fax: +43 (1) 512 2900 30Email: hauser@hauserpartners.comWebsite: www.hauserpartners.comManaging PartnerWulf Gordian HauserContactMag. Peter BlaschkeActivities: Using bankruptcy as a tool tomake take-overs possible.Preslmayr Attorneys at LawDr Karl Lueger-Ring 12, A-1010 Vienna,Austria.Tel: +43 (1) 533 1695Fax: +43 (1) 535 5686Email: office@preslmayr.atWebsite: www.preslmayr.atPartnersDr. Florian GehmacherDr. Matthias SchmidtActivities: <strong>Insolvency</strong>, restructuring andcounselling to main creditors and courtappointedadministrators in major insolvencyproceedings.Roland Berger StrategyConsultants GmbHFreyung 3/2/10, A-1010 Vienna, Austria.Tel: +43 (1) 53602 0Fax: +43 (1) 53602 600Website: www.rolandberger.comPartnerRupert PetryTel: +43 (1) 53602 100Email: rupert_petry@at.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Saxinger Chalupsky & PartnersEdisonstraße 1, A-4600 Wels, AustriaTel: +43 (7242) 65290Fax: +43 (7242) 65290 333Website: www.scwp.comContactDr. Ernst ChalupskyEmail: e.chalupsky@scwp.atSchulyok Unger & PartnerRechtsanwälte OGMariahilfer Straße 50, A-1070 Wien, Austria.Tel: +43 (1) 523 6200Fax: +43 (1) 526 7274Website: www.sup.atPartnersDr. Arno MaschkeEmail: maschke@sup.atDr. Georg UngerEmail: unger@sup.atActivities: Corporate restructuring, extrajudicialsettlements and handling ofbankruptcy proceedings.Skadden, Arps, Slate, Meagher &Flom (Europe) LLPSchwarzenbergplatz 6, A-1030 Vienna, Austria.Tel: +43 (1) 7107 7300Fax: +43 (1) 7107 7303Website: www.skadden.comContactRainer K. WachterActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Ullmann - Geiler und PartnersMaria Theresien Strasse 17-19,A-6020 Innsbruck, Austria.Tel: +43 (512) 58276 0Fax: +43 (512) 58276 06Email: office@ullmann-geiler.atWebsite: www.ullmann-geiler.atContactDr. Stefan GeilerWolf Theiss RechtsanwälteSchubertring 6, A-1010 Vienna, Austria.Tel: +43 (1) 51510Fax: +43 (1) 51510 25Email: wien@wolftheiss.comWebsite: www.wolftheiss.comDirectorsBettina KnötzlEva SpiegelActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.BAHAMASDeloitteDehands House, 2nd Terrace West, CollinsAvenue, PO Box N-7120, Nassau, Bahamas.Tel: +1 (242) 302 4800Fax: +1 (242) 322 3101Website: www.deloitte.com.bsHead of <strong>Restructuring</strong> ServicesAnthony S. KikivarakisTel: +1 (242) 302 4804Email: akikivarakis@deloitte.comSenior ManagerTiphaney C. RussellEmail: tirussell@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Ernst & Young LtdPO Box N-3231, Nassau, Bahamas.Tel: +1 (242) 502 6000Fax: +1 (242) 502 6090Email: ernst.young@bs.ey.comWebsite: www.ey.com/bs196

Senior Manager, <strong>Restructuring</strong>:Daniel WoodhouseTel: +1 (242) 502 6046Email: daniel.woodhouse@bs.ey.comActivities: Provides restructuring advice, actas office-holders in relation to financiallydistressed, litigation support, shareholderdisputes and voluntary liquidation situations.KRyS <strong>Global</strong>Caves Professional Centre, Caves Village,Blake Road and West Bay Street,PO Box SP-64064 Nassau, Bahamas.Tel: +1 (242) 327 1447Fax: +1 (242) 327 3288Email: admin@krys-global.comWebsite: www.krys-global.comManaging DirectorEdmund RahmingEmail: edmund.rahming@krys-global.comActivities: KRyS <strong>Global</strong> has over 40professionals who specialise in providingcorporate recovery, fraud investigation andforensic accounting, money launderinginvestigations, business advisory services,consulting and regulatory complianceservices.PricewaterhouseCoopersBahamasProvidence House, East Hill Street,PO Box N-3910, Nassau, Bahamas.Tel: +1 (242) 302 5300Fax: +1 (242) 302 5350Email: pwcbs@bs.pwc.comWebsite: www.pwc.comPartner/Co-BRS PartnerClifford A. JohnsonTel: +1 (242) 302 5307Email: clifford.a.johnson@bs.pwc.comPartner/Co-BRS PartnerKevin D. SeymourTel: +1 (242) 352 8471Email: kevin.d.seymour@bs.pwc.comActivities: The Bahamas firm’s BusinessRecovery Services (‘BRS’) departmentprovides receivership and liquidationservices, both voluntary and involuntary, andis innovative in exploring recovery options.BAHRAINRoland Berger StrategyConsultants Middle East W.L.L.Almoayyed Tower, 21st Floor,PO Box 18259, Manama, Bahrain.Tel: +973 (17) 567 950Website: www.rolandberger.comPartnersMichael WetteTel: +973 (17) 567 951Email: michael_wette@ch.rolandberger.comDr. Tobias PlateTel. +973 (17) 567 976Email: tobias_plate@ch.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.SNR DentonBahrain Financial Harbour, West Tower,15th Floor Office 1501 - 1504, Building 1459,Road 4626, Block 346, PO Box 5852,Manama, Kingdom of Bahrain.Tel: +973 (1) 710 2595Fax: +973 (7) 709 0222Website: www.snrdenton.comPartnerLeigh HallTel: +974 4459 8962/+965 2246 1840Mobile: +974 3021 1567Email: leigh.hall@snrdenton.comBELGIUMDeloitteBerkenlaan 8B, B-1831 Diegem, Belgium.Tel: +32 (2) 600 6000Fax: +32 (2) 600 6001Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesHilde WittemansTel: +32 (2) 600 6230Email: hwittemans@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.GarriguesAvenue D’Auderghem, 22-28,B-1040 Brussels, Belgium.Tel: +32 (2) 545 3700Fax: +32 (2) 545 3799Website: www.garrigues.comHead of Brussels OfficeJosé Luis BuendíaTel: +32 (2) 545 3700Email: jose.luis.buendia@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Hogan Lovells International LLPAvenue Louise 523, B-1050 Brussels, Belgium.Tel: +32 (2) 505 0911Fax: +32 (2) 505 0996Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comLiedekerke Wolters WaelbroeckKirkpatrickBoulevard de l’Empereur 3, B-1000 Brussels,Belgium.Tel: +32 (2) 551 1515Fax: +32 (2) 551 1414Website: www.liedekerke.comManaging PartnerJan Vincent LindemansTel: +32 (2) 551 1518Email: jv.lindemans@liedekerke.comSenior PartnerPhilippe MalherbeTel: +32 (2) 551 1630Email: p.malherbe@liedekerke.comActivities: Advice and litigation oninsolvency, threatened insolvency, credit anddebt restructurings, rights of creditors,bankruptcy and judicial composition.McKenna Long & Aldridge LLPAvenue de Tervueren 2, B-1040 Brussels,Belgium.Tel: +32 (2) 278 1211Fax: +32 (2) 278 1200Website: www.mckennalong.comPartnerNora WoutersTel: +32 (2) 278 1215Email: nwouters@mckennalong.comActivities: Specialises in cross-bordercorporate and finance transactions, andadvises on the restructuring of internationaltransactions, corporate reorganisations andmergers and acquisitions of regulated andnon-regulated companies.Roland Berger StrategyConsultants S.A./N.V.Vorstlaan 100, Boulevard du Souverain,B-1170 Brussels, Belgium.Tel: +32 (2) 661 0314Fax: +32 (2) 661 0311Website: www.rolandberger.comPartnerEric BaartTel: +32 (2) 661 0325Email: eric_baart@be.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.SJ Berwin LLPSquare de Meeûs 1, B-1000 Brussels, Belgium.Tel: +32 (2) 511 5340Fax: +32 (2) 511 5917Email: brussels@sjberwin.comSkadden, Arps, Slate, Meagher &Flom LLP & Affiliates523 avenue Louise, Box 30, B-1050 Brussels,Belgium.Tel: +32 (2) 639 0300Fax: +32 (2) 639 0339Website: www.skadden.comContactFrederic DepoortereActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.SNR Denton LLPAvenue Louise 65, bte 11, B-1050 Brussels,Belgium.Website: www.snrdenton.comTaylor WessingTrône House, 4 Rue du Trône,B-1000 Brussels, Belgium.Tel: +32 (2) 289 6060Fax: +32 (2) 289 6070PartnerBart De MoorTel: +32 (2) 289 6042Email: b.demoor@taylorwessing.comActivities: Bankruptcy, liquidation,administration and litigation.White & Case LLP, Avocats-Advocaten62 rue de la Loi Wetstraat 62,B-1040 Brussels, Belgium.Tel: +32 (2) 219 1620Fax: +32 (2) 219 1626Website: www.whitecase.comPartnerThierry BoslyTel: +32 (2) 239 2509Email: tbosly@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.197

BERMUDAAppleby (Bermuda) LimitedCanon’s Court, 22 Victoria Street, PO BoxHM 1179, Hamilton HM EX, Bermuda.Tel: +1 (441) 295 2244Fax: +1 (441) 292 8666ContactKiernan BellEmail: kbell@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.Attride-Stirling & WolonieckiCrawford House, 50 Cedar Avenue,Hamilton, Bermuda.Tel: +1 (441) 295 6500Fax: +1 (441) 295 6566Email: info@aswlaw.comWebsite: www.aswlaw.comHead of <strong>Insolvency</strong> & Corporate RescueKehinde A.L. GeorgeSenior PartnerRod S. Attride-StirlingActivities: Attorneys to various parties(including liquidators and creditors) innumerous major cross-border insolvenciesand restructurings.Ernst & Young Ltd3 Bermudiana Road,Hamilton, HM11, Bermuda.Tel: +1 (441) 295 7000Fax: +1 (441) 295 5193Email: ernst.young@bm.ey.comWebsite: www.ey.com/bmPartner:Wanda MelloTel: +1 (441) 294 5376Email: wanda.mello@bm.ey.comSenior Manager, <strong>Restructuring</strong>:Richard HazelTel: +1 (441) 294 5639Email: richard.hazel@bm.ey.comActivities: Provides restructuring advice, actas office-holders in relation to financiallydistressed, litigation support, shareholderdisputes and voluntary liquidation situations.KRyS <strong>Global</strong>Chancery Hall, 1st Floor,52 Reid Street, Hamilton HM 12,PO Box 671, HM CX, Bermuda.Tel: +1 (441) 292 0818Fax: +1 (441) 292 0826Email: admin@krys-global.comWebsite: www.krys-global.comManaging DirectorPatrick McPheeEmail: patrick.mcphee@krys-global.comActivities: KRyS <strong>Global</strong> has over 40professionals who specialise in providingcorporate recovery, fraud investigation andforensic accounting, money launderinginvestigations, business advisory services,consulting and regulatory complianceservices.BOSNIA &HERZEGOVINAWolf TheissZmaja od Bosne 7, BiH-71 000 Sarajevo,Bosnia & Herzegovina.Tel: +387 (33) 853 444Fax: +387 (33) 853 425Email: sarajevo@wolftheiss.comWebsite: www.wolftheiss.comDirectorMiroslav StojanovicActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.BRAZILChadbourne & ParkeAv. Pres. Juscelino Kubitschek, 1726, 16°andar,São Paulo, SP 04543-000, Brazil.Tel: +55 (11) 3372 0000Fax: +55 (11) 3372 0009Managing PartnerCharles JohnsonEmail: cjohnson@chadbourne.comDeloitteRua Alexandre Dumas 1981,São Paulo 04717-906, Brazil.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesLuiz VascoTel: +55 (11) 5186 1777Email: luisvasco@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Felsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegaisAvenida Almirante Barroso No. 52, 22° andarCentro, Rio de Janeiro 20031-000 RJ, Brazil.Tel: +55 (21) 2156 7500Fax: +55 (21) 2220 3182Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault PintoAntonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Felsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegaisSCN, Qd.5, BIA, Sala 1217, Torre Norte,Brasilia, DF, Brazil.Tel: +55 (61) 3033 3390Fax: +55 (61) 3033 2855Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault PintoAntonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Felsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegaisAvenida Paulista No. 1294, 2nd Floor,erqueira César, São Paulo 0<strong>13</strong>10-915 SP,Brazil.Tel: +55 (11) 3141 9100Fax: +55 (11) 3141 9150Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault PintoAntonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Felsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegaisAv. José de Souza Campos, 900 Sl. 65 Cond.Trade Tower, <strong>13</strong>092-110 Campinas, Brazil.Tel: +55 (19) 3512 5600Fax: +55 (19) 3512 5605Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault Pinto198

Antonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Gibson, Dunn & Crutcher LLPRua Funchal, 418, 35°andar, São Paulo,SP 04551-060, Brazil.Tel: +55 (11) 3521 7160Fax: +55 (11) 3521 7070Website: www.gibsondunn.comCo-Chairs, Business <strong>Restructuring</strong> &Reorganisation Practice GroupCraig H. MilletMichael A. RosenthalDavid M. FeldmanActivities: Represent debtors’ in bankruptcycases and out-of-court restructurings,creditors’ committees and individualcreditors, bondholders, lenders, potentialacquirers, insurers and trustees.KPMG <strong>Restructuring</strong> andAdministration Services LTDAAv. Nove de Julho, 5109 7°andar,01407-905 São Paulo, SP, Brazil.Fax: +55 (11) 3245 8310PartnerSalvatore MilaneseTel: +55 (11) 3245 8312Email: smilanese@kpmg.com.brDirectorsAndre SchwartzmanTel: +55 (11) 3245 8258Osana MendonçaTel: +55 (11) 3245 8338Mattos Fillho, Veiga Filho, MarreyJr. e Quiroga AdvogadosAlameda Joaquim Eugênio de Lima, 447,São Paulo, CEP 01403-001, Brazil.Tel: +55 (11) 3147 7600Fax: +55 (11) 3147 7770Email: mattosfilho@mattosfilho.com.brWebsite: www.mattosfilho.com.brPartnerEduardo Secchi MunhozTel: +55 (11) 3147 7758Email: emunhoz@mattosfilho.com.brSenior AssociateRaphael Nehin CorrêaTel: +55 (11) 3147 2861Email: raphael@mattosfilho.com.brActivities: Representation of creditors anddebtors in debt restructuring, reorganisationand liquidation proceedings, and of investorsin the acquisition of assets and/or equity ininsolvency proceedings.PricewaterhouseCoopersCorporate Finance & RecoveryLtdaAvenida Francisco Matarazzo, 1400. TorreTorino, São Paulo CEP 05001-903, SP, Brazil.Tel: +55 (11) 3674 2000Fax: +55 (11) 3674 2022Website: www.pwc.com.brPartnersAntonio ToroTel: +55 (11) 3674 3666Email: antonio.toro@br.pwc.comRogerio GolloTel: +55 (11) 3674 2333Email: rogerio.gollo@br.pwc.comActivities: Financial advisor services onfinancial restructurings, and non-performingcredits portfolio trading in Brazil.Roland Berger StrategyConsultants Ltda.Av. Presidente Juscelino Kubitschek 510,São Paulo, SP 04543-906, Brazil.Tel: +55 (11) 3046 7111Fax: +55 (11) 3046 7222Website: www.rolandberger.comPartnerThomas KunzeEmail: thomas_kunze@br.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.RZM AdvogadosRua São Tomé, 86, Conjunto 111, VilaOlimpia, São Paulo 04551-080, Brazil.Tel: +55 (11) 3055 2008Fax: +55 (11) 3848 9449Email: rzmadvogados@rzmadvogados.com.brWebsite: www.rzmadvogados.com.brPartnersFábio Pascual ZuanonEmail: zuanon@rzmadvogados.com.brBruno GutierresEmail: gutierres@rzmadvogados.comActivities: Represents prominent financialinstitutions as creditor, on relevant debtrestructuring transactions and insolvency andcredit recovery proceedings.Skadden, Arps, Slate, Meagher &Flom LLP & AffiliatesAvenida Brigadeiro Faria Lima, 3311-7° andar,04538-<strong>13</strong>3, São Paulo, SP, Brazil.Tel: +55 (11) 3708 1820Fax: +55 (11) 3708 1845Website: www.skadden.comPartnerRichard S. Aldrich, JrActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Squire Sanders LtdaPraia de Botafogo, 501 - 1° andar - parte -Torre Pão de Açucar, Centro EmpresarialMourisco, Rio de Janeiro - Cep: 22.250-040,Brazil.Tel: +55 (21) 2586 6261Fax: +55 (21) 2586 6001Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong> ContactTimothy J. SmithActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’sAv. Brigadeiro Faria Lima, 201, 18th Floor,Pinheiros, São Paulo CEP 05426-100, Brazil.Tel: +55 (11) 3039 9702Fax: +55 (11) 3039 9701White & Case LLPAv. Brig. Faria Lima, 2.277 4th Floor,São Paulo, SP 01452-0000, Brazil.Tel: +55 (11) 3147 5600Fax: +55 (11) 3147 5611Website: www.whitecase.comPartnersDonald E. BakerTel: +55 (11) 3147 5601Email: dbaker@whitecase.comFernando de la HozTel: +55 (11) 3147 5608Email: fdelahoz@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.BRITISH VIRGINISLANDSApplebyJayla Place, Wickhams Cay 1, PO Box 3190,Road Town, Tortola, British Virgin Islands.Tel: +1 (284) 494 4742Fax: +1 (284) 494 7279Email: info@applebyglobal.comContactEliot SimpsonActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.DeloitteJames Frett Building, Wickham’s Cay 1,Road Town, Tortola, British Virgin Islands.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesKerry GraziolaTel: +1 (284) 494 2868 ext. 2010Email: kgraziola@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Ernst & Young Ltd3rd Floor, Jayla Place, Wickhams Cay 1,Road Town, VG-1110, British Virgin Islands.Tel: +1 (284) 852 5450Email: ernst.young@vg.ey.comWebsite: www.ey.com/vgSenior Manager, <strong>Restructuring</strong>: Scott CloutTel: +1 (284) 852 5457Email: scott.clout@vg.ey.comActivities: Provides restructuring advice, actas office-holders in relation to financiallydistressed, litigation support, shareholderdisputes and voluntary liquidation situations.KRyS <strong>Global</strong>Commerce House, 2nd Floor,181 Main Street, Road Town, PO Box 930,Tortola VG-1110, British Virgin Islands.Tel: +1 (284) 494 1768Fax: +1 (284) 494 7169Email: admin@krys-global.comWebsite: www.krys-global.com199

Chief Executive OfficerKenneth KrysTel: +1 (345) 815 8401/ +1 (284) 852 1763Email: kenneth.krys@krys-global.comManaging DirectorJohn GreenwoodTel: +1 (284) 852 1750Email: john.greenwood@krys-global.comActivities: KRyS <strong>Global</strong> has over 40professionals who specialise in providingcorporate recovery, fraud investigation andforensic accounting, money launderinginvestigations, business advisory services,consulting and regulatory complianceservices.Walkers171 Main Street, PO Box 72, Road Town,Tortola VG-1110, British Virgin Islands.Tel: +1 (284) 494 2204Fax: +1 (284) 494 5535Email: info@walkersglobal.comWebsite: www.walkersglobal.comPartnersJack HusbandsSandie CorbettActivities: Highly regarded and integratedglobal team delivering informed legal supportacross the spectrum of restructuringtransactions, whether contentious or out-ofcourt.BULGARIAStudio Legale Sutti94 “Hristo Botev” Boulevard, BG-1202 Sofia,Bulgaria.Tel: +359 (2) 831 9586Fax: +359 (2) 831 9584Email: maildesk@sutti.comWebsite: www.sutti.comResident PartnerTzvetelina DimitrovaActivities: International corporate recovery,advising multi-national reorganisations,corporate restructuring, creditors’ rights andcompliance issues.Wolf TheissRainbow Centre, 29 Atanas Dukov Street,Sofia BG-1407, Bulgaria.Tel: +359 (2) 861 3700Fax: +359 (2) 807 0321Email: sofia@wolftheiss.comWebsite: www.wolftheiss.comDirectorRichard CleggActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.CANADAAlexander Holburn Beaudin &Lang LLP2700-700 West Georgia Street, Vancouver,BC V7Y 1B8, Canada.Tel: +1 (604) 484 1700Fax: +1 (604) 484 9700Email: info@ahbl.caWebsite: www.ahbl.caAssociate CounselSharon UrquhartTel: +1 (604) 484 1757Email: surquhart@ahbl.comManaging PartnerDavid GarnerTel: +1 (604) 484 1708Email: dgarner@ahbl.caActivities: Represent the interests of theirclients in all aspects of the insolvency andrestructuring process.Cassels Brock & Blackwell LLP2100 Scotia Plaza, 40 King Street West,Toronto, Ontario M5H 3C2, Canada.Tel: +1 (416) 869 5300Fax: +1 (416) 360 8877Website: www.casselsbrock.comPartnersAlison ManzerTel: +1 (416) 869 5469Fax: +1 (416) 350 6938Email: amanzer@casselsbrock.comDeborah GrieveTel: +1 (416) 860 5219Fax: +1 (416) 350 6923Email: dgrieve@casselsbrock.comActivities: Highly regarded andinternationally recognised legal advisers on allaspects of complex corporatereorganisations and restructurings, creditors’remedies and commercial litigation.Davis LLP1501, McGill College, Suite 1400, Montreal,Québec H3A 3M8, Canada.Tel: +1 (514) 392 1991Fax: +1 (514) 392 1999Website: www.davis.caPartnerHubert SibreTel: +1 (514) 392 8447Email: hsibre@davis.caActivities: Lexpert 2010 “Litigator toWatch” Lexpert 2009 “Rising Star”. 2008Arista Young Professional of the Year.Frequent speaker in Canada and UnitedStates.DeloitteSiege social de Quebec 1, Place Ville-Marie,Bureau 3000, Montreal H3B 4T9, Canada.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesPierre LaporteTel: +1 (514) 393 7372Email: pilaporte@deloitte.caActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Fasken Martineau DuMoulin LLPThe Stock Exchange Tower, PO Box 242,Suite 3700, 800 Victoria Square, Montreal,Québec H4Z 1E9, Canada.Tel: +1 (514) 397 7400Toll Free: +1 800 361 6266Fax: +1 (514) 397 7600Email: montreal@fasken.comFirm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.comPartner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comPartnerAlain Riendeau (Montreal)Tel: +1 (514) 397 7678Email: ariendeau@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Fasken Martineau DuMoulin LLP3400 First Canadian Centre, 350-7th AvenueSW, Calgary, Alberta, T2P 3N9, Canada.Tel: +1 (403) 261 5350Toll Free: +1 (877) 336 5350Fax: +1 (403) 261 5351Email: calgary@fasken.comWebsite: www.fasken.comFirm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.comPartner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comPartnerFrank Dearlove (Calgary)Tel: +1 (403) 261 6163Email: fdearlove@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Fasken Martineau DuMoulin LLPSuite 800, 140 Grande Allée Est,Québec City, Québec G1R 5M8, Canada.Tel: +1 (418) 640 2000Toll Free: +1 800 463 2827Fax: +1 (418) 647 2455Email: quebec@fasken.comWebsite: www.fasken.comFirm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.comPartner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Fasken Martineau DuMoulin LLP333 Bay Street, Suite 2400,Bay Adelaide Centre, Box 20, Toronto,ON M5H 2T6, Canada.Tel: +1 (416) 366 8381Toll Free: +1 800 268 8424Fax: +1 (416) 364 78<strong>13</strong>Email: toronto@fasken.comFirm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.comPartner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comPartnerEdmond Lamek (Toronto)Tel: +1 (416) 865 4506Email: elamek@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Fasken Martineau DuMoulin LLP2900-550 Burrard Street, Vancouver,BC, V6C O43, Canada.Tel: +1 (604) 631 3<strong>13</strong>1Fax: +1 (604) 631 3232Email: vancouver@fasken.comWebsite: www.fasken.comFirm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.com200

Partner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Fishman Flanz Meland Paquin,SENCRL/LLPSuite 4100, 1250 René-Lévesque BoulevardWest, Montreal, Québec H3B 4W8, Canada.Tel: +1 (514) 932 4100Fax: +1 (514) 932 4170Email: afishman@ffmp.caWebsite: www.ffmp.caSenior PartnerAvram FishmanContactMark MelandActivities: Active in virtually all majorCanadian restructurings and trans-borderrestructurings, reorganisations andbankruptcies. Represents financial institutions,major stakeholders and debtors.Fraser Milner Casgrain LLP1 Place Ville Marie, Suite 3900, Montréal,Québec H3B 4M7, Canada.Tel: +1 (514) 878 8800Fax: +1 (514) 866 2241Website: www.fmc-law.comPartnersRoger P. Simard (Montréal)Tel: +1 (514) 878 5834Email: roger.simard@fmc-law.comR. Shayne Kukulowicz (Toronto)David W. Mann (Calagary)Alex L. MacFarlane (Toronto)John R. Sandrelli (Vancouver)Ray C. Rutman (Edmonton)Philip Rimer (Ottawa)Activities: FMC’s 48insolvency/restructuring lawyers offer fullyintegrated, Canada-wide representation andexperience with most major Canadianinsolvencies as well as cross-border issues.Fraser Milner Casgrain LLP2900 Manulife Place, 10180-101 Street,Edmonton, Alberta T5J 3V5, Canada.Tel: +1 (780) 423 7100Fax: +1 (780) 423 7276Website: www.fmc-law.comPartnersRay C. Rutman (Edmonton)Tel: +1 (780) 423 7312Email: ray.rutman@fmc-law.comR. Shayne Kukulowicz (Toronto)David W. Mann (Calgary)Alex L. MacFarlane (Toronto)John R. Sandrelli (Vancouver)Philip Rimer (Ottawa)Roger P. Simard (Montréal)Activities: FMC’s 48 insolvency/restructuring lawyers offer fully integrated,Canada-wide representation and experiencewith most major Canadian insolvencies aswell as cross-border issues.Fraser Milner Casgrain LLP20th Floor, 250 West Howe Street,Vancouver, BC V6C 3R8, Canada.Tel: +1 (604) 687 4460Fax: +1 (604) 683 5214Website: www.fmc-law.comPartnersJohn R. Sandrelli (Vancouver)Tel: +1 (604) 443 7<strong>13</strong>2Email: john.sandrelli@fmc-law.comR. Shayne Kukulowicz (Toronto)David W. Mann (Calgary)Alex L. MacFarlane (Toronto)Ray C. Rutman (Edmonton)Philip Rimer (Ottawa)Roger P. Simard (Montréal)Activities: FMC’s 48insolvency/restructuring lawyers offer fullyintegrated, Canada-wide representation andexperience with most major Canadianinsolvencies as well as cross-border issues.Fraser Milner Casgrain LLPSuite 400, 77 King Street West,Toronto-Dominion Centre, Toronto,Ontario M5X 0A1, Canada.Tel: +1 (416) 863 4511Fax: +1 (416) 863 4592PartnersAlex L. MacFarlane (Toronto)Tel: +1 (416) 863 4582Email: alex.macfarlane@fmc-law.comR. Shayne Kukulowicz (Toronto)David. W. Mann (Calgary)John R. Sandrelli (Vancouver)Ray C. Rutman (Edmonton)Philip Rimer (Ottawa)Roger P. Simard (Montréal)Activities: FMC’s 48insolvency/restructuring lawyers offer fullyintegrated, Canada-wide representation andexperience with most major Canadianinsolvencies as well as cross-border issues.Fraser Milner Casgrain LLP99 Bank Street, Suite 1420, Ottawa,Ontario K1P 1HA, Canada.Tel: +1 (6<strong>13</strong>) 783 9600Fax: +1 (6<strong>13</strong>) 783 9690Website: www.fmc-law.comPartnersPhilip Rimer (Ottawa)Tel: +1 (6<strong>13</strong>) 783 9634Email: philip.rimer@fmc-law.comR. Shayne Kukulowicz (Toronto)David W. Mann (Calgary)Alex L. MacFarlane (Toronto)John R. Sandrelli (Vancouver)Ray C. Rutman (Edmonton)Roger P. Simard (Montréal)Activities: FMC’s 48insolvency/restructuring lawyers offer fullyintegrated, Canada-wide representation andexperience with most major Canadianinsolvencies as well as cross-border issues.Fraser Milner Casgrain LLP15th Floor, Bankers Court, 850-2nd StreetS.W., Calgary, Alberta T2P 0R8, Canada.Tel: +1 (403) 268 7000Fax: +1 (403) 268 3100Website: www.fmc-law.comPartnersDavid W. Mann (Calgary)Tel: +1 (403) 268 7097Email: david.mann@fmc-law.comR. Shayne Kukulowicz (Toronto)Alex L. MacFarlane (Toronto)John R. Sandrelli (Vancouver)Ray C. Rutman (Edmonton)Philip Rimer (Ottawa)Roger P. Simard (Montréal)Activities: FMC’s 48insolvency/restructuring lawyers offer fullyintegrated, Canada-wide representation andexperience with most major Canadianinsolvencies as well as cross-border issues.Goodmans LLPSuite 3400, 333 Bay Street, Toronto,Ontario M5H 2S7, Canada.Tel: +1 (416) 979 2211Fax: +1 (416) 979 1234Email: info@goodmans.caWebsite: www.goodmans.caPartnerJay CarfagniniActivities: Expertise in restructuring,financing and corporate issues. Clientsinclude private and public corporations,Canadian and US financial institutions andinternational and national corporations.Grant Thornton Alger Inc.Suite 900, 833 - 4th Avenue SW, Calgary,AB T2P 3T5, Canada.Tel: +1 (403) 310 8888Fax: +1 (403) 260 2571Email: calgary@ca.gt.comWebsite: www.gt.alger.caPartnerBruce AlgerTel: +1 (403) 296 2970Email: bruce.alger@ca.gt.comActivities: Grant Thornton Alger Inc.specialises in corporate recovery andpersonal bankruptcy.McMillan LLPSuite 4400, 181 Bay Street, Toronto,Ontario M5J 2T3, Canada.Tel: +1 (416) 865 7000Fax: +1 (416) 865 7048Email: info@mcmillan.caWebsite: www.mcmillan.caChief Executive OfficerAndrew KentTel: +1 (416) 865 7160Email: andrew.kent@mcmillan.caPartnerMax MendelsohnTel: +1 (514) 987 5042Email: max.mendelsohn@mcmillan.caChief Operating OfficerMickey YaksichTel: +1 (416) 865 7097Email: mickey.yaksich@mcmillan.caActivities: Leading Canadian business lawfirm, committed to advancing its clients’interests through exemplary client serviceand thoughtful, pragmatic advice. Valuesdriven,the firm takes a dynamic andsophisticated approach to provide practicaland creative solutions.McMillan LLPSuite 2700, 1000 Sherbrooke Street West,Montréal, Québec H3A 3G4, Canada.Tel: +1 (514) 987 5000Fax: +1 (514) 987 12<strong>13</strong>Email: info@mcmillan.caWebsite: www.mcmillan.caChief Executive Officer & ManagingPartnerAndrew KentTel: +1 (416) 865 7160Email: andrew.kent@mcmillan.caPartnerMax MendelsohnTel: +1 (514) 987 5042Email: max.mendelsohn@mcmillan.caChief Operating OfficerMickey YaksichTel: +1 (416) 865 7097Email: mickey.yaksich@mcmillan.ca,Activities: Leading Canadian business lawfirm, committed to advancing its clients’interests through exemplary client serviceand thoughtful, pragmatic advice. Valuesdriven,the firm takes a dynamic andsophisticated approach to provide practicaland creative solutions.Norton Rose CanadaSuite 2500, 1 Place Ville Marie, Montreal,Quebec H3B 1RI, Canada.Tel: +1 (514) 847 4747Fax: +1 (514) 286 5474Website: www.nortonrose.comCo-Chairs of the GroupTony ReyesTel: +1 (416) 216 4825Email: tony.reyes@nortonrose.com201

Sylvain RigaudTel: +1 (514) 847 4702Email: sylvain.rigaud@nortonrose.comActivities: Involved in most of Canada’slargest and most complex restructurings andinsolvencies in the past decade.Norton Rose CanadaSuite 3800, PO Box 84, Royal Bank Plaza,South Tower, 200 Bay Street, Toronto,ON M5J 2Z4 Canada.Tel: +1 (416) 216 4000Fax: +1 (416) 216 3930Website: www.nortonrose.comCo-Chairs of the GroupTony ReyesTel: +1 (416) 216 4825Email: tony.reyes@nortonrose.comSylvain RigaudTel: +1 (514) 847 4702Email: sylvain.rigaud@nortonrose.comActivities: Cross-border restructuringsprimarily with the US and the UK, acting forboth debtors and creditors.Skadden, Arps, Slate, Meagher &Flom LLP & Affiliates222 Bay Street, Suite 1750, PO Box 258,Toronto, Ontario M5K 1J5, Canada.Tel: +1 (416) 777 4700Fax: +1 (416) 777 4747Website: www.skadden.comPartnerChristopher W. MorganActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Standard & Poor’s<strong>13</strong>0 King Street West, Suite 1100,Toronto ON M5X 1E5, Canada.Tel: +1 (416) 507 2500Fax: +1 (416) 507 2507ThorntonGroutFinnigan LLPSuite 3200, 100 Wellington Street West,Toronto ON M5K 1K7, Canada.Tel: +1 (416) 304 1616Fax: +1 (416) 304 <strong>13</strong><strong>13</strong>Website: www.tgf.caPartnersRobert ThorntonTel: +1 (416) 304 0560Email: rthornton@tgf.caD.J. MillerTel: +1 (416) 304 0559Email: djmiller@tgf.caActivities: A speciality boutique law firmwith an international and national practice inrestructuring and insolvency. Its reputationand expertise is reflected in its high profileretainers.CAYMANISLANDSAppleby (Cayman) Ltd.Clifton House, 75 Fort Street, PO Box 190,Grand Cayman KY1-1104, Cayman Islands.Tel: +1 (345) 949 4900Fax: +1 (345) 949 4901Email: cayman@applebyglobal.comWebsite: www.applebyglobal.comGroup Head - Litigation & <strong>Insolvency</strong>,PartnerAndrew BoltonTel: +1 (345) 814 2011Email: abolton@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.CampbellsPO Box 884, George Town, Grand Cayman,KYI-1103, Cayman Islands.Tel: +1 (345) 949 2648Fax: +1 (345) 949 86<strong>13</strong>Email: rmcdonough@campbells.com.kyWebsite: www.campbells.comPartnersJ. Ross McDonoughAlistair WaltersActivities: Advised local and internationalinsolvency professionals in many major multijurisdictionalinsolvency and restructuringmatters.DeloitteOne Capital Place, George Town,Grand Cayman, Lomas, Cayman Islands.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesStuart SybersmaTel: +1 (345) 814 3337Email: ssybersma@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Ernst & Young Ltd62 Forum Lane, Camana Bay, Box 510,Grand Cayman KY1-1106, Cayman Islands.Tel: +1 (345) 949 8444Fax: +1 (345) 949 8529Email: ernst.young@ky.ey.comWebsite: www.ey.com/kyExecutive Director, <strong>Restructuring</strong>:Rob McMahonTel: +1 (345) 814 9008Email: rob.mcmahon@ky.ey.comSenior Manager, <strong>Restructuring</strong>:Claire LoebellTel: +1 (345) 814 8922Email: claire.loebell@ky.ey.comActivities: Provides restructuring advice, actas office-holders in relation to financiallydistressed, litigation support, shareholderdisputes and voluntary liquidation situations.KRyS <strong>Global</strong>Governor’s Square, Building 6, 2nd Floor,23 Lime Tree Bay Avenue, PO Box 31237,Grand Cayman KY1-1205, Cayman Islands.Tel: +1 (345) 947 4700Fax: +1 (345) 946 6728Email: admin@krys-global.comWebsite: www.krys-global.comCEOKeneth KrysTel: +1 (345) 815 8401/ +1 (284) 852 1763Email: kenneth.krys@krys-global.comManaging DirectorMargot MacInnisEmail: margot.macinnis@krys-global.comActivities: KRyS <strong>Global</strong> has over 40professionals who specialise in providingcorporate recovery, fraud investigation andforensic accounting, money launderinginvestigations, business advisory services,consulting and regulatory complianceservices.Turner & RoulstoneStrathvale House, 90 North Church Street,George Town, Grand Cayman;Mailing Address: PO Box 2636,Grand Cayman KY1-1102, Cayman Islands.Tel: +1 (345) 943 5555Fax: +1 (345) 943 9999Email: info@tandr.kyWebsite: www.tandr.kyManaging PartnerAlan TurnerTel: +1 (345) 814 0700Email: alan.turner@tandr.kyPartnerAndrea DunsbyTel: +1 (345) 814 07<strong>13</strong>Email: andrea.dunsby@tandr.kyActivities: Advising liquidators orstakeholders in most of the majorinsolvencies and restructurings with CaymanIslands aspects since opening in 2003.WalkersWalker House, 87 Mary Street, George Town,Grand Cayman, KY1-9001 Cayman Islands.Tel: +1 (345) 949 0100Fax: +1 (345) 949 7886Email: info@walkersglobal.comWebsite: www.walkersglobal.comPartnersGuy LockeNeil LuptonColette WilkinsActivities: Highly regarded and integratedglobal team delivering informed legal supportacross the spectrum of restructuringtransactions, whether contentious or out-ofcourt.CHANNELISLANDSAppleby<strong>13</strong>-14 Esplanade, St. Helier, Jersey JE1 1BD,Channel Islands.Tel: +44 (1534) 888 777Fax: +44 (1534) 888 778Email: info@applebyglobal.comWebsite: www.applebyglobal.comContactFraser RobertsonEmail: frobertson@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.Appleby1st Floor, Lefebvre Place, Lefebvre Street,St Peter Port, Guernsey GY1 2JP,Channel Islands.Tel: +44 (1481) 755 625Fax: +44 (1481) 728 992ContactJeremy Le TissierEmail: jletissier@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.Bedell CristinPO Box 75, 26 New Street, St. Helier,JE4 8PP Jersey, Channel Islands.Tel: +44 (1534) 814 814Fax: +44 (1534) 814 815Email: anthony.dessain@bedellgroup.comWebsite: www.bedellgroup.comSenior PartnerAnthony DessainContactsRobert GardnerEdward DrummondActivities: Providing legal advice andremedies relating to bankruptcy and pursuingassets involving companies, trusts andindividuals including reconstruction andassistance where appropriate and crossborderactivities.PKF (UK) LLPSarnia House, PO Box 296, Le Truchot,St Peter Port, GY1 4NA Guernsey,Channel Islands.Tel: +44 (1481) 727 927Fax: +44 (1481) 710 511Email: admin@pkfguernsey.comWebsite: www.pkfguernsey.com202

PartnerTim CummingTel: +44 (1481) 727 927Email: tim.cumming@pkfguernsey.comActivities: Advisers on all forms ofinsolvency and restructuring.PricewaterhouseCoopersTwenty Two Colomberie, St. Helier,JE1 4XA Jersey, Channel Islands.Tel: +44 (1534) 838 200Fax: +44 (1534) 838 201Website: www.pwc.com/jgPartnerMark JamesTel: +44 (1534) 838 304Email: mark.james@je.pwc.comManagerOwen WoolgarTel: +44 (1534) 838 363Email: owen.woolgar@je.pwc.comPricewaterhouseCoopers CI LLPRoyal Bank Place, PO Box 321,1 Glategny Esplanade, GY1 4ND Guernsey,Channel Islands.Tel: +44 (1481) 752 000Fax: +44 (1481) 752 001Website: www.pwc.com/jgPartnerNick VermeulenTel: +44 (1481) 752 089Email: nick.vermeulen@gg.pwc.comManagerNatalie BoesTel: +44 (1481) 752 073Email: natalie.boes@gg.pwc.comActivities: PricewaterhouseCoopers CI LLPprovides advice on corporate restructuring,solvent winding ups as well as formalliquidator and administrator appointments.WalkersPO Box 72, Walker House, 28-34 Hill Street,St. Helier, JE4 8PN Jersey, Channel Islands.Tel: +44 (1534) 700 700Fax: +44 (1534) 700 800Email: info@walkersglobal.comWebsite: www.walkersglobal.comPartnerDavid SteensonActivities: Highly regarded and integratedglobal team delivering informed legal supportacross the spectrum of restructuringtransactions, whether contentious or out-ofcourt.PEOPLE’SREPUBLIC OFCHINAAmerican Appraisal China LimitedRoom 502, Office Tower A, Beijing FortunePlaza, No. 7 Dongsanhuan Zhong Road,Chaoyang District, Beijing 100020, People’sRepublic of China.Tel: +86 (10) 6539 <strong>13</strong>34/6530 9088Fax: +86 (10) 6539 <strong>13</strong>36Email: asianmailbox@american-appraisal.comWebsite: www.american-appraisal.com.cnVice President, Beijing OfficeKevin LeungActivities: Provide independent valuation ofentire businesses, real estate,machinery/equipment and intangible assetswith global compliance capability.American Appraisal China LimitedRoom 319, C-1 High Tech Industrial Park,Shenzhen 51805, People’s Republic of China.Tel: +86 (755) 2655 1630Fax: +86 (755) 2655 1712Email: asianmailbox@american-appraisal.comWebsite: www.american-appraisal.com.cnManager, Industrial Valuation GroupTommy WangActivities: Provide independent valuation ofentire businesses, real estate,machinery/equipment and intangible assetswith global compliance capability.American Appraisal China LimitedUnit 3602, Bund Center,222 Yan An Road East, Shanghai 200002,People’s Republic of China.Tel: +86 (21) 6335 0<strong>13</strong>0/0<strong>13</strong>2Fax: +86 (21) 6335 0125Email: asianmailbox@american-appraisal.comWebsite: www.american-appraisal.com.cnManager, Business DevelopmentNeville LamActivities: Provide independent valuation ofentire businesses, real estate,machinery/equipment and intangible assetswith global compliance capability.American Appraisal China LimitedRoom 2303, 23/F, Citic Plaza,233 TianHeBei Road, Guangzhou 510620,People’s Republic of China.Tel: +86 (20) 3891 2300/2303/2223 0274Fax: +86 (20) 3891 2878Email: asianmailbox@american-appraisal.comWebsite: www.american-appraisal.com.cnBusiness Development ManagerJoe ZhouActivities: Provide independent valuation ofentire businesses, real estate,machinery/equipment and intangible assetswith global compliance capability.Bingham McCutchen LLPChina World Tower 3, 1 JianguomenwaiAvenue, 50th Floor, Beijing 100004,People’s Republic of China.Tel: +86 (10) 6535 2888Fax: +86 (10) 6535 2899Email: info@bingham.comWebsite: www.bingham.comCo-Managing PartnersBrian BeglinTel: +86 (10) 6535 2808Email: brian.beglin@bingham.comXiaowei YeTel: +86 (10) 6535 2818Email: xiaowei.ye@bingham.comActivities: Provides extensive experience incross border insolvency, financialrestructuring and special situationsinvestments to financial institutions, includinghedge, private equity and other investmentfund managers, and capital marketsparticipants throughout the Asia-Pacificregion.Blake DawsonSuite 3408-10, CITIC Square,1168 Nanjing Road West, Shanghai 200041,People’s Republic of China.Tel: +86 (21) 5100 1796Fax: +86 (21) 5292 5161Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Cadwalader, Wickersham & TaftLLP2301 China Central Place Tower 2, NO.79 Jianguo Road, Beijing 100025, China.Tel: +86 (10) 6599 7200Fax: +86 (10) 6599 7300Email: cwtinfo@cwt.comWebsite: www.cadwalader.comPartners & Co-Chairmen of Financial<strong>Restructuring</strong> Dept.Deryck A. PalmerEmail: deryck.palmer@cwt.comJohn J. RapisardiEmail: john.rapisardi@cwt.comActivities: Representation of secured andunsecured lenders, bondholders, creditors’committees, borrowers, asset purchasers andothers in restructuring transactions andreorganisation cases.Chadbourne & Parke LLPRoom 902, Tower A Beijing Fortune Centre 7Dongsanhuan Zhonglu, Chaoyang District,Beijing 100020, People’s Republic of China.Tel: +86 (10) 6530 8846Fax: +86 (10) 6530 8849Website: www.chadbourne.comManaging PartnerChris FloodEmail: cflood@chadbourne.comActivities: Chadbourne & Parke LLP offers afull range of services in cross-borderbankruptcies and financial restructurings,business restructurings and insolvencies.Clifford Chance LLP40th Floor, Bund Centre,222 Yan An East Road, Shanghai 200002,People’s Republic of China.Tel: +86 (21) 2320 7288Fax: +86 (21) 2320 7256Website: www.cliffordchance.comPartnerScott BacheTel: +852 2826 24<strong>13</strong>Email: scott.bache@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Clifford Chance LLP3326 China World Tower 1,No. 1 Jianguomenwai Dajie, Beijing 100004,People’s Republic of China.Tel: +86 (10) 6505 9018Fax: +86 (10) 6505 9028Website: www.cliffordchance.comPartnerScott BacheTel: +852 2826 24<strong>13</strong>Email: scott.bache@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Duan & Duan Law Firm17th Floor, No. 88, Zun Yi Nan Road,Shanghai 200335, People’s Republic of China.Tel: +86 (21) 6219 1103Fax: +86 (21) 6275 2273Email: gaojun@duanduan.comWebsite: www.duanduan.comManaging PartnerDuan Qihua (Charles Duan)203

PartnerGao Jun (Gary Gao)Activities: Duan & Duan may help you findthe gateway to China, legally, efficiently, withits professional services.Duan & Duan Law Firm BeijingOffice, ChinaSuites 3506, Beijing Fortune Plaza,7 Dong San Huan Mid Road, Beijing 100020,People’s Republic of China.Tel: +86 (10) 6533 0663Fax: +86 (10) 6533 0660Email: oscarchen@duanduan.comWebsite: www.duanduan.comPartnerChen Ruojian (Oscar Chen)Felsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegais5/F Standard Chartered Tower, 201 CenturyAvenue Lujiazui, Pudong Shanghai 200120,People’s Republic of China.Tel: +86 (21) 6182 6801Fax: +86 (21) 6182 6777Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault PintoAntonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Garrigues3205 West Gate Mall, 1038 Nanjing Xi Lu,Shanghai 200041, People’s Republic of China.Tel: +86 (21) 5228 1122Fax: +86 (21) 6272 6125Website: www.garrigues.comHead of Shanghai OfficeFrancisco Soler CaballeroEmail:francisco.soler.caballero@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Hogan Lovells International LLP11th Floor, Shanghai Kerry Centre,1515 Nanjing West Road, Shanghai 200040,People’s Republic of China.Tel: +86 (21) 6<strong>13</strong>8 1688Fax: +86 (21) 6279 2695Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comHogan Lovells International LLP31st Floor, Tower 3, China Central Place, 77Jianguo Road, Chaoyang District, Beijing10025, People’s Republic of China.Tel: +86 (10) 6582 9488Fax: +86 (10) 6582 9499Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comNixon Peabody LLPPlaza 66, 63rd Floor, Suite 6302,1266 Nan Jing West Road, Shanghai 200040,People’s Republic of China.Tel: +86 (21) 6<strong>13</strong>7 5500Fax: +86 (21) 6<strong>13</strong>7 5588Website: www.nixonpeabody.comManaging Partner:David K. ChengEmail: dcheng@nixonpeabody.comO’Melveny & Myers LLPPlaza 66, 1266 Nanjing Road West, Shanghai200040, People’s Republic of China.Tel: +86 (21) 2307 7000Fax: +86 (21) 2307 7300Email: omminfo@omm.comWebsite: www.omm.comPartnerKurt J. BerneyActivities: Offering major insolvency andrestructuring capabilities. Clients includefunds, major banks, insurance companies andother financial concerns, and entertainmentfirms.Roland Berger StrategyConsultants (Shanghai) Ltd.23rd Floor Shanghai Kerry Center,1515 Nanjing West Road, Shanghai 200040,People’s Republic of China.Tel: +86 (21) 5298 66770Fax: +86 (21) 5298 6660Website: www.rolandberger.comPartnerQi WuEmail: qi_wu@cn.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Skadden, Arps, Slate, Meagher &Flom LLP30/F, China World Office 2, No. 1,Jian Guo Men Wai Avenue, Beijing 100004,People’s Republic of China.Tel: +86 (10) 6535 5500Fax: +86 (10) 6535 5577Website: www.skadden.comPartnerPeter X. HuangActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Skadden, Arps, Slate, Meagher &Flom LLPPlaza 66, Tower 1, 36th Floor,1266 Nanjing West Road, Shanghai 200040,People’s Republic of China.Tel: +86 (21) 6193 8200Fax: +86 (21) 6193 8299PartnersGregory G. H. MiaoEd SheremetaActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Squire Sanders (US) LLPSuite 1207, 12th Floor, Shanghai KerryCentre, 1515 Nanjing Road West,Shanghai 200040, People’s Republic of China.Tel: +86 (21) 6103 6300Fax: +86 (21) 6103 6363Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsDaniel F. RoulesWeiheng JiaRyan ChenDoris ChenActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Squire Sanders (US) LLP25th Floor, North Tower, Suite 2501,Beijing Kerry Centre, 1 Guanghua Road,Chaoyang District, Beijing 100020,People’s Republic of China.Tel: +86 (10) 8529 6998Fax: +86 (10) 8529 8088Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong> ContactSungbo ShimActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’s16/F Tower D, Beijing CITC, Suite 1601, A6Jianguo Menwai Avenue, Chaoyang District,Beijing 100022, People’s Republic of China.Tel: +86 (10) 6569 2909Fax: +86 (10) 6569 2910White & Case LLP19th Floor, Tower 1 of China Central Place,81 Jianguo Lu, Chaoyang District, Beijing100025, People’s Republic of China.Tel: +86 (10) 5912 9600Fax: +86 (10) 5969 5760Website: www.whitecase.comPartnersXiaoming LiTel: +86 (10) 5912 9601Email: xli@whitecase.comSteve PayneTel: +86 (10) 5912 9602Email: spayne@whitecase.comBaldwin ChengTel: +86 (10) 5912 9682Email: bcheng@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.204

White & Case LLPCITIC Square, 39th Floor,1168 West Nanjing Road, Shanghai 200041,People’s Republic of China.Tel: +86 (21) 6<strong>13</strong>2 5900Fax: +86 (21) 6323 9252Website: whitecase.comPartnerJohn LearyTel: +86 (21) 6<strong>13</strong>2 5910Email: jleary@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.WongPartnership LLP BeijingRepresentative OfficeUnit 3111 China World Office 2, 1Jianguomenwai Avenue, Chaoyang District,Beijing 100004, People’s Republic of China.Tel: +86 (10) 6505 6900Fax: +86 (10) 6505 6902Email: contactus@wongpartnership.comWebsite: www.wongpartnership.com.\nSenior PartnerAlvin YeoSenior Counsel, PartnersChan Hock KengChou Sean YuManoj Pillay SandrasegaraMark ChoyActivities: The practice specialises inadvising corporates and financial institutionson a full range of debt restructuring andliability management issues.WongPartnership LLP ShanghaiRepresentative OfficeUnit 5006, Raffles City Office Tower, 268Xizang Road Central, Shanghai 200001,People’s Republic of China.Tel: +86 (21) 6340 3<strong>13</strong>1Fax: +86 (21) 6340 3315Email: contactus@wongpartnership.comWebsite: www.wongpartnership.comSenior PartnerAlvin YeoSenior Counsel, PartnersChan Hock KengChou Sean YuManoj Pillay SandrasegaraMark ChoyActivities: The practice specialises inadvising corporates and financial institutionson a full range of debt restructuring andliability management issues.Zhongzi Law Office6th Floor, New Era Building, PingAnLi WestAvenue 26, Xicheng District, Beijing 100034,People’s Republic of China.Tel: +86 (10) 6625 6456Fax: +86 (10) 6609 1616Email: mail@zhongzi.com.cnWebsite: www.zhongzi.com.cnPartner, Attorney at LawFanghua DuanTel: +86 (10) 6625 6417Email: duanfanghua@zhongzi.com.cnActivities: Representing domestic andinternational creditors in bankruptcyproceedings, and seeking recognition andeforcement of foreign bankruptcy orders inChina.CROATIABogdanovic, Dolicki & Partners,Attorneys at LawMiramarska 24, HR-10000 Zagreb, Croatia.Tel: +385 (1) 600 5656Fax: +385 (1) 600 5657Email: odbd@odbd.hrPartners, Attorneys at LawTin DolickiTel: +385 (1) 600 5646Email: tin.dolicki@odbd.hrEdita MaticTel: +385 (1) 600 5628Email: edita.matic@odbd.hrActivities: The firm has been involved inmany privatisation processes of the majorstate-owned companies.Roland Berger StrategyConsultants d.o.o.Trg bana Jelacica 5, HR-10000 Zagreb,Croatia.Tel: +385 (1) 4804 801Fax: +385 (1) 4804 880Website: www.rolandberger.comPartnerVladimir PrevedenTel. +385 (1) 4804 840Email:vladimir_preveden@at.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Studio Legale SuttiRadnicka cesta 80/VI., HR-10000 Zagreb,Croatia.Tel: +385 (1) 481 8972Fax: +385 (1) 481 8979Email: maildesk@sutti.comWebsite: www.sutti.comResident PartnerVladimir MamicActivities: International corporate recovery,advising multi-national reorganisations,corporate restructuring, creditors’ rights andcompliance issues.Wolf Theiss - Zagreb BranchEurotower, 19th Floor, Ivana Lucica 2a,HR-10000 Zagreb, Croatia.Tel: +385 (1) 492 5400Fax: +385 (1) 492 5450Email: zagreb@wolftheiss.comWebsite: www.wolftheiss.comDirectorRonald GivenEmail: ronald.given@wolftheiss.comActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.CYPRUSPricewaterhouseCoopers LtdJulia House, 3 Themistocles Dervis Street,CY-1066 Nicosia, Cyprus.Tel: +357 (22) 555 000Fax: +357 (22) 555 027Website: www.pwc.com.cyContactsConstantinos ConstantinouEmail:constantinos.constantinou@cy.pwc.comNicolas C. NicolaouEmail: nicolas.c.nicolaou@cy.pwc.comActivities: Extensive practical experiencesupporting troubled corporates and theirstakeholders.Tornaritis Law Firm16 Stasikratous Street, 6th Floor, Nicosia,Cyprus.Tel: +357 (22) 456 056Fax: +357 (22) 664 056Email: office@tornaritislaw.comWebsite: www.tornaritislaw.comPartnersCriton TornaritisTel: +357 (22) 456 056 ext. 12Email: criton@tornaritislaw.comAlexandros AlexandrouTel: +357 (22) 456 056 ext. 14Email: alexandros@tornaritislaw.comActivities: Tornaritis law firm has theresources to draw on to undertakeinternational cross border assignments inCyprus, Greece, the Balkans and the UnitedKingdom. Has offices and professionals basedin each country to offer the followingservices; Disposals and acquisitions,corporate restructuring, administrations,liquidations, company voluntaryarrangements, deed of arrangements, debtcounselling, compromising and negotiation,debt recovery, asset racing and expertwitness reporting.CZECHREPUBLICAchour & HájekLetenská 526/2, CZ-118 00 Prague 1,Czech Republic.Tel: +420 (2) 7000 6111Fax: +420 (2) 7000 6122Email: office@achourhajek.comWebsite: www.achourhajek.comPartnersDaniel HajekEmail: daniel.hajek@achourhajek.comGabriel AchourEmail: gabriel.achour@achourhajek.comActivities: Achour & Hájek is a Czech lawfirm that delivers high-end legal advice in allmajor practice areas.Clifford ChanceJungmannova Plaza, Jungmannova 24,CZ-110 00 Prague 1, Czech Republic.Tel: +420 (2) 2255 5222Fax: +420 (2) 2255 5000Website: www.cliffordchance.comPartnerVlad PetrusEmail: vlad.petrus@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Contar LtdSlepa I 97127, CZ-142 00 Prague 4,Czech Republic.Tel: +420 (2) 4447 0678/1280Fax: +420 (2) 4447 2639Email: david@contar.czContactIvan DavidDeloitteKarolinská 654/2, Prague, Czech Republic.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesGarret BymeTel: +420 (2) 4604 2339Email: gbyme@deloittece.com205

Activities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Glatzová & Co., v.o.s.Betlémskỳ Palác, Husova 5,CZ-110 00 Prague 1, Czech Republic.Tel: +420 (2) 2440 1440Fax: +420 (2) 2424 8701Email: office@glatzova.comWebsite: www.glatzova.comPartner, Head of Practice GroupDr. Martin DancisinEmail: martin.dancisin@glatzova.comPartnerDr. Dana SchweigelováEmail: dana.schweigelova@glatzova.comActivities: <strong>Restructuring</strong> and refinancing ofmajor global groups, representation ofcreditors and restructuring of insolventCzech entities.Hogan Lovells (Prague) LLPSlovanskỳ dum, Na Príkope 859/22,CZ-110 00 Prague 1, Czech Republic.Tel: +420 (2) 2141 1700Fax: +420 (2) 2421 0004Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnerMiroslav DubovskyActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.NH Partners, advokatni kancelar,s.r.o.Vaclavske namesti 832/19,CZ-110 00 Prague 1, Czech Republic.Tel: +420 (2) 7000 5410Fax: +420 (2) 7000 5254Email: info@nhpartners.czWebsite: www.nhpartners.czPartnersMgr. Lukás NyvltEmail: lukas.nyvlt@nhpartners.czJUDr. Jakub HájekEmail: jakub.hajek@nhpartners.czActivities: Advising clients on both Czechand cross-border insolvency aspects ofbusiness transactions.NoerrNa Porící 1079/3a, CZ-110 00 Prague 1,Czech Republic.Tel: +420 (2) 3311 2111Fax: +420 (2) 3311 2112Email: info@noerr.comWebsite: www.noerr.comContactSilvia Sparfeld, M.A.Email: silvia.sparfeld@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.PricewaterhouseCoopers Ceskarepublika, s.r.o.Katerinska 40/466, CZ-120 00 Prague 2,Czech Republic.Tel: +420 (251) 151 111Fax: +420 (251) 156 111Website: www.pwc.comPartnerPetr SmutnyTel: +420 (251) 151 215Email: petr.smutny@cz.pwc.comSenior ManagerRadim BaseTel: +420 (251) 152 420Email: radim.base@cz.pwc.comActivities: Their turnaround andrestructuring practice provides advisory tostakeholders (both lenders and debtors) inunderperforming, distressed or insolventbusinesses. Their services encompassindependent business reviews, operational andfinancial restructuring, business regeneration,corporate simplification, ongoing support toinsolvent companies and optimised exitsincluding distressed M&A. Their team ofprofessionals has been an advisor in the vastmajority of the most relevant cases in thearea of insolvency and restructuring.PricewaterhouseCoopers are a leadingpractice in the Czech Republic in this areaand have direct experience with both formaland informal insolvency arrangements, as wellas cross-border and COMI insolvencies.Roland Berger StrategyConsultants GmbHNa Porící 24, CZ-110 00 Prague 1,Czech Republic.Tel: +420 (2) 1021 9511Fax +420 (2) 1021 9510Website: www.rolandberger.comPartnerConstantin KinskyTel: +420 (2) 1021 9550Email: constantin_kinsky@cz.rolandberger.comPrincipalRoland ZsilinskyTel: +420 (2) 1021 9524Email: roland_zsilinsky@cz.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Squire Sanders, v.o.s., advokátníkancelár˘Václavské námes˘tí 57/8<strong>13</strong>,CZ-110 00 Prague 1, Czech Republic.Tel: +420 221 662 111Fax: +420 221 662 222Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsJeffrey A. McGeheeMarketa LukesovaKarel SturmActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.White & Case, Advokátní kancelárNa Príkope 8, CZ-110 00 Prague 1,Czech Republic.Tel: +420 (2) 5577 1111Fax: +420 (2) 5577 1122Website: www.whitecase.comPartnersDavid PlchTel: +420 (2) 5577 1298Email: dplch@whitecase.comJonathan WeinbergTel: +420 (2) 5577 1262Email: jweinberg@whitecase.comPetr KuhnTel: +420 (2) 5577 1236Email: pkuhn@whitecase.comIvo BártaTel: +420 (2) 5577 1234Email: ibarta@whitecase.comJiri TomolaTel: +420 (2) 5577 1258Email: jtomola@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Wolf Theiss advokati s.r.o.Pobrezni 12, CZ-186 00 Prague 8,Czech Republic.Tel: +420 (2) 3476 5111Fax: +420 (2) 3476 5110Email: praha@wolftheiss.comWebsite: www.wolftheiss.comDirectorPaul SestakActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.DENMARKBech-BruunLangelinie Allé 43, DK-2100 Copenhagen 0,Denmark.Tel: +45 7227 0000Fax: +45 7227 0027Website: www.bechbruun.comContactsOle BorchTroels TuxenActivities: Through its partners leadingmembership in IBA, Insol and AmericanCollege of Bankruptcy, Bech-Bruun is veryactive within the global insolvency andrestructuring arena.Bruun & HjejleNørregade 21, DK-1165 Copenhagen K,Denmark.Tel: +45 3334 5000Fax: +45 3334 5050Website: www.bruunhjejle.comCo-Leaders, PartnersClaus Høeg MadsenEmail: chm@bruunhjejle.dkLars SkanvigEmail: lsk@bruunhjejle.dkSenior AssociatesHenrik Selchau PoulsenSoeren KoppActivities: Acts as trustee in bankruptcyestates and offers legal assistance inconnection with restructuring.DeloitteWeidekampsgade 6, PO Box 1600,DK-0900 Copenhagen C, Denmark.Tel: +45 3610 2030Fax: +45 3610 2040Website: www.deloitte.dkPartnerClaus HansenTel: +45 4015 0867Email: clhansen@deloitte.dk<strong>Restructuring</strong> ServicesJens Boëtius AndersenTel: +45 2082 0433Email: jensandersen@deloitte.dkLOGOS advokatanpartsselskabLautrupsgade 7, 4th Floor,DK-2100 Copenhagen, Denmark.Tel: +45 (70) 229 224Fax: +45 (70) 274 279Email: logos@logoslaw.dkWebsite: www.logos.is206

PartnerPeter MollerupEmail: peter@logoslaw.dkPricewaterhouseCoopersStrandvejen 44, DK-2900 Hellerup, Denmark.Tel: +45 3945 3945Website: www.pwc.dkPartnerBent JørgensenTel: +45 2960 9204Email: bej@pwc.dkActivities: Business Recovery Servicesprovides a full range of turnaround,restructuring and recovery services, including3 party reviews, refinancing, cash-flowmanagement etc.Ronne & Lundgren Law FirmTuborg Havnevej 19, DK-2900 Hellerup,Copenhagen, Denmark.Tel: +45 3525 2535Fax: +45 3525 2536Email: info@rl.dkWebsite: www.ronnelundgren.comPartnersPoul Jagd MogensenTel: +45 3525 2935Email: pjm@rl.dkJesper LundgrenTel: +45 3525 2901Email: jl@rl.dkActivities: All types of insolvency andreorganisation work including courtappointed trustee work, suspension ofpayment, voluntary creditors’ arrangements.DOMINICANREPUBLICSquire Sanders, Peña PrietoGamundiAv. Pedro Henríquez Ureña No. 157, SantoDomingo, Dominican Republic.Tel: +1 (809) 742 4900Fax: +1 (809) 472 4999Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsPedro O. GamundiAwilda M. Alcantara BourdierActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.EGYPTKosheri, Rashed and Riad LawFirm16A Maamal El. Sokkar Street, Garden City,Cario 11451, Egypt.Tel: +20 (2) 2795 4795Fax: +20 (2) 2795 8521Email: mailbox@krr-law.netWebsite: www.krr-law.comManaging PartnerDr. Tarek F. RiadEmail: tarek.riad@krr-law.comSenior PartnerDr. Ahmed S. El. KosheriEmail: ahmed.elkosheri@krr-law.comActivities: Restructured numerouscompanies in the past in Egypt.SNR Denton LLP9 Shagaret El Dor Street, Zamalek; MailingAddress: PO Box 35, Agouza, Cairo, Egypt.Tel: +20 (2) 2735 0574Fax: +20 (2) 2736 7717Website: www.snrdenton.comPartnerJ. Michael LaceyESTONIAAttorney at Law BoreniusPärnu mnt 15, Kawe Plaza, EE-10141 Tallinn,Estonia.Tel: +372 (6) 651 888Fax: +372 (6) 651 899Email: borenius@borenius.eeWebsite: www.borenius.eeManaging PartnerMarti HäälPartnerJaanus ModyActivities: Advises mainly corporate clientson all aspects of law, including insolvency andbusiness restructuring, to ensure a reliablelegal platform for developing new businessopportunities.Raidla Lejins & NorcousRoosikrantsi 2, EE-10119 Tallinn, Estonia.Tel: +372 (6) 407 170Fax: +372 (6) 407 171Email: rln@rln.eeWebsite: www.rln.eePartner, Attorney at LawRaino ParonEmail: raino.paron@rln.eeMarketing & Communications ManagerKadri LindpereEmail: kadri.lindpere@rln.eeActivities: Corporate restructuring andinsolvency. One of the largest full-servicebusiness law firms in Estonia with regionalcoverage across Northern Europe (RRAlliance).FINLANDAttorneys at law Borenius LtdYrjönkatu <strong>13</strong> A, FIN-00120 Helsinki, Finland.Tel: +358 (9) 615 333Fax: +358 (9) 615 334 99Email: info@borenius.comWebsite: www.borenius.comDirectorJyrki TähtinenEmail: jyrki.tahtinen@borenius.comPartnerMika SalonenEmail: mika.salonen@borenius.comActivities: Attorneys at law Borenius is afull service law firm with a strong trackrecord on workouts, bankruptcies and courtdriven restructurings.Castrén & Snellman, AttorneysLtd.Eteläesplanadi 14, PO Box 233,FIN-00<strong>13</strong>1 Helsinki, Finland.Tel: +358 (20) 776 5765Fax: +358 (20) 776 5001Email: communications@castren.fiWebsite: www.castren.fiSenior PartnerPekka JaatinenTel: +358 (20) 776 5401Email: pekka.jaatinen@castren.fiPartnerPauliina TenhunenTel: +358 (20) 776 5406Email: pauliina.tenhunen@castren.fiActivities: Castrén & Snellman has beeninvolved in Finland’s largest and mostcomplex bankruptcy and restructuringproceedings that have included challenginginternational aspects.Grant ThorntonPaciuksenkatu 27, FIN-00271 Helsinki,Finland.Tel: +358 (9) 512 3330Fax: +358 (9) 458 0250Email: firstname.surname@fi.gt.comWebsite: www.gtfinland.comPartnersKari NiemenojaTel: +358 (9) 5123 3316Email: kari.niemenoja@fi.gt.comJonni LeporantaTel: +358 (9) 5123 3386Email: jonni.leporanta@fi.gt.comActivities: Financial restructuring andreorganisation advisory services, mergers &acquisitions, transaction services.Lindfors & Co Attorneys at LawLtdKluuvikatu 3, FIN-00100 Helsinki, Finland.Tel: +358 (20) 762 2511Fax: +358 (20) 762 2519Email: firstname.lastname@lindforsco.comPartnerPatrik LindforsActivities: Regularly advising internationalclients in matters relating to Finnishinsolvency and restructuring proceedings,including directors’ liability issues.PricewaterhouseCoopers OyPO Box 1015 (Itämerentori 2),FIN-00101 Helsinki, Finland.Tel: +358 (9) 22800Fax: +358 (9) 657120Email: firstname.lastname@fi.pwc.comWebsite: www.pwc.comPartnerKlaus KeravuoriTel: +358 (9) 2280 1928Email: klaus.keravuori@fi.pwc.comPartnerHarri ValkonenTel: +385 (9) 2280 1968Email: harri.valkonen@fi.pwc.comActivities: Provides a wide-range ofprofessional services within troubledbusinesses, business turnarounds, companyrestructurings, and optimised exits with aclear view of rebuilding value tostakeholders.Roschier, Attorneys Ltd.Keskuskatu 7 A, FIN-00100 Helsinki, Finland.Tel: +358 (20) 506 6000Fax: +358 (20) 506 6100Website: www.roschier.comPartnerGunnar WesterlundContactJyrki PrusilaActivities: Regularly advises internationaland domestic clients in insolvency matters,including assets realisation and M&Arestructuring, and creditors committee work.Waselius & WistEteläesplanadi 24 A, FIN-00<strong>13</strong>0 Helsinki,Finland.Tel: +358 (9) 668 9520Fax: +358 (9) 668 95222Email: ww@ww.fiWebsite: www.ww.fiSenior PartnerJan WaseliusTel: +358 (9) 668 95234Email: jan.waselius@ww.fi207

PartnerLauri PeltolaTel: +358 (9) 668 95281Email: lauri.peltola@ww.fiActivities: Waselius & Wist advises onrefinancing, restructuring and recapitalisationof companies, distress asset disposals,enforcement of security arrangements andformal corporate reorganisation proceedings.White & Case, LLPEleläranta 14, FIN-00<strong>13</strong>0 Helsinki, Finland.Tel: + 358 (9) 228 64319Fax: + 358 (9) 228 64228Website: www.whitecase.comPartnersRisto OjantakanenEmail: rojantakanen@whitecase.comTanja TörnkvistTel: +358 (9) 228 64351Email: ttornkvist@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.FRANCEAFIC23 rue de I’Arcade, F-75008 Paris, France.Tel: +33 (1) 47 20 99 09Fax: +33 (1) 47 20 97 48Email: info@afic.asso.frWebsite: www.afic.asso.frManaging DirectorPaul PerpéreMarketing DirectorEmilie TuzTel: +33 (1) 47 20 69 67Email: e.tuz@afic.asso.frActivities: Encourage the development of allactivities related to private equity investment,from providing seed money and venturecapital to funding large-scale LBO’s includingdevelopment capital, turnarounds and fundsof funds.Allen & Overy LLP52 Avenue Hoche, CS 90005,F-75379 Paris Cedex 08, France.Tel: +33 (1) 40 06 54 00Fax: +33 (1) 40 06 54 54PartnerRod CorkActivities: Allen & Overy and French lawinsolvency practice Santoni & Associés have astrategic arrangement and work together onrestructuring and insolvency related work inFrance. This arrangement covers all types ofdebt restructurings and workouts, corporateand fund buy-outs, refinancings, pre- andpost-insolvency related procedures anddistressed debt trades in France.Butler Capital Partners30 cours Albert 1 er, F-75008 Paris, France.Tel: +33 (1) 45 61 55 80Fax: +33 (1) 45 61 97 94Email: contact@butlercapitalpartners.comManaging PartnerWalter ButlerCFOKarin Jacquenart-PernodActivities: Private equity firm investing inturnarounds in Europe.Credit Agricole CIB9 Quai du President Paul Doumer,F-92920 Paris La Defense Cedex, France.Tel: +33 (1) 41 89 00 00Fax: +33 (1) 41 89 46 26Website: www.ca-cib.comCEOJean Yves HocherHead of Distressed AssetsJulian HarrisTel: +33 (1) 41 89 03 27Email: julian.harris@ca-cib.comActivities: Credit Agricole CIB is aninvestor in all categories of distressed assets.DC Advisory Partners36 rue de Naples, F-75008 Paris, France.Tel: +33 (1) 42 12 49 00Website: www.dcadvisorypartners.comSecrétaire GénéralFrédéric BoucherTel: +33 (1) 42 12 49 62Email:frederic.boucher@dcadvisorypartners.comManaging DirectorNadine VeldungTel: +33 (1) 42 12 49 67Email:nadine.veldung@dcadvisorypartners.comde Drée Avocats3 rue de Monttessuy, F-75007 Paris, France.Tel: +33 (1) 47 05 71 67Fax: +33 (9) 70 62 16 85Email: pdedree@dedree-avocats.frAvocatPaul de DréeActivities: Representation of creditors,debtors, potential purchasers and directorsof companies in distress in France and incross-border matters.Debevoise & Plimpton LLP21 avenue George V, F-75008 Paris, France.Tel: +33 (1) 40 73 12 12Fax: +33 (1) 47 20 50 82Website: www.debevoise.comPartnerPierre ClermontelOf CounselEryl BesseInternational CounselAntoine d’OrnanoActivities: Represent European and USborrowers, bondholders and other lenders ina broad variety of complex internationalrestructurings and insolvencies.Deloitte185 avenue Charles de Gaulle,F-92524 Neuilly sur Seine, Cedex, France.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesVincent BatlleTel: +33 (1) 55 61 23 87Email: vbatlle@deloitte.frActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.EXAFI79 avenue de Villiers, F-75017 Paris, France.Tel: +33 (1) 56 79 19 19Fax: +33 (1) 56 79 19 10Email: thierry.duval@exafi.comWebsite: www.exafi.comManagers, Chartered Accountants, LegalAuditorsThierry DuvalCarine GuyetantActivities: Chartered accountantsspecialised in advice for restructuringinsolvent companies. Financial analyst forinsolvency courts, trustees, attorneys andlawyers. Forensic accounting.Fasken Martineau DuMoulin LLP32 avenue de l’Opéra, F-75002 Paris, France.Tel: +33 (1) 44 94 96 98Fax: +33 (1) 44 94 96 99Firm-wide Managing PartnerDavid CorbettTel: +1 (416) 868 3504Email: dcorbett@fasken.comPartner, Chair, <strong>Global</strong> <strong>Insolvency</strong> &<strong>Restructuring</strong> GroupJohn Grieve (Vancouver)Tel: +1 (604) 631 4772Email: jgrieve@fasken.comPartnerSylvain Beaumont (Paris)Tel: +33 (1) 44 94 96 98Email: sbeaumont@fasken.comActivities: Canadian and English insolvencyand restructuring lawyers representingdomestic and international businesses,institutional, secured and distressed debtlenders, creditors, directors, insolvencyprofessionals and others.Financiere D’Antin19 rue d’Antin, F-75002 Paris, France.Tel: +33 (1) 42 66 65 65Fax: +33 (1) 97 21 <strong>13</strong> 730Email: aline@finantin.comPresident:Aline Corbin-PajolecEmail: aline@finantin.comActivities: M&A adviser, either companiesunder insolvency laws or in bonis.Gibson, Dunn & Crutcher LLP166 rue du faubourg Saint-Honoré,F-75008 Paris, France.Tel: +33 (1) 56 43 <strong>13</strong> 00Fax: +33 (1) 56 43 <strong>13</strong> 33Website: www.gibsondunn.comCo-Chairs, Business <strong>Restructuring</strong> &Reorganisation Practice GroupCraig H. MilletMichael A. RosenthalDavid M. FeldmanActivities: Represent debtors’ in bankruptcycases and out-of-court restructurings,creditors’ committees and individualcreditors, bondholders, lenders, potentialacquirers, insurers and trustees.Gordon Brothers InternationalLLC68 rue du Faubourg Saint Honoré,F-75008 Paris, France.Tel: +33 (1) 53 43 64 63Fax: +33 (1) 53 43 63 00Email: jscribe@gordonbrothers.deBusiness Development DirectorJérôme ScribeHoche Societe Avocats106 Rue La Boétie, F-75008 Paris, France.Tel: +33 (1) 53 93 22 00Fax: +33 (1) 53 93 21 00Website: www.hocheavocats.comPartnersCatherine OttawayEmail: ottaway@hocheavocats.comJean-Luc BleinEmail: blein@hocheavocats.comActivities: Commercial and Business (M&A,private equity), tax, labour law, IP/IT,commercial litigation, arbitration, ADR.208

Hogan Lovells (Paris) LLP6 Avenue Kléber, F-75116 Paris, France.Tel: +33 (1) 53 67 47 47Fax: +33 (1) 53 67 47 48Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnersRichard JadotRichel QuéféActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.JeantetAssociés AARPI87 Avenue Kléber, F-75116 Paris, France.Tel: +33 (1) 45 05 80 08Fax: +33 (1) 47 04 20 41Email: info@jeantet.frWebsite: www.jeantet.frManaging PartnersPhilippe PortierEmail: pportier@jeantet.frYvon DréanoEmail: ydreano@jeantet.frCommunication & MarketingCecile StaubActivities: Handles all legal issues arising inconnection with bankruptcy proceedings,including international bankruptcy, plans fortransfers, restructurings, continuation andrecovery procedures.Kramer Levin Naftalis & FrankelLLP47 Avenue Hoche, F-75008 Paris, France.Tel: +33 (1) 44 09 46 00Fax: +33 (1) 44 09 46 01Email: amarquardt@kramerlevin.comWebsite: www.kramerlevin.comContactAlexander MarquardtActivities: Advising and representinginvestors, lenders and borrowers, privateequity providers and ‘vulture funds’, defendinglenders’ and controlling shareholders’ liabilitysuits.Latham & Watkins53 Quai d’Orsay, F-75007 Paris, France.Tel: +33 (1) 40 62 20 00Fax: +33 (1) 40 62 20 62Website: www.lw.comPartnerHervé Diogo AmengualContactsJohn HoughtonTel: +44 (20) 7670 1000Jan BakerTel: +1 (212) 906 1200Mitchell SeiderTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.Morgan Lewis & Bockius68 rue du Faubourg Saint-Honoré,F-75008 Paris, France.Tel: +33 (1) 53 30 44 46Fax: +33 (1) 53 30 43 01Email: rmontfort@morganlewis.comPartnersRoland P. MontfortJean LeygonieActivities: Cross-border aspects, claimsfiling, corporate, out-of-court settlements,safeguard problems, securities, distressedM&A, managers’ liability, with all thenecessary support practices.Nixon Peabody International LLP32, rue de Monceau, F-75008 Paris, France.Tel: +33 (1) 70 72 36 00Fax: +33 (1) 70 72 36 01Website: www.nixonpeabody.comManaging Partner:Douglas S. GlucroftEmail: dglucroft@nixonpeabody.comPricewaterhouseCoopersCorporate Finance63 rue de Villiers, F-92208 Neuilly-sur-Seine,France.Tel: +33 (1) 56 57 58 59Fax: +33 (1) 56 57 85 51Website: www.pwc.comPartnersJMC “Chuck” EvansTel: +33 (1) 56 57 85 23Email: chuck.mc.evans@fr.pwc.comOlivier MarionTel: +33 (1) 56 57 86 85Email: olivier.marion@fr.pwc.comActivities: 20 dedicated multi-lingual workoutand insolvency professionals. Financialand operational diagnostics, restructuringadvice, distressed M&A and optimised exitservices.Roland Berger StrategyConsultants11, rue de Prony, F-75017 Paris, France.Tel: +33 (1) 53 67 03 20Fax: +33 (1) 53 67 03 75Website: www.rolandberger.comPartnerEmmanuel BonnaudTel. +33 (1) 53 67 09 83Email:emmanuel_bonnaud@fr.rolandberger.comSenior ManagerGeorges de ThieulloyTel: +33 (1) 53 67 09 00Email:georges_dethieulloy@fr.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Schultze & Braun GmbHRechtsanwaltsgesellschaft3, quai Kléber, Tour Sébastopol,F-67000 Strasbourg, France.Tel: +33 (3) 88 23 70 53Fax +33 (3) 88 23 71 21Website: www.schubra.frAttorney at Law in Germany and France,Certified Specialist in International Law(France)Patrick EhretAttorney at Law in Germany and FranceEllen DelzantActivities: Corporate recovery &insolvency; cross-border insolvency,corporate finance; international law; litigation(commercial); distressed M&A, Europeancommunity law, insolvency & bankruptcy.Shearman & Sterling LLP114, avenue des Champs-Elysées,F-75008 Paris, France.Tel: +33 (1) 53 89 70 00Fax: +33 (1) 53 89 70 70Website: www.shearman.comPartnerPierre-Nicolas FerrandEmail: pferrand@shearman.comActivities: Acts for debtors and creditors inbankruptcy and pre-bankruptcy matters,including workouts and complexrestructuring transactions for both domesticand international clients.Simmons & Simmons LLP Paris5 Boulevard de la Madeleine,F-75001 Paris, France.Tel: +33 (1) 53 29 16 29Fax: +33 (1) 53 29 16 30Website: www.simmons-simmons.comOf CounselJean-Yves MarquetTel: +33 (1) 53 29 16 03Email: jean-yves.marquet@simmonssimmons.comAvocat à la CourChristian PascoetTel: +33 (1) 53 29 16 07Email:christian.pascoet@simmons-simmons.comActivities: Ongoing advice to creditors(financial institutions, debtors, equity fundsand others) in national & cross-borderinsolvencies & corporate crises.SJ Berwin LLP64 avenue Kléber, F-75116 Paris, France.Tel: +33 (1) 44 34 63 46Fax: +33 (1) 44 34 63 47Email: paris@sjberwin.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Nicholas TheysSkadden, Arps, Slate, Meagher &Flom LLP & Affiliates68 rue du Faubourg Saint-Honoré,F-75008 Paris, France.Tel: +33 (1) 55 27 11 00Fax: +33 (1) 55 27 21 99Website: www.skadden.comPartnerPierre Servan-SchreiberActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.SNR Denton LLP112 Avenue Kleber, F-75116 Paris, France.Tel: +33 (1) 53 05 16 00Fax: +33 (1) 53 05 97 27Website: www.snrdenton.comChief Administrative Officer - ParisFruman JacobsonTel: +33 (1) 53 05 16 94Squire Sanders4 Avenue Velasquez, F-75008 Paris, France.Tel: +33 (1) 5383 7400Fax: +33 (1) 5383 7401Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsAntoine AdelineAlexandre Le NinivinChristopher WildeMarie-Aimee PeyronMarine VergerActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’s40 rue de Courcelles, F-75008, France.Tel: +33 (1) 44 20 66 50Fax: +33 (1) 44 20 66 51209

Taj - Member of Deloitte ToucheTohmatsu Limited181 Avenue Charles de Gaulle,F-92524 Neuilly-sur-Seine, Cedex, France.Tel: +33 (1) 40 88 22 50Fax: +33 (1) 40 88 22 17Email: frcontacttaj@taj.frWebsite: www.taj.frPartnerStéphanie ChatelonTel: +33 (1) 55 61 65 22Email: schatelon@taj.frMarketing & Communications DirectorPascale PonroyTel: +33 (1) 40 88 85 72Email: pponroy@taj.frActivities: Provide recovery services forcompanies in financial distress, assistsmanagers and acquirers with decision-makingwhen companies come into financial oreconomical difficulties.Vatier et Associes12 rue d’Astorg, F-75008 Paris, France.Tel: +33 (1) 53 43 15 55Fax: +33 (1) 53 43 15 78Email: contact@vatier-associes.comContactLudovic GayralWeil, Gotshal and Manges LLP2, rue de la Baume, F-75008 Paris, France.Tel: +33 (1) 44 21 97 97Fax: +33 (1) 42 89 57 90Website: www.weil.comPartnersPhilippe DruonJean-Dominique Daudier de CassiniActivities: International law firm with focuson restructuring matters. Ranked in Band 1 inFrance by chambers for its restructuringpractice.White & Case LLP Avocats auBarreau de ParisToque Générale: J002, 19, Place Vendôme,F-75001 Paris, France.Tel: +33 (1) 55 04 15 15Fax: +33 (1) 55 04 15 16Website: www.whitecase.comPartnersPhilippe MetaisTel: +33 (1) 55 04 15 82Email: pmetais@whitecase.comFrancois LeloupTel: +33 (1) 55 04 15 17Email:fleloup@whitecase.comVincent MorinTel: +33 (1) 55 04 15 60Email:vmorin@whitecase.comGilles PeigneyTel: +33 (1) 55 04 15 65Email: gpeigney@whitecase.comRaphael RichardTel: +33 (1) 55 04 15 38Email: rrichard@whitecase.comCounselAlexandre JaurettTel: +33 (1) 55 04 58 28Email: ajaurett@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Willkie Farr & Gallagher LLP21-23 rue de la Ville l’Evêque,F-75008 Paris, France.Tel: +33 (1) 53 43 45 00Fax: +33 (1) 40 06 96 06Website: www.willkie.comPartnersAlexandra BigotEmail: abigot@willkie.comMaurice LantourneEmail: mlantourne@willkie.comActivities: Advice given to companies facingdifficulties under amicable/judicialproceedings, especially distressed LBOs.Acquisition/sale of under-performingcompanies/assets for trade buyers ordistressed funds. Cross-border operationswith various offices in Europe and in the US.GERMANYAltium Capital AGPossart Straße <strong>13</strong>, D-81679 Munich,Germany.Tel: +49 (89) 4<strong>13</strong>12 0Fax: +49 (89) 4<strong>13</strong>12 5<strong>13</strong>Email: info@altiumcapital.deWebsite: www.altiumcapital.comDirectorDr. Georg SchultzeActivities: European investment bankinggroup operating through a network of 14owned and affiliated offices. Provides a fullrange of investment banking services,including restructuring advisory services.Bayerische LandesbankBrienner Strasse 20, D-80333 Munich,Germany.Tel: +49 (89) 2171 01Fax: +49 (89) 2171 23578Email: kontakt@bayernlb.deWebsite: www.bayernlb.deManaging DirectorChristian SeideTel: +49 (89) 2171 22201Email: christian.seide@bayernlb.deDirectorThomas FehrenbackTel: +49 (89) 2171 22684Email: thomas.fehrenback@bayerBGP Blersch Goetsch PartnerRechtsanwälte SteuerberaterTaunusstrasse 7 A, D-65183 Wiesbaden,Germany; Mailing Address: PO Box 1840,D-65008 Wiesbaden, Germany.Tel: +49 (611) 1808 9200Fax: +49 (611) 1808 9289Email: mail@bgp-partner.deWebsite: www.bgp-partner.dePartnersDr. Jürgen BlerschHans W. GoetschActivities: Specialises in insolvencyproceedings including advice andrepresentation of creditors; restructuring andredevelopment; corporate law and tax law.Bingham McCutchen LLPOpernTurm, D-60306 Frankfurt/Main,Germany.Tel: +49 (69) 677766 0Fax: +49 (69) 677766 100Email: info@bingham.comWebsite: www.bingham.comPartnerJan D. BayerActivities: Represent bondholder andnoteholder committees in bond, CMBS andsovereign debt restructurings and adviselenders and investors in single-creditrestructurings and workouts.Brinkmann & PartnerSechslingspforte 2, D-22087 Hamburg,Germany.Tel: +49 (40) 226677Fax: +49 (40) 22667 888Email: b.brinkmann@brinkmann-partner.deWebsite: www.brinkmann-partner.deLawyerDr. Tobias BrinkmannLawyer, Tax ConsultantDr. Christoph MorgenActivities: With 33 German office locations,Brinkmann & Partner specialise in insolvencyadministration and restructuring with astrong corporate and tax law practice.Clifford ChanceMainzer Landstrasse 46,D-60325 Frankfurt am Main, Germany.Tel: +49 (69) 7199 01Fax: +49 (69) 7199 4000Website: www.cliffordchance.comPartnersHeinz-Günter GondertTel: +49 (69) 7199 1711Email:heinz-guenter.gondert@cliffordchance.comMichael WellerTel: +49 (69) 7199 3230Email: michael.weller@cliffordchance.comStefan SaxTel: +49 (69) 7199 1549Email: stefan.sax@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Corporate <strong>Restructuring</strong>Association Germany (BRSIBundesvereinigungRestrukturierung, Sanierung undInterim Management e.V)Willibaldstrasse 31, D-80689 Munich,Germany.Tel: +49 (89) 59 99 96 96Fax: +49 (89) 59 99 96 97Email: mail@brsi.deWebsite: www.brsi.deChairman of the BoardEugen M. AngsterEmail: angster@brsi.deDeputy Chairman of the BoardDr. Werner PöhlmannEmail: poehlmann@brsi.deActivities: An open, interdisciplinary andneutral platform, dedicated to facilitate thecommunication between all parties involvedin company reorganisation and turnaround,with over 500 active members.Debevoise & Plimpton LLPTaubenstrasse 7-9,D-603<strong>13</strong> Frankfurt am Main, Germany.Tel: +49 (69) 2097 5000Fax: +49 (69) 2097 5555Website: www.debevoise.comPartnerThomas SchürrleActivities: Represent European borrowers,and European and US lenders in internationalrestructurings and insolvencies.DeloitteSchwannstr. 6, D-40476 Düsseldorf, Germany.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesJochen WentzlerTel: +49 (211) 8772 2381Email: jwentzler@deloitte.deActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and business reviews.210

Deutsche Bank AGZur Hubermühle 19, D-65520 Bad Camberg,Germany.Tel: +49 (64) 3490 2457Email: mo@easytools.deAttorneyManfred ObermüllerActivities: <strong>Insolvency</strong> law.Dr. Beck & Partner GbREichendorffstr. 1, D-90491 Nürnberg,Germany.Tel: +49 (911) 951285 0Fax: +49 (911) 951285 10Email: advo@ra-dr-beck.deWebsite: www.ra-dr-beck.deManaging PartnerDr. Siegfried BeckContactJoachim ExnerActivities: Focus on insolvency proceedingsand on all legal issues concerningrestructuring or insolvency.Dr. HemmerlingSimrockallee 2, D-53173 Bonn, Germany.Tel: +49 (228) 30898 0Fax: +49 (228) 30898 22Email: bonn@kanzlei-hemmerling.deWebsite: www.kanzlei-hemmerling.deContactBarbara BrennerActivities: Creditors’ rights, securedtransactions, conflict of laws.Dr. Pannen RechtsanwälteNeuer Wall 25, D-20354 Hamburg, GermanyTel: +49 (40) 320 8570Fax: +49 (40) 320857 140Email: info@drpannen.deWebsite: www.drpannen.deCEODr. Klaus PannenActivities: Represent troubled companies,creditors’ committees, lenders and investorsin complex restructuring matters, with arecognised expertise in cross-borderinsolvencies.DSM DI Stefano Moyse, Avocats àla Cour, RechtsanwälteNiedenau <strong>13</strong>-19, D-60325 Frankfurt am Main,Germany.Tel: +49 (69) 719190 0Fax: +49 (69) 719190 219Email: contact@dsmlegal.comWebsite: www.dsmlegal.comPartnerMario Di StefanoEmail: mdistefano@dmslegal.comActivities: Corporate structuring, realestate, litigation, banking & finance.European Resolution CapitalPartners LtdRothenbaumchassee 197,D-20149 Hamburg, Germany.Tel: +49 (40) 180 390 240Email: anja.hahn@eurescap.comFelsberg, Pedretti, Mannrich eAidar, Advogados e ConsultoresLegaisKaiserswerther Str. 199, D-40474,Düsseldorf, Germany.Tel: +49 (211) 687 857 78Fax: +49 (211) 687 857 79Email: mail@felsberg.com.brWebsite: www.felsberg.com.brManaging PartnerThomas Benes FelsbergPartnersMaria da Graça de Brito Vianna PedrettiNelson MannrichCarlos Miguel Castex AidarGuilherme Fiorini FilhoCláudia Haidamus PerriRicardo Wanderley Mano SanchesRoberto Wilson Renault PintoAntonio Ivo AidarPaulo Sigaud CardozoDavid Leinig MeilerJoel Luís Thomaz BastosNeil MontgomeryThiago Vallandro FloresSergio Silva do AmaralErnani GuimarásPaulo F. BekinIvan CamposClaudia Maniaci SalimAntonio AmendolaMarcelo CosacActivities: Full-service law firm withsignificant experience in complex businesstransactions, such as privatisations, projectfinance transactions, corporaterestructurings, and mergers and acquisitions,and a tradition of service.Gibson, Dunn & Crutcher LLPWidenmayerstrasse 10,D-80538 Munich, Germany.Tel: +49 (89) 189 330Fax: +49 (89) 189 333 33Website: www.gibsondunn.comCo-Chairs, Business <strong>Restructuring</strong> &Reorganisation Practice GroupCraig H. MilletMichael A. RosenthalDavid M. FeldmanActivities: Represent debtors’ in bankruptcycases and out-of-court restructurings,creditors’ committees and individualcreditors, bondholders, lenders, potentialacquirers, insurers and trustees.Goetzpartners Corporate FinancePrinzregentenstrasse 56, D-80538 Munich,Germany.Tel: +49 (89) 290 725 0Fax: +49 (89) 290 725 200Email: info@goetzpartners.comWebsite: www.goetzpartners.comManaging DirectorDr. Gernot WunderleActivities: Provides M&A and corporatefinance services as well as turnaroundconsulting in the restructuring area.Gordon Brothers InternationalLLCNeue Rothofstrasse 19,D-603<strong>13</strong> Frankfurt, Germany.Website: www.gordonbrotherseurope.comContactsMartin HerrmannTel: +49 (69) 9203 96381Email:m.herrmann@gordonbrotherseurope.comMarco MoserTel: +49 (69) 9203 96382Email: m.moser@gordonbrotherseurope.comGordon Brothers InternationalLLCNeumarkt Galerie, Richmodstrasse 6,D-50667 Köln, Germany.Tel: +49 (221) 9204 2402Fax: +49 (221) 9204 2350Email: jscribe@gordonbrotherseurope.comWebsite: www.gordonbrotherseurope.comBusiness Development DirectorJérôme ScribeActivities: Due diligence, disposition,clearance, investment & financing for retailassets.Görg Partnerschaft vonRechtsanwältenSachsenring 81, D-50677 Cologne, Germany.Tel: +49 (221) 33660 0Fax: +49 (221) 33660 80Email: cologne@goerg.deWebsite: www.goerg.deSenior PartnerDr. Klaus Hubert GörgPartnerHans Gerd H. JauchActivities: A full service law firm with fiveoffices in Germany advising debtors/creditorsin restructuring/insolvencies nationally andinternationally.Grant Thornton GmbHWirtschaftsprüfungsgesellschaftDomstraße 15, D-20095 Hamburg, Germany.Tel: +49 (40) 415 22 140Fax: +49 (40) 415 22 112Email: hamburg@grantthornton.deWebsite: www.grantthornton.deManaging PartnerDr. Kai BartelsTel: +49 (40) 415 22 495Email: k.bartels@ham.grantthornton.dePartnerDr. Joachim DannenbaumTel: +49 (40) 415 22 841Email: j.dannenbaum@ham.grantthornton.deActivities: Preparation of independentbusiness reviews (IBR), restructuring opinions(IDW S 6), interim management, distressedM&A, asset valuation, advising on reportingsystems.Grub Brugger & PartnerReinsburgstraße 27, D-70178 Stuttgart,Germany.Tel: +49 (711) 96689 0Fax: +49 (711) 9668 919Email: stuttgart@grub-brugger.deWebsite: www.grub-brugger.deLawyersDr. Volker GrubDr. Wolfgang BilgeryDr. Philipp GrubMartin MuchaActivities: Specialised in insolvencies,particularly in the administration ofinsolvencies, sale and purchase of companies,reorganisation of companies as well as legaladvice regarding all questions relating to theinsolvency law.HERMANN RechtsanwälteWirtschaftsprüfer SteuerberaterBleichstrasse 2-4, D-603<strong>13</strong> Frankfurt amMain, Germany.Tel: +49 (69) 9<strong>13</strong>092 0Fax: +49 (69) 9<strong>13</strong>092 30Email: frankfurt@hermann-law.comWebsite: www.hermann-law.comContactsOttmar HermannRainer M. BährDaniel F. FritzActivities: Regular activities as courtappointed administrators or advisors invarious cross-border insolvency andrestructuring cases, including insolvent groupsof companies ( e.g. Woolworth Germany,Wilhelm Karmann GmbH).Hogan Lovells International LLPKarl-Scharnagl-Ring 5, D-80539 Munich,Germany.Tel: +49 (89) 29012 0Fax: +49 (89) 29012 222Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnersDetlef HassHeiko TschaunerChristian Herweg211

Activities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.Hogan Lovells International LLPAlstertor 21, D-20095 Hamburg, Germany.Tel: +49 (40) 419 93 0Fax: +49 (40) 419 93 200Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comHogan Lovells International LLPUntermainanlage 1, D-60329 Frankfurt amMain, Germany.Tel: +49 (69) 96236 0Fax: +49 (69) 9623 6100Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnerKatlen BlöckerActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.Hogan Lovells International LLPKennedydamm 17, D-40476 Düsseldorf,Germany.Tel: +49 (211) <strong>13</strong>68 0Fax: +49 (211) <strong>13</strong>68 100Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comifb Institute for FinancialConsulting GmbHIm Alten Garten 5, D-63322 Roedermark,Germany.Tel: +49 6074 62370Fax: +49 6074 62372Email: info@ifb-consult.comContactProf. Dr. GiersbergActivities: <strong>Restructuring</strong>, pre-insolvencyconsulting, interim management, financing.Interim International GmbHturnaroundmanagement,management for special situationsWillibaldstrasse 31, D-80689 Munich,Germany.Tel: +49 (89) 54 45 96 0Fax: +49 (89) 54 45 96 66Website: www.interiminternational.deDirectorEugen AngsterEmail: angster@interiminternational.deActivities: Turnaround management andstrategies, interim management, operative andfinancial restructuring in leadership positions.Interim International HumanResources GmbH & Co. KGWillibaldstrasse 31, D-80689 Munich,Germany.Tel: +49 (89) 54 45 96 0Fax: +49 (89) 54 45 96 66Website: www.iin-flex.deDirectorFilip PejicEmail: pejic@iin-flex.deActivities: Executive search, humanresources consulting, expert search, interimsearch, consulting boutique specialised inproviding and identifying personnel forturnaround and restructuring cases.IsoPart GmbHHammer Dorfstrasse 39, D-40221Düsseldorf, Germany.Tel: +49 (211) 239229 0Fax: +49 (211) 239229 11Email: isopart@isopart.comWebsite: www.isopart.comContactsOliver OechsleStefan FeinendegenActivities: Seasoned hands-on turnaroundprofessionals for insolvency situations withcomplex strategic and financial challenges. Nolegal/tax consulting. Funding available.Latham & Watkins LLPReuterweg 20, D-60323 Frankfurt am Main,Germany.Tel: +49 (69) 6062 6000Fax: +49 (69) 6062 6060Website: www.lw.comPartnersPhilipp von RandowVolker SchaeferContactsJohn HoughtonTel: +44 (20) 7670 1000Jan BakerTel: +1 (212) 906 1200Mitchell SeiderTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.Latham & Watkins LLPWarburgstraße 50, D-20354 Hamburg,Germany.Tel: +49 (40) 4140 30Fax: +49 (40) 4140 3<strong>13</strong>0Website: www.lw.comPartnersFrank GrellNikolaus LorenzContactsJohn HoughtonTel: +44 (20) 7710 1000Jan BakerTel: +1 (212) 906 1200Mitchell SeiderTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.McDermott Will & EmeryRechtsanwälte Steuerberater LLPNymphenburger Straße 3, D-80335 Munich,Germany.Tel: +49 (89) 12712 0Fax: +49 (89) 1271 2111Email: info-munich@mwe.comWebsite: www.mwe.comPartnerDr. Uwe GoetkerHead of OfficeDr. Dirk PohlActivities: Providing advice in internationalcorporate and restructuring matters.McDermott Will & EmeryRechtsanwälte Steuerberater LLPStadttor 1, D-40219 Düsseldorf, Germany.Tel: +49 (211) 30211 0Fax: +49 (211) 3021 1555Email: info-duesseldorf@mwe.comWebsite: www.mwe.comPartnerDr. Uwe GoetkerHead of OfficeKonstantin GüntherActivities: Providing advice in internationalcorporate and restructuring matters.Mueller-Heydenreich Beutler &KollegenSchwanthalerstrasse 32, D-80336 Munich,Germany.Tel: +49 (89) 54511 0Fax: +49 (89) 5451 1444Email: info@mhbk.deWebsite: www.mhbk.deContactsAxel BierbachOliver ScharteActivities: Sales and liquidations of variousinternational companies and subsidiaries ofGerman based insolvent companies.NoerrBörsenstraße 1, D-603<strong>13</strong> Frankfurt am Main,Germany.Tel: +49 (69) 971 4770Fax: +49 (69) 9714 77100Email: info@noerr.comWebsite: www.noerr.comContactsDr. Thomas HoffmannEmail: thomas.hoffmann@noerr.comEckhard Martin, LL.M.Email: eckhard.martin@noerr.comActivities: Advising shareholders,companies, creditors and investors regardingGerman and cross-borderinsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.NoerrPaul-Schwarze-Straße 2, D-01097 Dresden,Germany.Tel: +49 (351) 816 600Fax: +49 (351) 816 6081Email: info@noerr.comWebsite: www.noerr.comContactJens GehlichEmail: jens.gehlich@noerr.comActivities: Advising shareholders,companies, creditors and investors regardingGerman and cross-borderinsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.NoerrBrienner Straße 28, D-80333 Munich,Germany.Tel: +49 (89) 28628 0Fax: +49 (89) 280110Email: info@noerr.comWebsite: www.noerr.comContactDr. Christoph SchotteEmail: christoph.schotte@noerr.comActivities: Advising shareholders,companies, creditors and investors regardingGerman and cross-borderinsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.NoerrSpeditionstraße 1, D-40221 Düsseldorf,Germany.Tel: +49 (211) 499 860Fax: +49 (211) 4998 6100Email: info@noerr.comWebsite: www.noerr.comContactDr. Stefan BlumEmail: stefan.blum@noerr.comActivities: Advising shareholders, companies,creditors and investors regarding German andcross-border insolvency/ restructuringproceedings. Trustee for secured creditors.Advice to insolvency administrators.212

NoerrCharlottenstraße 57, D-10117 Berlin,Germany.Tel: +49 (30) 20 94 2000Fax: +49 (30) 20 94 2094Email: info@noerr.comWebsite: www.noerr.comContactProf. Dr. Christian PleisterEmail: christian.pleister@noerr.comActivities: Advising shareholders,companies, creditors and investors regardingGerman and cross-borderinsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.PricewaterhouseCoopers AGWPGFriedrich-Ebert-Anlage 35-37, D-60327Frankfurt am Main, Germany.Tel: +49 (69) 9585 2532Fax: +49 (69) 9585 949816Email: derik.evertz@de.pwc.comWebsite: www.pwc.comLeader, Germany, Business RecoveryServicesDr. Derik EvertzActivities: Specialist in multi-jurisdictionalbusiness of financial restructuring and use ofdifferent bankruptcy protection laws.RAe Dr Heckelmann & KoerbitzPromenadeplatz 9, D-80333 Munich,Germany.Tel: +49 (89) 2421 6730Fax: +49 (89) 2421 6745Email: info@hkm-law.deWebsite: www.hkm-law.deLawyerAlfred KoerbitzTel: +49 (89) 2421 6737Email: koerbitz@hkm-law.deActivities: Trustee and administrator.Roland Berger StrategyConsultants GmbHAlt Moabit 101b, D-10559 Berlin, Germany.Tel: +49 (30) 39927 50Fax: +49 (30) 39927 3303Website: www.rolandberger.comPartnersBernd BrunkeTel: +49 (30) 39927 3527Email: bernd_brunke@de.rolandberger.comTimo KampTel: +49 (30) 39927 3493Email: timo_kamp@de.rolandberger.comUwe JohnenTel: +49 (30) 39927 3520Email: uwe_johnen@de.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Roland Berger StrategyConsultants GmbHKarl-Arnold-Platz 1, D-40474 Düsseldorf,Germany.Tel: +49 (211) 4389 0Fax: +49 (211) 4389 2140Website: www.rolandberger.comPartnersMax FalckenbergTel: +49 (211) 4389 2301Email:max_falckenberg@de.rolandberger.comNils von KuhlweinTel: +49 (211) 4389 2122Email:nils_von_kuhlwein@de.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Roland Berger StrategyConsultants GmbHOpernTurm, Bockenheimer Landstraße 2-8,60306 Frankfurt, Germany.Tel: +49 (69) 299 2460Fax: +49 (69) 299 246502Website: www.rolandberger.comPartnersTimo KampEmail: timo_kamp@de.rolandberger.comJochen SchönfelderEmail:jochen_schoenfelder@de.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Roland Berger StrategyConsultants GmbHHanseatic Trade Center, Am Sandtorkai 41,D-20457 Hamburg, Germany.Tel: +49 (40) 3763140Fax: +49 (40) 37631 4102Website: www.rolandberger.comPartnersMax FalckenbergEmail:max_falckenberg@de.rolandberger.comJan-Hendrik TöbbeTel: +49 (40) 37631 4306Email:jan-hendrik_toebbe@de.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Roland Berger StrategyConsultants GmbHHighlight Towers, Mies-van-der-Rohe-Str. 6,D-80807 Munich, Germany.Tel: +49 (89) 9230 0Fax: +49 (89) 9230 8202Website: www.rolandberger.comPartnerUwe Johnen, Tel. +49 (89) 9230 8182Email: uwe_johnen@de.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.RSW Runkel Schneider WeberFriedrich-Ebert-Straße 146,D-42117 Wuppertal, Germany.Tel: +49 (202) 302071Fax: +49 (202) 314708Email: wuppertal@rsw-anwaelte.deWebsite: www.rsw-anwaelte.deContactsNorbert WeberActivities: German insolvency pratitioner.Member of INSOL Europe. Provides legaladvice concerning business rescue, recoveryand renewal in Germany and cross-borderjoint ventures.Subscribing member of R3.Salans LLPMarkgrafenstraße 33, D-10117 Berlin,Germany.Tel: +49 (30) 26473 0Fax: +49 (30) 26473 <strong>13</strong>3Website: www.salans.comManaging PartnerAndreas ZiegenhagenTel: +49 (30) 26473 207Email: aziegenhagen@salans.comPartnerDr. Dietmar SchulzTel: +49 (69) 45001 2380Email: dschulz@salans.comActivities: Salans has an extensive anddiverse restructuring practice that handles allfacets of international restructuring projectsof all sizes.Schultze & Braun GmbHRechtsanwaltsgesellschaftWirtschaftsprüfungsgesellschaftEisenbahnstrafle 19-23, D-77855 Achern,Germany.Tel: +49 (0) 78 41/708-0Fax: +49 (0) 78 41/708-301Email: mail@schubra.deWebsite: www.schubra.euAttorney at Law in Germany,Certified Specialist in <strong>Insolvency</strong> Law,Chartered Accountant:Dr. Eberhard BraunTel: +49 (0) 78 41/708-211Head of International Business Recovery,Cross-Border <strong>Restructuring</strong> & Insolvencies:Dr. Annerose Tashiro, AttyTel: +49 (0) 78 41/708-235Activities: Corporate recovery &insolvency; cross-border insolvency,corporate finance; international law; litigation(commercial); distressed M&A, Europeancommunity law, insolvency & bankruptcy.Simmons & Simmons LLPMesseTurm, Friedrich-Ebert-Anlage 49,D-60308 Frankfurt am Main, Germany.Tel: +49 (69) 907454-32Fax: +49 (69) 90745 454Email: regina.rath@simmons-simmons.comWebsite: www.simmons-simmons.comCounselRegina RathPartnerDr. Hans-Hermann AldenhoffActivities: Advising creditors, in particularfinancial institutions, as well as debtors,shareholders and investors in national andcross-border insolvencies and corporatecrises; insolvency litigation.SJ Berwin LLPKurfürstendamm 63, D-10707 Berlin,Germany.Tel: +49 (30) 8871 7150Fax: +49 (30) 8871 7166Email: berlin@sjberwin.comSJ Berwin LLPKarolinen Karree, Karlstraße 12,D-80333 Munich, Germany.Tel: +49 (89) 89081 0Fax: +49 (89) 89081 100Email: munich@sjberwin.comSJ Berwin LLPAtrium am Opernplatz, Bockeheimer Anlage46, D-60322 Frankfurt am Main, Germany.Tel: +49 (69) 5050 3250 0Fax: +49 (69) 5050 32499Email: frankfurt@sjberwin.comSkadden, Arps, Slate, Meagher &Flom LLP & AffiliatesAn der Welle 3, D-60322 Frankfurt am Main,Germany.Tel: +49 (69) 74220 0Fax: +49 (69) 7422 0300Website: www.skadden.comPartnerHilary S. Foulkes2<strong>13</strong>

Activities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Skadden, Arps, Slate, Meagher &Flom LLP & AffiliatesKarl-Scharnagl-Ring 7, D-80539 Munich,Germany.Tel: +49 (89) 2444 950Fax: +49 (89) 2444 95300Website: www.skadden.comPartnerWalter R. HenleActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Squire Sanders (UK) LLPUnter den Linden 14, D-10117 Berlin,Germany.Tel: +49 (30) 7261 68 000Fax: +49 (30) 7261 68 01Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsDr. Frank H. Walter-von GierkeMarkus SchmuckerSiemer KruempelmannActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Squire Sanders (US) LLPRechtsanwälte, Steuerberater Taunusanlage17, D-60325 Frankfurt am Main, Germany.Tel: +49 (69) 17392 400Fax: +49 (69) 17392 401Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsAndreas FillmannAndreas LehmannJöerg UhlmannActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’sMain Tower, Neue Mainzer Strasse 52,D-60311 Frankfurt, Germany.Tel: +49 (69) 3399 90Fax: +49 (69) 3399 9119Thierhoff Müller & PartnerDittrichring 18-20, D-04109 Leipzig,Germany.Tel: +49 (341) 1493 0Fax: +49 (341) 1493 111Email: michael.thierhoff@tmpartner.deWebsite: www.tmpartner.dePartner, CAMichael ThierhoffPartner, LawyerRenate MüllerActivities: Reorganisations and turnaround,workouts, comprehensive advice ininsolvency proceedings, insolvency law,liquidations, court appointed administratorsand bond restructurings.Thierhoff Müller & PartnerTaunusanlage 17, D-60325 Frankfurt am Main,Germany.Tel: +49 (69) 979953 0Fax: +49 (69) 979953 99Email: gerret.hoeher@tmpartner.deWebsite: www.tmpartner.dePartner, LawyerGerret HöherActivities: Reorganisations and turnaround,workouts, comprehensive advice ininsolvency proceedings, insolvency law,liquidations, court appointed administratorsand bond restructurings.Weil, Gotshal & Manges LLPTaunusanlage 1 (Skyper), D-60329 Frankfurtam Main, Germany.Tel: +49 (69) 2165 9600Fax: +49 (69) 2165 9699Email: weil.frankfurt@weil.comWebsite: www.weil.comManaging PartnerGerhard SchmidtMarketing ManagerMartina BoehmfeldtActivities: Their global restructuringpractice encompasses cross-borderrestructurings, distressed M&A transactionsand chapter 11 reorganisations for domesticand international clients of all industries.Wellensiek Partner RechtsanwälteBlumenstrasse 17, D-69115 Heidelberg,Germany.Tel: +49 (6221) 9118 0Fax: +49 (6221) 9118 77Email: info@wellensiek.deWebsite: www.wellensiek.deRechtsanwalt - Steuerberater - CPA (USA)Dr. Christof SchillerTel: +49 (6221) 9118 86Email: christof.schiller@wellensiek.deRechtsanwaltDr. Werner SchreiberTel: +49 (6221) 9118 832Email: werner.schreiber@wellensiek.deActivities: <strong>Insolvency</strong> administration, crossborderinsolvencies, evaluation of NPLportfolios, workout of NPL portfolios,distressed M&A, out-of-court restructuring,officers liability.White & Case LLPGraf-Adolf-Platz 15, D-402<strong>13</strong> Düsseldorf,Germany.Tel: +49 (211) 491 950Fax: +49 (211) 491 95100Website: www.whitecase.comPartnerDr. Biner BährTel: +49 (0) 211 540680 164Email: bbaehr@whitecase.comGeorge J. DegenhardtTel: +49 (0) 211 49195 278Email: jdegenhardt@whitecase.comDr. Jan-Philipp HoosTel: +49 (0) 211 540680 188Email: jhoos@whitecase.comAndreas KleinschmidtTel: +49 (211) 540680 186Email: akleinschmidt@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.White & Case LLPMaximilianstrasse 35, D-80539 Munich,Germany.Tel: +49 (89) 20604 3500Fax: +49 (89) 20604 3510Website: www.whitecase.comPartnersDr. Carlos MackEmail: cmack@whitecase.comLeïla RöderTel: +49 (89) 206043 770Email: lroeder@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.White & Case LLPBockenheimer Landstrasse 20,D-60323 Frankfurt am Main, Germany.Tel: +49 (69) 29994 0Fax: +49 (69) 29994 1444Website: www.whitecase.comPartnersDr. Dennis HeuerTel: +49 (69) 29994 1576Email: dheuer@whitecase.comDr. Tom Oliver SchorlingTel: +49 (69) 29994 1525Email: tschorling@whitecase.comJulia MüllerTel: +49 (69) 29994 <strong>13</strong>37Email: jmueller@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.White & Case LLPKurfürstendamm 32, D-10719 Berlin,Germany.Tel: +49 (30) 8809 110Fax: +49 (30) 8809 11297Website: www.whitecase.comPartnersDr. Christoph Schulte-KaubrüggerTel: +49 (30) 8809 <strong>13</strong>523Email: cschulte-kaubruegger@whitecase.comDr. Philipp HackländerTel: +49 (30) 8809 <strong>13</strong>323Email: phacklaender@whitecase.comDr. Markus WischemeyerTel: +49 (231) 58960 159Email: mwischemeyer@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.214

White & Case LLPJungfernstieg 51 (Prien-Haus),D-20354 Hamburg, Germany.Tel: +49 (40) 35005 0Fax: +49 (40) 3500 5111Website: www.whitecase.comPartnersDr. Sven-Holger UndritzTel: +49 (49) 35005 191Email: shundritz@whitecase.comBettina SchmuddeTel: +49 (40) 808<strong>13</strong>6 182Email: bschmudde@whitecase.comSylvia FiebigTel: +49 (40) 808<strong>13</strong>6 329Email: sfiebig@whitecase.comDr. Ellen Meyer-SommerTel: +49 (40) 808<strong>13</strong>6 357Email: emeyer-sommer@whitecase.comStephanie PidunTel: +49 (40) 808<strong>13</strong>6 198Email: spidun@whitecase.comCounselDr. Henning MordhorstTel: +49 (40) 880 9<strong>13</strong> 750Email: hmordhorst@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.GHANAHesse & HessePO Box 0514, Osu-Accra, Ghana.Tel: +233 (21) 778215Fax: +233 (21) 761197Email: info@hesselawfirm.comWebsite: www.hesselawfirm.comManaging PartnerDavid A. HesseSenior AssociateEmmanuel E. AnnanActivities: Providing legal advice tocorporate bodies going through insolvencyand assisting creditors of such insolventbodies.PricewaterhouseCoopers (Ghana)LimitedNo. 12 Airport City, Una Home, 3rd Floor,PO Box CT 42, Cantonments, Accra Ghana.Tel: +233 (21) 761 500Fax: +233 (21) 761 544Email: pwc.ghana@gh.pwc.comWebsite: pwc.com/ghCountry Senior PartnerFelix AddoTel: +233 (302) 761 614Email: felix.addo@gh.pwc.comPartnerWyczynsky AshiagborTel: +233 (302) 761 465Email: vish.ashiagbor@gh.pwc.comActivities: PwC advises various stakeholdersin underperforming or distressed businessesacross Africa. Services include insolvencyappointments (receiverships and liquidation),independent business reviews, restructuringand business turnaround.GIBRALTARPricewaterhouseCoopers Limited10th Floor, International Commercial Centre,Casemates Square, Gibraltar.Tel: +350 2007 3520Fax: +352 2004 8267Email: pwc.gib@gi.pwc.comWebsite: www.pwc.giPartnerEdgar C. LavarelloEmail: edgar.c.lavarello@gi.pwc.comSenior ManagerCharles A. BottaroEmail: charles.a.bottaro@gi.pwc.comActivities: Members’ voluntary liquidations,creditors’ insolvent liquidations, compulsory(court appointment) liquidations,receiverships, personal insolvency and generalrestructuring work.GREECEBazinas Law Firm11 Alopekis Street, GR-106 75 Athens,Greece.Tel: +30 (210) 725 4800Fax: +30 (210) 725 4835Email: info@bazinas.comWebsite: www.bazinas.comSenior PartnerGeorge B. BazinasEmail: gbazinas@bazinas.comActivities: Domestic and cross-borderinsolvency and recognition; complex domesticand international litigation; company andcommercial law; banking and finance; securitieslitigation; economic and corporate crime.Deloitte3a Fragkoklissias & Granikou str.,GR-151 25 Athens, Greece.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesDimitris KoutsopoulosTel: +30 (210) 678 1200Email: dkoutsopoulos@deloitte.grActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Moratis Passas15 Voukourestiou Street, GR-106 71 Athens,Greece.Tel: +30 (210) 361 8797Fax: +30 (210) 363 6516Email: office@morpas.grManaging PartnerD.S. PassasSenior PartnerG.J. MoratisActivities: Advising creditors as well asdebtors. Enforcement on insolvent debtorsassets. Particular specialisation in shippinginsolvencies.Potamitisvekris9 Neofytou Vamva Street, GR-106 74 Athens,Greece.Tel: +30 (210) 338 0000Fax: +30 (210) 338 0020Email: info@potamitisvekris.comWebsite: www.potamitisvekris.comPartnersStathis PotamitisTel: +30 (210) 338 0001Email: stathis.potamitis@potamitisvekris.comGeorge BersisTel: +30 (210) 338 0003Email: george.bersis@potamitisvekris.comActivities: Potamitisvekris has taken aleadership role in promoting restructuring inthe greek market, making use of revamps andlegal proceedings.HONG KONGAllen & Overy9th Floor, Three Exchange Square,Central, Hong Kong.Tel: +852 2974 7000Fax: +852 2974 6999Website: www.allenovery.comPartnersDavid KiddTel: +852 2974 7183Vicki LiuTel: +852 2974 7027Activities: Head of Asian restructuringpractice. Acts for banks, funds and borrowersin all aspects of distressed debt and otherassets.American Appraisal China Limited1506, Dah Sing Financial Centre,108 Gloucester Road, Wanchai, Hong Kong.Tel: +852 2511 5200Fax: +852 2511 9626Email: asianmailbox@american-appraisal.comWebsite: www.american-appraisal.com.hkPresident & Managing DirectorPatrick WuPrincipal, Business DevelopmentWilliam PoonActivities: Provide independent valuation ofentire businesses, real estate,machinery/equipment and intangible assetswith global compliance capability.Appleby2206-19 Jardine House, 1 Connaught Place,Central, Hong Kong.Tel: +852 2523 8123Fax: +852 2524 5548Email: hkinfo@applebyglobal.comManaging PartnerFrances WooEmail: fwoo@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.Asia Debt Management HK Ltd1008 ICBC Tower, 3 Garden Road, Central,Hong Kong.Tel: +852 2536 4567Website: www.admcap.comGeneral CounselAlexander ShaikEmail: as@admcap.comActivities: Their funds invest in companiesexperiencing financial and operationalproblems including banktrupcy, liquidation,receivership and court protection default ofvarious payment obligations.Bingham McCutchen LLPSuites 4901-4904, One Exchange Square,8 Connaught Place, Central Hong Kong,Hong Kong.Tel: +852 3182 1700Fax: +852 3182 1799Email: info@bingham.comWebsite: www.bingham.comPartnersF. Mark FucciNaomi MooreActivities: Provides extensive experience incross border insolvency, financial restructuringand special situations investments to financialinstitutions, including hedge, private equityand other investment fund managers, andcapital markets participants throughout theAsia-Pacific region.215

BMC Group22/F Nexxus Building, 41 Connaught RoadCentral, Central, Hong Kong.Tel: +852 8009 30643Website: www.bmcgroup.comActivities: <strong>Restructuring</strong>, class action,litigation, M&A, and investor communications.Superior technology, expertise and greatestcost efficiencies in data and claimsmanagement.Clifford Chance28th Floor, Jardine House,One Connaught Place, Hong Kong.Tel: +852 2825 8888Fax: +852 2825 8800Website: www.cliffordchance.com<strong>Restructuring</strong> & <strong>Insolvency</strong>, PartnersScott BacheTel: +852 2826 24<strong>13</strong>Email: scott.bache@cliffordchance.comNicholas DunstoneTel: +852 2825 8909Email: nicholas.dunstone@cliffordchance.comPartnerDonna WackerTel: +852 2826 3478Email: donna.wacker@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Deacons5th Floor, Alexandra House, 18 Chater Road,Central, Hong Kong.Tel: +852 2825 9211Fax: +852 2810 0431Email: hongkong@deacons.com.hkWebsite: www.deacons.com.hkHead of Finance & <strong>Insolvency</strong>DepartmentSimon DeaneTel: +852 2825 9209Email: simon.deane@deacons.com.hkPartner, Finance & <strong>Insolvency</strong>DepartmentPhilip GilliganTel: +852 2825 9716Email: philip.gilligan@deacons.com.hkActivities: Advises on all aspects ofinsolvency, restructuring and rescue to awide range of clients, including leading banksand accountancy firms.Deloitte32/F One Pacific Place, 88 Queensway,Hong Kong.Tel: +852 2852 1600Fax: +852 2541 1911Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesJoseph LoTel: +852 2852 1647Email: derlai@deloitte.com.hkActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Duan & Duan Law Firm HongKong Office, ChinaSuites 3416-3418, Jardine House,1 Connaught Place, Central, Hong Kong.Tel: +852 2973 0668Fax: +852 2525 0183Email: jasonju@duanduan.comWebsite: www.duanduan.comAttorney-at-lawJu Xiaolin (Jason Ju)Ferrier Hodgson Limited14/F Hong Kong Club Building,3A Chater Road, Central, Hong Kong.Tel: +852 2820 5600Fax: +852 2521 7632Email: fh@fh.com.hkWebsite: www.fh.com.hkExecutive DirectorsRod SuttonActivities: Provider of restructure andturnaround, financial advisory, forensics andcorporate recovery services in the AsiaPacific region.Hogan Lovells11/F, One Pacific Place, 88 Queensway,Hong Kong.Tel: +852 2219 0888Fax: +852 2219 0222Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnersNeil McDonaldAllan LeungActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.Latham & Watkins LLP41st Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.Tel: +852 2522 7886Fax: +852 2522 7006Website: www.lw.comPartnerJoe BevashContactsJohn HoughtonTel: +44 (20) 7670 1000Jan BakerTel: +1 (212) 906 1200Mitchell SeiderTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.Lynchpin BondholderManagement56-58 Wellington Street, Wellington Plaza402,Central, Hong Kong.Website: www.lynchpinbm.comManaging DirectorElizabeth WilsonTel: +850 2526 5404Email: ewilson@lynchpinbm.comVice PresidentKen AbelaTel: +850 2526 5406Email: kabela@lynchpinbm.comActivities: Bankholder identification; tender,consent and exchange agent, tabulation agent,fiscal agent, settlement services.Mayer Brown JSM16-19 Floors, Prince’s Building,10 Chater Road, Central, Hong Kong.Tel: +852 2843 2211Fax: +852 2845 9121Email: hongkong@mayerbrownjsm.comWebsite: www.mayerbrownjsm.comPartnersSteven MillerTel: +66 (2) 108 8565Email: steven.miller@mayerbrownjsm.comJohn MarsdenTel: +852 2843 2584Email: john.marsden@mayerbrownjsm.comActivities: The highly-regarded team acrossour Asian offices has acted in the mostcomplex restructuring and insolvency casesin the region.Minter Ellison15th Floor, Hutchison House,10 Harcourt Road, Central, Hong Kong.Tel: +852 2841 6888Fax: +852 2810 0235Website: www.minterellison.comHead of <strong>Insolvency</strong> & <strong>Restructuring</strong>PracticeAnthony HillEmail: anthony.hill@minterellison.comActivities: Total legal advisory service forHong Kong and Asia-Pacific multijurisdictionalinsolvencies and restructures,including security enforcement and assettracing.Nixon Peabody LLP50th Floor, Bank of China Tower,1 Garden Road, Central, Hong Kong.Tel: +852 9307 3900Fax: +852 2521 0220Website: www.nixonpeabody.comContact:David ChengEmail: dcheng@nixonpeabody.comO’Melveny & Myers LLPAIA Central, 1 Connaught Road Central,Hong Kong.Tel: +852 3512 2300Fax: +852 2522 1760Email: omminfo@omm.comWebsite: www.omm.comPartnerYi ZhangActivities: Offering major insolvency andrestructuring capabilities. Clients includefunds, major banks, insurance companies andother financial concerns, and entertainmentfirms.PricewaterhouseCoopers HongKong/China22nd Floor, Prince’s Building,10 Chater Road, Central, Hong Kong.Tel: +852 2289 8888Fax: +852 2869 6311Website:www.pwchk.com/home/eng/brs-index.htmlPartnersTed OsbornTel: +852 2289 2299Email: t.osborn@hk.pwc.comVictor JongTel: +86 (21) 2323 3650Email: victor.yk.jong@cn.pwc.comAnthony BoswellTel: +852 2289 2455Email: anthony.boswell@hk.pwc.comActivities: Over 70 specialists in Chinainvolved in business reviews, distressed M&A,NPL advisory and formal insolvency andreceivership appointments.Roland Berger StrategyConsultants Hong Kong Ltd.19/F, Two International Finance Centre,8 Finance Street, Hong Kong.Tel: +852 2251 8823Fax: +852 2251 1818Website: www.rolandberger.comPartnerQi WuTel: +86 (10) 844000 88608Email: qi_wu@cn.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.216

Simmons & Simmons<strong>13</strong>th Floor, One Pacific Place, 88 Queensway,Hong Kong.Tel: +852 2868 1<strong>13</strong>1Fax: +852 2810 5040Email:richard.mckeown@simmons-simmons.comWebsite: www.simmons-simmons.comPartnersRichard McKeownRobert LewingtonActivities: All aspects of rescues,reconstructions, receiverships, administration,liquidations and international insolvencies.SJ Berwin LLP3205 Lippo Centre, Tower Two,89 Queensway, Hong Kong.Tel: +852 2186 3000Fax: +852 2186 3088Email: east.asia@sjberwin.comSkadden, Arps, Slate, Meagher &Flom42/F, Edinburgh Tower, The Landmark,15 Queen’s Road Central, Hong Kong.Tel: +852 3740 4700Fax: +852 3740 4727Website: www.skadden.comPartnersAlan G. SchiffmanEdward LamJonathan B. StoneAlec P. TracyActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.SNR Denton HK LLP inassociation with Brandt Chan &PartnersSuite 3201, Jardine House,1 Connaught Place, Central, Hong Kong.Tel: +852 2523 1819Fax: +852 2868 0069Website: www.snrdenton.comStandard & Poor’sSuite 3003, The Landmark, Edinburgh Tower,15 Queens Road Central, Hong Kong.Tel: +852 2533 3500Fax: +852 2533 3566Tanner De Witt1806 Tower Two, Lippo Centre,89 Queensway, Hong Kong.Tel: +852 2573 5000Fax: +852 2802 3553Email: general@tannerdewitt.comWebsite: www.tannerdewitt.comPartnersIan De WittEmail: iandewitt@tannerdewitt.comRobin DartonEmail: robindarton@tannerdewitt.comActivities: Tanner De Witt acts forinsolvency practitioners, creditors, directors,shareholders, companies and individualsfacing cash flow difficulties.Walkers15th Floor, Alexandra House,18 Chater Road, Central, Hong Kong.Tel: +852 2284 4566Fax: +852 2284 4560Email: info@walkersglobal.comWebsite: www.walkersglobal.comPartnerFraser HernActivities: Highly regarded and integratedglobal team delivering informed legal supportacross the spectrum of restructuringtransactions, whether contentious or out-ofcourt.White & Case9th Floor Central Tower, 28 Queen’s RoadCentral, Hong Kong.Tel: +852 2822 8700Fax: +852 2845 9070Website: www.whitecase.comPartnersJohn HartleyTel: +852 2822 0409Email: jhartley@whitecase.comJohn ShumTel: +852 2822 8748Email: jshum@whitecase.comAnna-Marie SlotTel: +852 2822 8752Email: aslot@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.HUNGARYChamber of Hungarian AuditorsSzinyei M. u. 8, H-1063 Budapest, Hungary.Tel: +36 (1) 473 4500Fax: +36 (1) 473 4510Email: mkvk@mkvk.huWebsite: www.mkvk.huPresidentDr. Janos LukacsTel: +36 (1) 473 4500Email: mkvk@mkvk.huContactBernadett MolnárTel: +36 (1) 473 4521Email: international@mkvk.huActivities: Self-governed public body ofauditors. National organisation with 5514members. Gives opinion on acts, developsrules, regulations, professional training,auditors’ education, exchange of information,maintains register, member of internationalorganisations (FEE, IFAC).DeloitteDozsa Gyorgy ut 84/C, Budapest, Hungary.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesBrad QuayleTel: +36 (1) 428 6867Email: brquayle@deloittece.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Faludi Wolf TheissKálvin tér 12-<strong>13</strong>, Kálvin Center, 4th floor,H-1085 Budapest, Hungary.Tel: +36 (1) 4848 800Fax: +36 (1) 4848 825Email: budapest@wolftheiss.comWebsite: www.wolftheiss.comDirectorZoltán FaludiEmail: zoltan.faludi@wolftheiss.comActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.NoerrFö utca 14-18, H-1011 Budapest, Hungary.Tel: +36 (1) 1224 0900Fax: +36 (1) 1224 0495Email: info@noerr.comWebsite: www.noerr.comContactDr. Zoltán NádasdyEmail: zoltan.nadasdy@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.OppenheimOppenheim Law Office, Karolyi Mihaly u. 12,H-1053 Budapest, Hungary.Tel: +36 (1) 486 2200Fax: +36 (1) 486 2201Email: office@oppenheim.huWebsite: www.oppenheim.huPatnersDr. Mihaly BarczaTel: +36 (1) 486 2271Email: mihaly.barcza@oppenheim.huDr. József Bulcsú FenyvesiTel: +36 (1) 486 2275Email: jozsef.fenyvesi@oppenheim.huActivities: A group of dynamic andinnovative lawyers providing advice on allareas of Hungarian business law.PricewaterhouseCoopersWesselényi utca 16, Budapest,H-1077 Hungary.Tel: +36 (1) 461 9100Fax: +36 (1) 461 9101Email: info@hu.pwc.comWebsite: www.pwc.huCEOGeorge JohnstoneTel: +36 (1) 461 9696Email: george.johnstone@hu.pwc.comPartner, AdvisoryMiklós FeketeTel: +36 (1) 461 9242Email: miklos.fekete@hu.pwc.comActivities: Assist clients to successfullydevelop and perform outstandingrestructurings. The business recoveryServices include – amongst others –development and management the full-scoperestructuring process from independantbusiness reviews through distressed M&A,strategic advisory, and turnaroundmanagement.Radnóczy & Mészáros NörrStiefenhofer LutzFö utca 14-18, H-1011 Budapest, Hungary.Tel: +36 (6) 1224 0900Fax: +36 (6) 1224 0495Email: info@noerr.comWebsite: www.noerr.comOffice ManagerDr. Alexander BirnstielEmail: alexander.birnstiel@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.Réczicza White & Case LLPAndrássy ut 11, H-1061 Budapest, Hungary.Tel: +36 (1) 488 5200Fax: +36 (1) 488 5299Website: www.whitecase.comPartnersIstvan RecziczaEmail: ireczicza@whitecase.comGergely HorváthTel: +36 (1) 488 5258Email: ghorvath@whitecase.com217

Activities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Roland Berger StrategyConsultants Kft.Sas utca 10-12, H-1051 Budapest, Hungary.Tel: +36 (1) 301 7070Fax: +36 (1) 353 2434Website: www.rolandberger.huPrinicipalFrigyes SchannenTel: +36 (1) 301 7077Email:frigyes_schannen@hu.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Squire Sanders (US) LLPRoosevelt Irodaház Széchenyi István tér 7-8,Budapest H-1051, Hungary.Tel: +36 (1) 428 7111Fax: +36 (1) 428 7100Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsCsaba VariArtur TamasiNora SzigetiActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Szecskay Attorneys at LawKossuth tér 16-17, H-1055 Budapest,Hungary.Tel: +36 (1) 472 3000Fax: +36 (1) 472 3001Email: info@szecskay.comWebsite: www.szecskay.comManaging PartnerDr. András SzecskayAttorneys at LawDr. Judit BudaiDr. Hedi BozsonyikActivities: Advised several companies intheir merger, de-merger and winding up, aswell as companies and creditors inconnection with liquidation proceedings.Weil, Gotshal & MangesSzabadság tér 7, Bank Center, 8th Floor,H-1054 Budapest, Hungary.Tel: +36 (1) 301 8900Fax: +36 (1) 301 8901Website: www.weil.comManaging PartnerDavid DederickEmail: david.dederick@weil.comPartner, Head of Banking & FinanceCapital Markets PracticesKonrád SieglerEmail: konrad.siegler@weil.comActivities: Advise on all aspects ofbankruptcy and restructuring matters,including creditor and debtorrepresentations, distressed transactions andlitigation matters.ICELANDLOGOS Legal ServicesEfstaleiti 5, IS-103 Reykjavik, Iceland.Tel: +354 5 400 300Fax: +354 5 400 301Email: logos@logos.isWebsite: www.logos.isManaging PartnerGunnar SturlusonINDIADeloitteMaker Tower ‘E’ Wing, 4th Floor,Cuffe Parade, Mumbai, 400 005 India.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesDeepak NettoTel: +91 (22) 6622 0506Email: dnetto@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Standard & Poor’sCRISIL House, Cts Number 15 D, CentralAvenue, 8th Floor, Hiranandani Business Park,Powai Mumbai 400076, India.Tel: +91 (22) 3342 3000Fax: +91 (22) 3342 8088Standard & Poor’sW. 101 Sunrise Chambers, 22 Ulsoor Road,Bangalore 560 042, India.Tel: +91 (80) 2558 0899Fax: +91 (80) 2559 4801Syndicate BankInternational Division, Maker Tower-F,2nd Floor, Cuffe Parade, Colaba,Mumbai 400005, India.Tel: +91 (22) 2215 4648Fax: +91 (22) 2218 1622Email: idmumbai@syndicatebank.co.inWebsite: www.syndicatebank.co.inGeneral ManagerP. M. VasantharajanTel: +91 (22) 2218 1276Email: pmvasantharajan@syndicatebank.co.inDeputy General ManagerV. GanesanTel: +91 (22) 2215 1480Email: vganesan@syndicatebank.co.inActivities: Commercial banking activitiessuch as trade finance, treasury operations,dealing in cross currency, derivatives andsecurities.INDONESIABlake Dawson, in association withOentoeng, Suria & PartnersLevel 37, Equity Tower, Sudirman CentralBusiness District, Jalan Jenderal Sudirman Kav.52-53, Jakarta Selatan 12190, Indonesia.Tel: +62 (21) 2996 9200Fax: +62 (21) 2903 5360Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.DeloitteThe Plaza Office Tower, 32nd Floor, Jl. M. H.Thamrin Kav 28-30, Jakarta 10350, Indonesia.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesClaudia Lauw Lie HoengTel: +62 (21) 299 23100 ext. 33999Email: clauw@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.PT Ferrier HodgsonWorld Trade Center, Jalan Jenderal SudirmanKav. 29-31, Jakarta 12920, Indonesia.Tel: +62 (21) 521 1658Fax: +62 (21) 521 1659Email: fh-indonesia@ferrierhodgson.co.idWebsite: www.ferrierhodgson.comDirectorRobert JollyActivities: Providers of restructure andturnaround, corporate advisory, capital rising,financial due diligence and forensicaccounting services in Asia Pacific.IRELANDA&L GoodbodyInternational Financial Services Centre,North Wall Quay, Dublin 1, Ireland.Tel: +353 (1) 649 2000Fax: +353 (1) 649 2649Website: www.algoodbody.comPartnersDavid BaxterEmail: dbaxter@algoodbody.comMark TraynorEmail: mtraynor@algoodbody.comActivities: An experienced corporaterecovery and insolvency team with a widerangingclient base from domestic andinternational financial institutions toinsolvency practitioners.Arthur CoxEarlsfort Centre, Earlsfort Terrace,Dublin 2, Ireland.Tel: +353 (1) 618 0000Fax: +353 (1) 618 0618Email: mail@arthurcox.comWebsite: www.arthurcox.comPartner and Head of Corporate Recovery& <strong>Insolvency</strong> GroupWilliam DayTel: +353 (1) 618 0509Email: william.day@arthurcox.comPartnerBrendan CooneyTel: +353 (1) 618 0576Activities: Leading Irish insolvency practiceadvising on liquidations, examinerships,receiverships, restructurings. Arthur Cox actsfor insolvency practitioners, banks, NAMAdebtors, currently advising EIRCOM.218

Baker Tilly Ryan GlennonTrinity House, Charleston Road,Ranelagh, Dublin 6, Ireland.Tel: +353 (1) 496 5388Email: info@bakertillyrg.ieWebsite: www.bakertillyrg.ieManaging PartnerJohn GlennonTel: +353 (1) 499 5221Email: jglennon@bakertilyrg.ieConsulting PartnerGeorge MaloneyTel: +353 (1) 499 5208Email: gmaloney@bakertillyrg.ieActivities: Providers of corporate financial,insolvency and corporate restructuringservices and acts as corporate advisors toclients in both public and private sectors.Deloitte30 Earlsfort Terrace, Dublin 2, Ireland.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesDavid CarsonTel: +353 (1) 417 25<strong>13</strong>Email: dcarson@deloitte.ieActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Eugene F. Collins SolicitorsTemple Chambers, 3 Burlington Road,Dublin 4, Ireland.Tel: +353 (1) 202 6400Fax: +353 (1) 667 5200Email: dsmith@efc.ieWebsite: www.efc.ieHead of Corporate RecoveryDoug SmithPartner, Corporate RecoveryBarry O’NeillActivities: Bankruptcy, companyrestructuring and schemes of arrangement,court liquidation, creditor’s meetings,examinerships and protection order,receiverships, voluntary liquidations.EvershedsOne Earlsfort Centre, Earlsfort Terrace,Dublin 2, Ireland.Tel: +353 (1) 664 4200Fax: +353 (1) 664 4300Email: info@eversheds.ieWebsite: www.eversheds.iePartner, <strong>Insolvency</strong> & <strong>Restructuring</strong>Norman FitzgeraldTel: +353 (1) 664 4239Email: normanfitzgerald@eversheds.iePartnerNeil O’MahonyTel: +353 (1) 664 4292Email: neilomahony@eversheds.ieContactRay LambeTel: +353 (1) 664 4263Email: raymondlambe@eversheds.ieActivities: Act for accounting professionals,banks, equity investors, creditors andbusinesses in restructuring and insolvencyprocesses including liquidations, receivershipsand examinerships.Friel Stafford44 Fitzwilliam Place, Dublin 2, Ireland.Tel: +353 (1) 661 4066Fax: +353 (1) 661 4145Email: jim.stafford@frielstafford.ieWebsite: www.frielstafford.ieManaging PartnerJim StaffordContactTom MurrayEmail: tom.murray@frielstafford.ieActivities: Provides expert advice andservices to overseas practitionersundertaking restructuring work in Ireland.Grant Thornton24-26 Quay, Dublin 2, Ireland.Tel: +353 (1) 6805 805Fax: +353 (1) 6805 806Email: info@grantthornton.ieWebsite: www.grantthornton.ieManaging DirectorPaul RaleighHead of Specialist Advisory ServicesPaul McCannEmail: paul.mccann@grantthornton.ieActivities: A leading provider of insolvencyand corporate recovery solutions, with oneof the largest dedicated Recovery &Reorganisation teams in Ireland.Holohan SolicitorsSuite 319, The Capel Building,St. Mary’s Abbey, Dublin 7, Ireland.Tel: +353 (1) 872 7120Fax: +353 (1) 430 0911Website: www.holohanlaw.comPrincipalBill HolohanEmail: bill@billholohan.iePartnerJohn LaneEmail: john@billholohan.ieSenior AssociatesAmy ShineEmail: amy@billholohan.ieNiamh MuldoonEmail: niamh@billholohan.ieActivities: Niche firm providing legalservices by way of assistance/ representation.Co-Authors “Bankruptcy Law & Practice inIreland” & “<strong>Insolvency</strong> Law”‘.Holohan SolicitorsWater-View House, 16 Sundays Well Road,Cork, Ireland.Tel: +353 (1) 430 0374Fax: +353 (1) 430 0911Website: www.holohanlaw.comPrincipalBill HolohanEmail: bill@billholohan.iePartnerJohn LaneEmail: john@billholohan.ieSenior AssociatesAmy ShineEmail: amy@billholohan.ieNiamh MuldoonEmail: niamh@billholohan.ieActivities: Niche firm providing legalservices by way of assistance/representation.Co-Authors “Bankruptcy Law & Practice inIreland” & “<strong>Insolvency</strong> Law”.Kavanagh FennellSimmonscourt House, Simmonscourt Road,Ballsbridge, Dublin 4, Ireland.Tel: +353 (1) 206 0800Fax: +353 (1) 206 0801Email: info@kavanaghfennell.ieWebsite: www.kavanaghfennell.ieSenior PartnerTom KavanaghPartnersKen FennellDavid Van DesselActivities: Corporate recovery, insolvencyand business advisory services.Mason Hayes+CurranSouth Bank House, Barrow Street,Dublin 4, Ireland.Tel: +353 (1) 614 5000Fax: +353 (1) 614 5001Website: www.mhc.iePartnersMaurice PhelanDeclan BlackTel: +353 (1) 614 5017Email: dblack@mhc.ieSenior AssociateJudith RiordanTel: +353 (1) 614 5201Email: jriordan@mhc.ieActivities: Irish law firm with wideexperience of advising foreign and Irishclients on all aspects of Irish insolvency law.Matheson Ormsby Prentice,Solicitors70 Sir John Rogerson’s Quay,Dublin 2, Ireland.Tel: +353 (1) 232 2000Fax: +353 (1) 232 3333Email: mop@mop.ieWebsite: www.mop.ieMananging PartnerLiam QuirkeEmail: liam.quirke@mop.iePartnersRoderic EnsorEmail: rod.ensor@mop.ieTony O’GradyActivities: Advises its national andinternational clients on corporaterestructuring and insolvency issues and hasextensive cross-border insolvencyexperience. Acting for NAMA in relation tothe examinership of the McInerney Group,various banks in relation to a number ofreceiverships and examinerships includingPierse Construction and Linen Supply. Alsoadvised Deloitte, PWC, KPMG and Ernst &Young in various liquidations andreceiverships.McCann FitzGeraldRiverside One, Sir John Rogerson’s Quay,Dublin 2, Ireland.Tel: +353 (1) 829 0000Fax: +353 (1) 829 0010Email: inquiries@mccannfitzgerald.ieWebsite: www.mccannfitzgerald.ieHead of <strong>Restructuring</strong>Jane MarshallTel: +353 (1) 607 <strong>13</strong>09Email: jane.marshall@mccannfitzgerald.iePartnerMichael MurphyTel: +353 (1) 611 9142Email: michael.murphy@mccannfitzgerald.ieActivities: Specialise in insolvency issues,restructuring and corporate rescue, advisingcompanies with overseas interests, receivers,liquidators, examiners, creditors and financialinstitutions.PricewaterhouseCoopersOne Spencer Dock, North Wall Quay,Dublin 1, Ireland.Tel: +353 (1) 792 6000Website: www.pwc.com.iePartnerBilly O’RiordanTel: +353 (1) 792 8592Email: billy.oriordan@ie.pwc.comDirectorDeclan McDonaldTel: +353 (1) 792 6092Email: declan.mcdonald@ie.pwc.comActivities: Leading practice providingcorporate recovery and insolvency services.Extensive experience in all aspects ofbusiness restructuring and distressedcorporates.219

WhitneyMoore, SolicitorsWilton Park House, Wilton Place,Dublin 2, Ireland.Tel: +353 (1) 611 0000Fax: +353 (1) 611 0090Email: ecomms@whitneymoore.ieWebsite: www.whitneymoore.ieManaging PartnerStephen WalkerEmail: stephen.walker@whitneymoore.ieHead of <strong>Insolvency</strong>Frank O’ReillyEmail: frank.oreilly@whitneymoore.ieActivities: Acting for liquidators, receivers,examiners, banks and creditors in insolvency,security and related matters.ISLE OF MANAppleby (Isle of Man) LLC.33-37 Athol Street, Douglas,IM1 1LB, Isle of Man.Tel +44 (1624) 647 647Fax +44 (1624) 620 992Email: iom@applebyglobal.comContactSean DowlingEmail: sdowling@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.PKF (UK) LLPPO Box 16, Analyst House, 20-26 Peel Rd,Douglas, IM99 1AP, Isle of Man.Tel: +44 (1624) 652 000Fax: +44 (1624) 652 001Email: mail@pkfiom.comWebsite: www.pkfiom.comPartnerPaul SeawardTel: +44 (1624) 673 811Email: paul.seaward@pkfiom.comActivities: Advisers on all forms ofinsolvency and restructuring.ISRAELCaspi & Co33 Yavetz Street, Tel Aviv 65258, Israel.Tel: +972 (3) 796 1220Fax: +972 (3) 796 <strong>13</strong>20Email: office@caspilaw.comWebsite: www.caspilaw.comPartnerNorman Menachem FederEmail: nmf@caspilaw.comHerzog Fox & NeemanAsia House, 4 Weizmann Street,Tel Aviv 64239, Israel.Tel: +972 (3) 692 2020Fax: +972 (3) 696 6464Email: hfn@hfn.co.ilWebsite: www.hfn.co.ilSenior PartnersEhud SolAmir SerayaContactAsher DovevActivities: The bankruptcy, insolvency andreorganisation department provides advice toa broad spectrum of businesses andindustries on a full range of corporaterestructuring issues and insolvencyproceedings.Standard & Poor’s12 Abba Hillel Silver Street, Ramat Gat,Tel Aviv 52506, Israel.Tel: +972 (3) 753 9701Fax: +972 (3) 753 9710Yaacov Salomon, Lipschütz & Co64 Hameginim Avenue, Haifa 33264, Israel.Tel: +972 (4) 814 0500Fax: +972 (4) 855 7038Email: david-goldenblatt@ysl-law.comWebsite: www.ysl-law.comPartnersDavid GoldenblattJacov RivanovitchContactMoshe LipschützActivities: Handles all insolvency mattersfor Israel’s second largest bank and manyother insolvency and restructuring matters.Yaacov Salomon, Lipschütz & Co.7 Abba Hillel Silver Street,PO Box 3424 Ramat-Gan 52522, Israel.Tel: +972 (3) 575 7712Fax: +972 (3) 575 7725Email: office-tel-aviv@ysl-law.comPartnerRaanan RawitzEmail: raananr@ysl-law.comContactHanoch MorgensternEmail: hanochm@ysl-law.comActivities: Handles all insolvency mattersfor Israel’s second largest bank and manyother insolvency and restructuring matters.ITALYBonelli Erede Pappalardo StudioLegaleVia Barozzi 1, I-<strong>2012</strong>2 Milan, Italy.Tel: +39 (02) 771 <strong>13</strong>1Fax: +39 (02) 7711 3260Website: www.beplex.comPartnersAndrea De TomasEmail: andrea.detomas@beplex.comGiovanni DomenichiniTel: +39 (010) 846 2322Email: giovanni.domenichini@beplex.comActivities: <strong>Restructuring</strong> of distressedcompanies, advising creditors or debtors oninsolvency proceedings and on a wide rangeof in court and out of court restructurings.Clifford Chance Studio LegaleAssociatoVia Sistina, 4, I-00187 Rome, Italy.Tel: +39 (06) 422 911Fax: +39 (06) 42291 200Website: www.cliffordchance.comCounselCarlo GiampaolinoEmail: carlo.giampaolino@cliffordchance.itActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.DeloitteVia Tortona 25, I-20144 Milan, Italy.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesMassimo CapuaniTel: +39 (02) 8332 5015Email: mcapuani@deloitte.itActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Eidos PartnersVia S. Spirito 14, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 8597 9211Fax: +39 (02) 8597 9222Email: info@eidospartners.comWebsite: www.eidospartners.comContactsSimone DragoneMarco ClericiActivities: Italian advisory firm, leader inadvising companies and creditors on Europe’smost complex transactions.Goffredo CaverniVia del Castello No. 5, Pugnano I-56017 SanGiuliano Terme, Pisa, Italy.Tel: +39 (050) 533 076Fax: +39 (050) 533 384Email: goffredocaverni@alice.itContactsGoffredo CaverniNicole ChauvetActivities: Bankruptcy officer and charteredaccountant.Hogan Lovells Studio LegaleVia Santa Maria alla Porta 2,I-<strong>2012</strong>3 Milan, Italy.Tel: +39 (02) 720 2521Fax: +39 (02) 7202 5252Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnerAntonio Di PasqualeActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.Hogan Lovells Studio LegalePiazza Venezia 11, I-00187 Rome, Italy.Tel: +39 (06) 675 8231Fax: +39 (06) 6758 2323Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comKPMG Advisory S.p.A.Via Vittor Pisani, 27, I-<strong>2012</strong>4 Milan, Italy.Tel: +39 (02) 6763 2682Fax: +39 (02) 6764 3864PartnerFederico BonanniTel: +39 (34) 8308 0714Email: fbonanni@kpmg.itActivities: Leading financial and industrialadvisor for banks and corporates in therestructuring process.Latham & Watkins LLPCorso Matteotti 22, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 3046 2000Fax: +39 (02) 3046 2001Website: www.lw.comPartnersAndrea NovareseMaria Cristina StorchiRiccardo AgostinelliContactsJohn HoughtonTel: +44 (20) 7710 1000Mitchell SeiderTel: +1 (212) 906 1200Jan BakerTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.220

Lombardi Molinari e AssociatiStudio LegaleVia Andegari 4/A, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 896 221Fax: +39 (02) 8962 2333Email: info@lmlaw.itWebsite: www.lmlaw.itPresident & Co-Managing PartnerGiuseppe LombardiEmail: g.lombardi@lmlaw.itCo-Managing PartnerUgo MolinariEmail: u.molinari@lmlaw.itActivities: Lombardi Molinari e Associati isan independent law firm providing legaladvice mainly in the areas of corporate andcommercial law, advising on litigation andarbitration as well as on corporate andfinancial transactions.Pirola Pennuto Zei & AssociatiViale Castro Pretorio 122,I-00185 Rome, Italy.Tel: +39 (06) 570 281Fax: +39 (06) 570 282 739Website: www.pirolapennutozei.itHead of <strong>Insolvency</strong>Giorgio CherubiniTel: +39 (06) 570 282 656Email: giorgio.cherubini@studiopirola.comManaging PartnerMassimo CremonaTel: +39 (02) 669 951Activities: Legal counsel to companies infinancial difficulties; representation ofcreditors in bankruptcy proceedings; legalassistance in composition with creditors andrescue plans.Roland Berger StrategyConsultants S.r.l.Via Sirtori 32, I-<strong>2012</strong>9 Milan, Italy.Tel: +39 (02) 295 011Fax: +39 (02) 2952 4837Website: www.rolandberger.comPartnerRoberto CrapelliTel: +39 (02) 295 01235Email: roberto_crapelli@it.rolandberger.comPrincipalAndrea MarinoniTel. +39 (02) 295 01296Email: andrea_marinoni@it.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Simmons & SimmonsCorso Vittorio Emanuele 1,I-<strong>2012</strong>2 Milan, Italy.Tel: +39 (02) 725 051Fax: +39 (02) 7250 5505Website: www.simmons-simmons.comPartnerFabrizio DottiTel: +39 (02) 7250 5518Email: fabrizio.dotti@simmons-simmons.comLawyerFrancesco MaruffiTel: +39 (02) 7250 5566Email:francesco.maruffi@simmons-simmons.comActivities: All aspects of court and out-ofcourtrestructurings, also in relation tointernational insolvencies.Simmons & SimmonsVia di San Basilio 72, I-00187 Rome, Italy.Tel: +39 (06) 809 551Fax: +39 (06) 8095 5955Website: www.simmons-simmons.comPartnerCristina PagniEmail: cristina.pagni@simmons-simmons.comContactDavid Maria SantoroEmail:davidmaria.santoro@simmons-simmons.comActivities: All aspects of court and out-ofcourtrestructurings, also in relation tointernational insolvencies.SJ Berwin LLPCorso Matteotti 3, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 3657 5701Fax: +39 (02) 3657 5757Email: milan@sjberwin.comStandard & Poor’sVicolo San Giovanni sul Muro 1/3/5,I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 7211 1201Fax: +39 (02) 7211 1222Studio Corno - AvvocatiVia Mameli 11, I-20851 Lissone, Milan, Italy.Tel: +39 (039) 245 6792Fax: +39 (039) 245 8018Email: legale@studiocorno.itWebsite: www.studiocorno.itAdvocatsGiorgio CornoEmail: giorgio.corno@studiocorno.itRoberta BonariEmail: roberta.bonari@studiocorno.itMarioPalma BusnelliEmail: mariopalma.busnelli@studiocorno.itStefanie CaltebianoEmail: stefanie.caltebiano@studiocorno.itActivities: Advice to national andinternational debtors and creditors ininsolvency proceedings and restructuring.Studio GeriniCorso Monforte No. 38, I-<strong>2012</strong>2 Milan, Italy.Tel: +39 (02) 796 619/814Fax: +39 (02) 794 787Email: segreteria@studiogerini.itContactsPaolo GeriniMarzio ValerioActivities: Cooperation with the officialreceiver of the bankruptcy of an Italian-basedinternational off-shore oil-piping and shippingcompany.Studio Legale Biamonti9, Lungotevere Michelangelo,I-00192 Rome, Italy.Tel: +39 (06) 326 9651Fax: +39 (06) 326 96543Email: studiobiamonti@studiobiamonti.itWebsite: www.studiobiamonti.itSenior PartnerLuigi BiamontiPartnerAndrea Lo GaglioStudio Legale Delfino e AssociatiWillkie Farr and Gallagher LLPVia M. Barozzi 2, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 763 631Fax: +39 (02) 763 63636Email: mdelfino@willkie.comWebsite: www.willkie.comPartnerMaurizio DelfinoActivities: Corporate restructuring, mergersand acquisitions, public securities offerings,private equity and venture capital, privateplacement and bank lending.Studio Legale Delfino e AssociatiWillkie Farr and Gallagher LLPVia di Ripetta 142, I-00186 Rome, Italy.Tel: +39 (06) 686 361Fax: +39 (06) 686 36363Email: mdelfino@willkie.comWebsite: www.willkie.comPartnerMaurizio DelfinoActivities: Corporate restructuring, mergersand acquisitions, public securities offerings,private equity and venture capital, privateplacement and bank lending.Studio Legale SuttiVia Montenapoleone 8, I-<strong>2012</strong>1 Milan, Italy.Tel: +39 (02) 762 041Fax: +39 (02) 7620 4805Email: maildesk@sutti.comWebsite: www.sutti.comPartnerRobertó SpeltaContactLivia OguioActivities: International corporate recovery,advising multi-national reorganisations,corporate restructuring, debt restructuring,creditors’ rights and compliance issues.Todtman, Nachamie, Spizz &Johns, P.C.Via Giuseppe Mazzini, 20, I-<strong>2012</strong>3 Milan, Italy.Tel: +39 (02) 876 242Fax: +39 (02) 7005 09944Email: info@tnsj-law.comWebsite: www.tnsj-law.comCo-Chairman of Corporate, <strong>Restructuring</strong>,Bankruptcy & Creditors’ RightsBarton NachamieTel: +1 (212) 754 9400 ext. 4<strong>13</strong>Email: bnachamie@tnsj-law.comPartnerJanice B. GrubinTel: +1 (212) 754 9400 ext. 423Email: jgrubin@tnsj-law.comActivities: The firm is a general practicebusiness law firm. Its global footprint isfacilitated through its active participation inL.A.W. a worldwide organisation with over100 member law firms.JAPANAbe, Ikubo & KatayamaFukuoka Building, 2-8-7 Yaesu, Chuo-ku,Tokyo 104-0028, Japan.Tel: +81 (3) 3273 2600Fax: +81 (3) 3273 2033Email: katayama@aiklaw.co.jpSenior PartnerEiji KatayamaContactsMasahiro OtsukiEmiko MakiActivities: Practical experience in crossborderinsolvency.Atsumi & PartnersFukoku Seimei Building, 2-2 Uchisaiwaicho2-chome, Chiyoda-ku, Tokyo 100-0011, Japan.Tel: +81 (3) 5501 2111Fax: +81 (3) 5501 2211Email: info@aplaw.jpWebsite: www.aplaw.jpManaging PartnerHiroo AtsumiVice Managing PartnersSetsuko YufuHiroki MoriContactBonni L. DixonActivities: Works closely with clients invarious insolvency cases and restructuringtransactions.221

Bingham McCutchen Murase,Sakai Mimura Aizawa - ForeignLaw Joint Enterprise4-3-<strong>13</strong> Toranomon, 4th Floor, Minato-ku,Tokyo 105-0001, Japan.Tel: +81 (3) 6721 3111Fax: +81 (3) 6721 3112Website: www.bingham.com/tokyoManaging PartnerHideyuki SakaiPartnerMitsue AizawaTel: +81 (3) 6721 3<strong>13</strong>2Email: mitsue.aizawa@bingham.comActivities: The Tokyo office is thepreeminent law firm in handling major crossborderand domestic restructurings relatedto Japan. <strong>Global</strong> financial institutions andcorporations use them for representation inthe most difficult and complex transactions.Blake DawsonTokyo Ginko Kyokai Building, 15th Floor,1-3-1 Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan.Tel: +81 (3) 5293 8228Website: www.blakedawson.comNational Practice Head, <strong>Insolvency</strong> &<strong>Restructuring</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartnerRay MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.BMC Group6th Floor, Tokyo Building, 1-2-10 Nihombashi,Chou-ku, Tokyo, Japan.Tel: +81 (3) 4588 6706Website: www.bmcgroup.comActivities: <strong>Restructuring</strong>, class action,litigation, M&A, and investor communications.Superior technology, expertise and greatestcost efficiencies in data and claimsmanagement.Clifford Chance7th Floor, Akasaka Tameike Tower, 2-17-7Akasaka, Minato-ku, Tokyo 107-0052, Japan.Tel: +81 (3) 5561 6600Fax: +81 (3) 5561 6699Website: www.cliffordchance.comPartnersPeter KilnerTel: +81 (3) 5616 6619Email: peter.kilner@cliffordchance.comMasayuki OkamotoEmail:masayuki.okamoto@cliffordchance.comCounselYemi TepeTel: +81 (3) 5561 6626Email: yemi.tepe@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.DeloitteShin Tokyo Building, 3-3-1 MarunouchiChiyoda-ku, Tokyo 100-0005, Japan.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesTsutomu KishiTel: +81 (3) 62<strong>13</strong> 1122Email: tsutomu.kishi@tohmatsu.co.jpActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Hashidate Law Office7th Floor, The Imperial Hotel Tower,1-1 Uchisaiwai-cho 1-chome, Chiyoda-ku,Tokyo 100-0011, Japan.Tel: +81 (3) 3504 3800Fax: +81 (3) 3504 1009Website: www.hashidatelaw.comManaging PartnerKenji HashidateEmail: kenjihashidate@hashidatelaw.comPartnerKouhei YabutaActivities: Performing restructuringtransactions involving new investors; acting asa liquidator of insolvent companies; acting forexisting investors in recovery.Hogan Lovells Horitsu Jimusho15th Floor, Daido Seimei, KasumigasekiBuilding, 1-4-2 Kasumigaseki, Chiyoda-ku,Tokyo 100-00<strong>13</strong>, Japan.Tel: +81 (3) 5157 8200Fax: +81 (3) 5157 8210Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comKamano Sogo Law OfficesNBF Hibiya Building, 1-1-7 Uchisaiwaicho,Chiyoda-ku, Tokyo 100-0011, Japan.Tel: +81 (3) 3539 <strong>13</strong>71Fax: +81 (3) 3539 <strong>13</strong>72Email: hkamano@kamanosogo.jpPartnersHiroyuki KamanoYoshikazu IshiharaActivities: A partner of the firm hassupervised the civil rehabilitation case ofMovie Television Co. which has engaged inthe global movie distribution business.KPMG ASPAC <strong>Restructuring</strong>Marunouchi Trust Tower N. 10F, 8-1Marunouchi 1 chome, Chiyoda-ku,Tokyo 100-0005, Japan.Tel: +81 (3) 5218 6700Fax: +81 (3) 5218 6799Email: fasmktg@jp.kpmg.comWebsite: www.kpmg.or.jp/english/index.htmlChairmanMasahiko ChinoTel: +81 (3) 5218 6788Email: masahiko.chino@jp.kpmg.comDeputy ChairmanEdward MiddletonTel: +852 3121 9833Email: edward.middleton@kpmg.com.hkMori Hamada & MatsumotoMarunouchi Park Building, 2-6-1 Marunouchi,Chiyoda-ku Tokyo 100-8222, Japan.Tel: +81 (3) 6212 8330Fax: +81 (3) 6212 8230Email: mhm_info@mhmjapan.comWebsite: www.mhmjapan.comPartnerMugi SekidoTel: +81 (3) 5223 7759Email: mugi.sekido@mhmjapan.comSenior AssociateKana ManabeTel: +81 (3) 5220 1829Email: kana.manabe@mhmjapan.comActivities: The firm acts extensively in alltypes of Japenese bankruptcy andreorganisation proceedings, including theJapanese aspects of multi-jurisdictionalproceedings.Nagashima Ohno & TsunematsuKioicho Building 3-12, Kioicho, Chiyoda-ku,Tokyo 102-0094, Japan.Tel: +81 (3) 3288 7000Fax: +81 (3) 52<strong>13</strong> 7800Email: info@noandt.comWebsite: www.noandt.comChairmanHisashi HaraManaging PartnerKenichi FujinawaPartner in charge of PRYuko TamaiNishimura & AsahiArk Mori Building, 1-12-32 Akasaka,Minato-ku, Tokyo, 107-6029 Japan.Tel: +81 (3) 5562 8500Fax: +81 (3) 5561 9711-9714Email: info@jurists.co.jpWebsite: www.jurists.co.jpManaging PartnerMasaki HosakaActivities: One of Japan’s premier fullservice law firms covering all aspects ofdomestic and international corporate activity.Roland Berger Ltd.ARK Mori Building, 23rd Floor, 1-12-32Akasaka, Minato-ku, Tokyo 107-6023 Japan.Tel: +81 (3) 3587 6660Fax: +81 (3) 3587 6670Website: www.rolandberger.comPartnerTakashi HiraiTel: +81 (3) 3587 6687Email: takashi_hirai@jp.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Skadden, Arps, Slate, Meagher &Flom LLP & AffiliatesIzumi Garden Tower, 21st Floor, 1-6-1Roppongi, Minato-ku, Tokyo 106-6021, Japan.Tel: +81 (3) 3568 2600Fax: +81 (3) 3568 2626Website: www.skadden.comPartnersMichael J. MiesMitsuhiro KamiyaActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.Standard & Poor’s28F, Marunouchi Kitaguchi Building,1-6-5 Marunouchi, Chiyoda-ku,Toyko 100-0005, Japan.Tel: +81 (3) 4550 8000Fax: +81 (3) 4550 8200Studio Legale Sutti2-17-<strong>13</strong> Asagaya-Kita, Suginami-ku,Tokyo 166-0001, Japan.Tel: +81 (3) 3310 0693Fax: +81 (3) 3310 0740Email: maildesk@sutti.comWebsite: www.sutti.comResponsible for Tokyo OfficeMasako NishinaActivities: International corporate recovery,advises multi-national reorganisations,corporate restructuring, creditor’s rights andcompliance issues.222

Tokyo Office of Yoon & Yang LLC9F, 904 Toranomonhousou Building,1-20-3 Nishi-Shinbashi, Minato-ku,Tokyo 105-0003, Japan.Tel: +81 (3) 5501 2550Fax: +81 (3) 5501 2080Email: idpark@yonyang.comWebsite: www.hwawoo.jpWhite & Case LLP, White & CaseLaw Offices (RegisteredAssociation)Marunouchi Trust Tower Main, 26th Floor,1-8-3 Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan.Tel: +81 (3) 6384 3300Fax: +81 (3) 3211 5252Website: www.whitecase.comPartnersToshio DokeiTel: +81 (3) 6384 3231Email: tdokei@whitecase.comGerald FujiiTel: +81 (3) 6384 3158Email: gfujii@whitecase.comTadao HoribeTel: +81 (3) 6384 3300Email: thoribe@whitecase.comTetsuya MorimotoTel: +81 (3) 6384 3175Email: tmorimoto@whitecase.comKoichiro OhashiTel: +81 (3) 6384 3151Email: kohashi@whitecase.comYuji OgiwaraTel: +81 (3) 6384 3156Email: yogiwara@whitecase.comShimon TakagiTel: +81 (3) 6384 3182Email: stakagi@whitecase.comCounselMika SuzukiTel: +81 (3) 6384 3154Email: msuzuki@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.KAZAKHSTANChadbourne & Parke LLPDostyk Business Center, 43 Dostyk Avenue,Fourth Floor, 050010 Almaty, Kazakhstan.Tel: +7 (727) 258 5088Fax: +7 (727) 258 8084Email: almaty@chadbourne.comWebsite: www.chadbourne.comManaging PartnerKenneth E. MackEmail: kmack@chadbourne.comActivities: Chadbourne & Parke LLP offers afull range of services in cross-borderbankruptcies and financial restructurings,business restructurings and insolvencies.SNR DentonKen Dala Business Centre 8th Floor,38 Dostyk Avenue Almaty 050010,Republic of Kazakhstan.Tel: +7 (727) 258 1950Fax: +7 (727) 258 1905Website: www.snrdenton.comWhite & Case Kazakhstan LLPDostyk Avenue 117/6, 050059 Almaty,Kazakhstan.Tel: +7 (727) 250 7491Fax: +7 (727) 250 7493Website: www.whitecase.comPartnerMaxim TelemtayevEmail: mtelemtayev@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.KENYADeloitteDeloitte Place, Waiyaki Way, Muthangari,PO Box 40092, Nairobi, GPO 00100, Kenya.Website: www.deloitte.comHead of <strong>Restructuring</strong> Services East AfricaHarveen GadhokeTel: +254 (20) 423 0000Email: hgadhoke@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.KUWAITInternational Legal Group inassociation with SNR Denton &Co.Al Tijaria Tower, Floor 12, Al Sour Street,Block 3, Al Murgab, Kuwait City, State ofKuwait.Tel: +965 2246 1840Website: www.snrdenton.comPartnerStuart CavetLATVIAAttorneys at Law BoreniusLacplesa 20A, LV-1011 Riga, Latvia.Tel: +371 (67) 201 800Fax: +371 (67) 201 801Email: advokati@borenius.lvWebsite: www.borenius.lvPartnersLauris LiepaTel: +371 (67) 201 811Email: lauris.liepa@borenius.lvGatis FlintersTel: +371 (67) 201 817Email: gatis.flinters@borenius.lvActivities: Legal advice on all issues ofinsolvency and restructuring, includingpreventive analysis, voluntary debtrestructuring and formal corporaterestructuring and bankruptcy proceedings.LITHUANIAAttorneys at Law BoreniusJ. Jasinskio Str. 16 A, 8th Floor, Vilnius,LT-01112 Lithuania.Tel: +370 (5) 264 9555Fax: +370 (5) 260 8327Website: www.borenius.ltManaging PartnerDaivis SvirinasTel: +370 (5) 251 4268Email: daivis.svirinas@borenius.ltPartnerZygimantas PaceviciusTel: +370 (5) 251 4272Email: zygimantas.pacevicius@borenius.ltActivities: Provide legal advice on all issuesof M&A and corporte, IP & IT, real estate &construction, dispute resolution.LUXEMBOURGBonn & Schmitt22-24, rives de Clausen, L-2165 Luxembourg.Tel: +352 27855Fax: +352 27855 855Email: mail@bonnschmitt.netWebsite: www.bonnschmitt.netPartnerL. NogueraTel: +352 27855 855Manager, Communication &AdministrationLiz LentzEmail: llentz@bonnschmitt.netActivities: Bankruptcy and insolvencycomprises one of Bonn & Schmitt’s corepractice areas. Regularly providescomprehensive advice on all bankruptcy andinsolvency issues to national and foreignclients, involved in several major internationalbank liquidation proceedings.Deloitte560, rue de Neudorf, L-2220 Luxembourg.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesMichael JJ. MartinTel: +352 451 452 449Email: michamartin@deloitte.luActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.DSM Avocats à la Cour2a Boulevard Joseph II, PO Box 2648,L-1026 Luxembourg.Tel: +352 2625 621Fax: +352 2625 622Email: contact@dmslegal.comWebsite: www.dmslegal.comPartnersMario Di StefanoEmail: mdistefano@dmslegal.comFrançois MoyseEmail: fmoyse@dsmlegal.comJérome BachEmail: jbach@dsmlegal.comAlban ColsonEmail: acolson@dsmlegal.comActivities: Corporate structuring, realestate, litigation, banking & finance.Etude Pierre Feltgen12-14 boulevard d’Avranches,L-1018 Luxembourg.Tel: +352 2664 841Fax: +352 2664 8485Email: info@feltgen.luActivities: Regularly acts as receiver orliquidator and also counsels creditors.223

OPF Partners291 Route d’Arlon, PO Box 603,L-2016 Luxembourg.Tel: +352 468383Fax: +352 468 484Email: info@opf-partners.comWebsite: www.opf-partners.comManaging PartnerFrédéric FeytenEmail: ffeyten@opf-partners.comPartner, Head of <strong>Restructuring</strong> &<strong>Insolvency</strong>Martine Gerber-LemaireEmail: mgerber@opf-partners.comActivities: The firm undergoes a broadrange of activities with respect torestructuring & insolvency includingbankruptcy proceedings and liquidations.PricewaterhouseCoopers S.a.r.l.400 route d’Esch, PO Box 1443,L-1014 Luxembourg.Tel: +352 4948 481Fax: +352 4948 482 900Email: jean-françois.kroonen@lu.pwc.comWebsite: www.pwc.comPartnerJean-François KroonenActivities: Extensive practical experiencesupporting troubled corporates and theirstakeholders.MALAYSIADeloitteLevel 19, Uptown 1, 1Jalan,5521/58 Kuala Lumpur, Malaysia.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesKum Choon MakTel: +60 (3) 7723 6522Email: mak@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Ferrier Hodgson MH SDN BHD22-M, Monteiro and Heng Chambers,Jalan Tun Sambanthan 3, 50470 Kuala Lumpur,Malaysia.Tel: +60 (3) 2273 6227Fax: +60 (3) 2273 7503Email: ferrier@fhmh.com.myWebsite: www.fh.com.auPartnersHeng Ji KengMichael Joseph MonteiroAndrew HengActivities: Provider of corporaterestructuring and turnaround, financial duediligence, forensic accounting and insolvencymanagement services.Kadir, Andri & Partners8th Floor, Menara Safuan, 80 Jalan Ampang,50450 Kuala Lumpur, Malaysia.Tel: +60 (3) 2078 2888Fax: +60 (3) 2078 8431Email: partner@kaaplaw.comWebsite: www.kaaplaw.comPartnersJulian Mahmud HashimEmail: jhashim@kaaplaw.comMak Lin KumEmail: lkmak@kaaplaw.comActivities: Advising including making courtapplications in relation to corporate and debtrestructurings, schemes of arrangements,receiverships, liquidations and other relatedmatters.Messrs Jeff Leong, Poon & WongB-11-8, Level 11, Megan Avenue II, Jalan YapKwan Seng, 50450 Kuala Lumpur, Malaysia.Tel: +60 (3) 2166 3225Fax: +60 (3) 2166 3227Email: jlpw@jlpw.com.myWebsite: www.jlpw.comSenior PartnersJeff LeongEmail: jeff.leong@jlpw.com.myKenny PoonEmail: kenny.poon@jlpw.com.myActivities: Corporate rescues of PN17companies; acting for white knights; advisingliquidators and receivers; takeovers; debtrestructurings and schemes of arrangements;corporate restructuring and re-listing inBursa Malaysia Securities Berhad (KualaLumpur Stock Exchange); sale and disposal ofdistressed assets and companies; conductinglegal due diligence exercises; investigationaudits and compliance.PricewaterhouseCoopers AdvisoryServices Sdn. Bhd.Level 10, 1 Sentral, Jalan Travers,Kuala Lumpur Sentral, PO Box 10192,50706 Kuala Lumpur, Malaysia.Tel: +60 (3) 2173 1188Fax: +60 (3) 2173 1288Website: www.pwc.com.myPartnersSan Peen LimTel: +60 (3) 2173 1233Email: san.peen.lim@my.pwc.comChui Sum LeeTel: +60 (3) 2173 <strong>13</strong>88Email: chui.sum.lee@my.pwc.comActivities: Specialising in distressed debtadvisory, their professionals assist creditorfinancial institutions and debtor companies toresolve their non-performing loans. Theyoffer a whole suite of services from recoveryformulation, to planning and execution. Theycarry out independent business reviews, debtrestructuring, cash flow monitoring, NPL saleand acts as receivers and liquidators.Shearn Delamore & Co.7th Floor, Wisma Hamzah-Kwong Hing,No. 1 Leboh Ampang, 50100 Kuala Lumpur,Malaysia.Tel: +60 (3) 2027 2727Fax: +60 (3) 2034 2763PartnerRabindra NathanTel: +60 (3) 2027 2812Email: rabindra@shearndelamore.comActivities: Act for local and foreign financialinstitutions in all types of banking andcorporate insolvency litigation and advisorywork. Also advise on insolvency relatedaspects of derivatives transactions.Standard & Poor’s17-7, The Boulevard, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur,Malaysia.Tel: +60 (3) 2284 8668Fax: +60 (3) 2283 6896MAURITIUSAppleby9th Floor, Medine Mews, La Chaussée Street,Port Louis, Mauritius.Tel: +230 203 4300Fax: +230 210 8792Email: info@applebyglobal.comWebsite: www.appleby.comContactMalcolm MollerEmail: mmoller@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.MEXICOChadbourne & Parke, S.C.Paseo de Tamarindos, No. 400-B Piso 22,Col. Bosques de las Lomas,05120 Mexico D.F., Mexico.Tel: +52 (55) 3000 0600Fax: +52 (55) 3000 0698Website: www.chadbourne.comManaging PartnerBoris OttoTel: +52 (55) 3000 0601Email: botto@chadbourne.comActivities: Chadbourne & Parke S.C. offers afull range of services in cross-borderbankruptcies and financial restructurings,business restructurings and insolvencies.Deloitte MexicoPaseo De la Reforma 505, Piso 28,Distrito Federal, Mexico.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesGerado Ortiz AvilaTel: +52 (55) 5080 6955Email: geortiz@deloittemx.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Gardere Wynne Sewell LLPTorre Esmeralda II, Blvd. Manuel A. CamachoNo. 36-1802, Lomas de Chapultepec, Mexico,D.F. 11000, Mexico.Tel: +52 (55) 5284 8540Fax: +52 (55) 5284 8569Website: www.gardere.comHeather & Heather S.C.Torre Arcos, Piso 10, Paseo de losTamarindos #400B, Bosque de las Lomas05120, México, D.F, Mexico.Tel: +52 (55) 2167 9690Website: www.heather.com.mxFounder & PartnerThomas S. HeatherMobile: +52 (155) 2737 6039Email: theather@heather.com.mxPartnersAndrew P. HeatherEmail: aheather@heather.com.mxThomas E. HeatherEmail: eheather@heather.com.mxSenior AssociatesMariana Campos ClasingEmail: mcampos@heather.com.mxAlejandra de la MoraEmail: adelamora@heather.com.mxAssociatesIgnacio DiaqueEmail: idiaque@heather.com.mxPierre Said NaderEmail: psaid@heather.com.mxJunior AssociatesJaime Ostos Rincon GallardoEmail: jostos@heather.com.mxJorge CervantesEmail: jcervantes@heather.com.mx224

Activities: Led by Thomas S. Heather, theyhave had a recognised practice in Mexico forover 35 years and have been singled out asleading performers in banking, corporategovernance, mergers and acquisitions, crossborderrestructurings and insolvency law.Their practice is recognised as an emergingleader in innovative solutions in disputeresolution and arbitration. Their broadnetwork with firms in Mexico and abroadallows them to serve their clients with apractical and effective approach to closingtransactions, size and complexitynotwithstanding.Oscos AbogadosJoaquin Gallo (antes Paseo del Rio) 53,Chimalistac, Coyoacán 04340, Mexico.Tel: +52 (55) 5550 2829Fax: +52 (55) 5550 2829Website: www.oscosabogados.com.mxGeneral Director, PartnerDario OscósEmail: doscos@oscosabogados.com.mxPartnerGerardo OscósEmail: goscos@oscosabogados.com.mxActivities: Cross-border insolvency.Reorganisation and liquidation. Workoutsettlements. Out-of-court prepackages.<strong>Insolvency</strong> mediation. <strong>Insolvency</strong> Arbitration.Oscos Abogados Law firm representsfinancial institutions, creditors as well asdebtors.Standard & Poor’sProlongacion Paseo de la Reforma #1015,Col. Sante Fe, Mexico City 0<strong>13</strong>76, Mexico.Tel: +52 (55) 5081 4400Fax: +52 (55) 5081 4401White & Case S.C.Batallón de San Patricio 111, piso 28, ValleOriente, 66269 Garza García, N.L.,Mexico.Tel: +52 (81) 8218 8020Fax: +52 (81) 8218 8021PartnerEugenio SepúlvedaTel: +52 (81) 8218 8023Email: esepulveda@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.White & Case S.C.Torre Del Bosque PH, Boulevard ManuelAvila Camacho #24, Colonia Lomas deChapultepec, 11000 Mexico, D.F., Mexico.Tel: +52 (55) 5540 9600Fax: +52 (55) 5540 9699Website: www.whitecase.comPartnersVicente CortaTel: +52 (55) 5540 9602Email: vcorta@whitecase.comAlberto Sepulveda CosioTel: +52 (55) 5540 9606Email: asepulveda-cosio@whitecase.comIker ArriolaTel: +52 (55) 5540 9625Email: iarriola@whitecase.comJuan Antonio MartinTel: +52 (55) 5540 9618Email: jmartin@whitecase.comRodrigo Orozco-WatersTel: +52 (55) 5540 9650Email: rorozco@whitecase.comEugenio BernalTel: +52 (55) 5540 9629Email: ebernal@whitecase.comIván LibensonTel: +52 (55) 5540 9663Email: ilibenson@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.MOROCCOGarrigues14, Boulevard Pasteur, 9000 Tánger, Morocco.Tel: +212 (39) 379 050Fax: +212 (39) 379 069Website: www.www.garrigues.comContactJose Ignacio GarcíaEmail: jose.ignacio.garcia@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Garrigues3, Boulevard Massira Al Khadra,20100 Casablanca, Morocco.Tel: +212 (22) 777 240Fax: +212 (22) 777 259Website: www.garrigues.comHead of Casablanca OfficeJosé Ignacio GarcíaEmail: jose.ignacio.garcia@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Roland Berger StrategyConsultants SARL/A.U.Angle Bd Roudani & Rue Jean Jaurès,20000 Casablanca, Morocco.Tel: +212 (52) 901 <strong>13</strong>55Fax: +212 (52) 901 <strong>13</strong>53Website: www.rolandberger.comPartnerLaurent BenarousseTel: +212 (52) 901 <strong>13</strong>54Email:laurent_benarousse@ma.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.NETHERLANDSAKDOrlyplein 10, NL-1043 DP Amsterdam;Mailing Address: PO Box 59280,NL-1040 KG Amsterdam, The Netherlands.Tel: +31 (88) 253 5000Fax: +31 (88) 253 5150Email: info@akd.nlWebsite: www.akd.nlPartnerBarend W.J.M. de Roy van ZuidewijnEmail: bderoyvanzuidewijn@akd.nlActivities: Trustee in the insolvencies of TSTGroep, Internoc Holding N.V. and CEGGroup, working as monitoringcounsel/attorney in D&O liability claims forChubb Insurance Company of Europe S.A.and AIG Europe Netherlands N.V.AKDBijster 1, NL-4817 HX Breda;Mailing Address: PO Box 4714,NL-4803 ES Breda, The Netherlands.Tel: +31 (88) 253 5000Fax: +31 (88) 253 6001Email: info@akd.nlWebsite: www.akd.nlPartnerEd C.M. WagemakersEmail: ewagemakers@akd.nlAKDWilhelminkade 1, NL-3072 AD Rotterdam;Mailing Address: PO Box 4302,NL-3006 AH Rotterdam, The Netherlands.Tel: +31 (88) 253 5000Fax: +31 (88) 253 5400Email: info@akd.nlWebsite: www.akd.nlPartnerPaul J. PetersEmail: paupeters@akd.nlBierman AdvocatenLingedijk 58, NL-4002 XL Tiel,The Netherlands.Tel: +31 (34) 467 7188Fax: +31 (34) 467 7190Email: info@bierman.nlWebsite: www.bierman.nlContactsC.G. KlompEmail: klomp@bierman.nlJ.M.A.J. ThielenActivities: The restructuring and insolvencypractice acts not only in receiverships butalso assists clients in recovery operations,liquidations, reorganisations and debtrestructuring. Regarding these issues, theteam also specialises in corporate bankingand finance and employment.Bosselaar & StrengersMaliebaan 29-33, NL-3581 CC Utrecht,The Netherlands.Tel: +31 (30) 234 7265Fax: +31 (30) 234 7282Email: j.maduro@bs-advocaten.nlWebsite: www.bs-advocaten.nlSenior Trustee, Attorney Bankruptcies &<strong>Restructuring</strong>Janina V. MaduroActivities: Regularly appointed by DutchCourts to be trustee in bankruptcies. Thefirm represents creditors and managers inbankruptcy and restructuring cases.CMS Derks Star BusmannNewtonlaan 203, NL-3584 BH Utrecht,The Netherlands.Tel: +31 (30) 212 1111Fax: +31 (30) 212 <strong>13</strong>33Email: ultrecht@cms-dsb.comWebsite: www.cms-dsb.com225

Attorney-at-LawHead of Practice GroupJan Willem (J.W.) BoumanTel: +31 (20) 212 1285Email: janwillem.bouman@cms-dsb.comAttorney-at-LawMarcel (J.L.M.) GroenewegenTel: +31 (20) 301 6410Email: marcel.groenewegen@cms-dsb.comActivities: Corporate restructuring advice,enforcement of security rights, appointmentas administrator and trustee in bankruptcy,assisting and advising financial institutions ininsolvency related issues.De Brauw Blackstone WestbroekPO Box 75084, NL-1070 AB Amsterdam,The Netherlands.Tel: +31 (20) 577 1771Fax: +31 (20) 577 1775Email: amsterdam@debrauw.comWebsite: www.debrauw.comContactsRuud HermansEmail: ruud.hermans@debrauw.comJan Willem de BoerEmail: janwillem.deboer@debrauw.comBerto WintersEmail: berto.winters@debrauw.comActivities: Focused on advising and assistingbanks, (multinational) companies andmanagement on insolvency and restructuringrelated issues and advising (court appointed)liquidators or trustees. Often involved ininternational and multi-jurisdictional cases.DeloitteOrlyplein 10, NL-1043 DP Amsterdam,The NetherlandsWebsite: www.deloitte.comHead of <strong>Restructuring</strong> ServicesOscar SnijdersTel: +31 (88) 288 3277Email: osnijders@deloittece.nlActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Hogan Lovells International LLPKeizersgracht 555, NL-1017 DR Amsterdam;Mailing Address: Postbus 545, NL-1000 AMAmsterdam, The Netherlands.Tel: +31 (20) 553 3600Fax: +31 (20) 553 3777Email: firstname.lastname@hoganlovells.comWebsite: www.hoganlovells.comPartnerKen BrekenActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.Houthoff BurumaWeena 355, NL-30<strong>13</strong> AL Rotterdam;Mailing Address: PO Box 1507,NL-3000 BM Rotterdam, The Netherlands.Tel: +31 (10) 217 2000Fax: +31 (10) 217 2700Website: www.houthoff.comHouthoff Buruma n.vGustav Mahlerplein 50, NL-1082 AMAmsterdam; Mailing Address: PO Box 75505,NL-1070 AM Amsteradm, The Netherlands.Tel: +31 (20) 605 6387Fax: +31 (20) 605 6708Website: www.houthoff.comPartner, <strong>Insolvency</strong> & <strong>Restructuring</strong>Rutger J. SchimmelpenninckEmail: r.schimmelpenninck@houthoff.comActivities: Involved in larger, and especiallyinternationally structured, insolvencies andcorporate, financial restructurings.IBFDPO Box 20237, NL-1000 HE Amsterdam,The Netherlands.Tel: +31 (20) 554 0100Fax: +31 (20) 622 8658Email: info@ibfd.orgWebsite: www.ibfd.orgSales ManagerJeroen van MeertenTel: +31 (20) 554 0179Email: j.vanmeerten@ibfd.orgHead, International Tax AcademyArcotia HatsidimitrisTel: +31 (20) 554 0160Email: a.hatsidimitris@ibfd.orgActivities: IBFD provides independent,impartial information, training, research, andgovernment consultancy in the specialist areaof cross-border taxation.JPR AdvocatenPostbus 348, NL-7000 AH Doetinchem,The Netherlands.Tel: +31 (31) 437 2311Fax: +31 (31) 433 2147Website: www.jpr.nlContactA.M.T. WeersinkEmail: weersink@jpr.nlActivities: A firm of 55 lawyers.JPR AdvocatenPostbus 2121, NL-7500 CC Enschede,The Netherlands.Tel: +31 (53) 433 1<strong>13</strong>3Fax: +31 (53) 433 0381Website: www.jpr.nlContactJ.T. StekelenburgEmail: stekelenburg@jpr.nlActivities: A firm of 55 lawyers.JPR AdvocatenPostbus 623, NL-7400 AP Deventer,The Netherlands.Tel: +31 (57) 061 4000Fax: +31 (57) 061 8244Website: www.jpr.nlContactA.A.M. SplietEmail: spliet@jpr.nlActivities: A firm of 55 lawyers.Loyens & Loeff N.V.Fred. Roeskestraat 100, NL-1076 EDAmsterdam; Mailing Address: PO Box 71170,NL-1008 BD Amsterdam, The Netherlands.Tel: +31 (20) 578 5785Fax: +31 (20) 578 5810Website: www.loyensloeff.comLawyersHendrik Van DrutenTel: +31 (20) 578 5925Email: hendrik.van.druten@loyensloeff.comVincent VroomTel: +31 (20) 578 5984Email: vincent.vroom@loyensloeff.comActivities: (International) insolvency,turnaround and corporate recovery work.Specialised in litigation and advice forcommercial banks, major creditors andlenders, liquidators and management.PricewaterhouseCoopers201 De Entree, NL-1101 HG Amsterdam,The Netherlands.Tel: +31 (20) 568 6607Fax: +31 (20) 568 4915Website: www.pwc.com/nl/brsActivities: Extensive practical experiencesupporting troubled corporates and theirstakeholders.RESORSymphony Building, Gustav Mahlerplein 27,NL-1082 MS Amsterdam, The Netherlands.Tel: +31 (20) 570 9020Fax: +31 (20) 570 9021Email: info@resor.nlWebsite: www.resor.nlLawyers/OwnersProf. J. J. van HeesTel: +31 (20) 570 9024Email: jako.vanhees@resor.nlN.W A. TollenaarTel: +31 (20) 570 9022Email: nico.tollenaar@resor.nlActivities: Implementing financialrestructurings, assisting and advising all typicalstakeholders in the insolvency arena, advisinglenders in multi-creditor, multi jurisdictionalworkouts, distressed M&A, special expertiseon cross-border matters.Roland Berger StrategyConsultants B.V.World Trade Center, Strawinskylaan 581,NL-1077 XX Amsterdam, The Netherlands.Tel: +31 (20) 796 0600Fax: +31 (20) 796 0699Website: www.rolandberger.comPartnerRene SeygerTel: +31 (20) 796 0620Email: rene_seyger@nl.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Simmons & SimmonsClaude Debussylaan 247,NL-1082 MC Amsterdam, The Netherlands.Tel: +31 (20) 722 2500Fax: +31 (20) 722 2599Website: www.simmons-simmons.comPartnersGerhard GispenTel: +31 (20) 722 2324Email:gerhard.gispen@simmons-simmons.comChristiaan ZijderveldTel: +31 (20) 722 2368Email:christiaan.zijderveld@simmons-simmons.comActivities: Multi bank rescue, debt andequity restructurings, reorganisations,security enforcement, debt recovery,insolvency litigation, advice and litigationregarding D&O liability.Stibbe2001 Strawinskylaan, NL-1077 ZZAmsterdam; Mailing Address: PO Box 75640,NL-1070 AP Amsterdam, The Netherlands.Tel: +31 (20) 546 0606Fax: +31 (20) 546 0123Email: info@stibbe.nlWebsite: www.stibbe.comContactKaren HarmsenEmail: karen.harmsen@stibbe.comTel: +31 (20) 546 0159Activities: A national and internationalinsolvency and restructuring practice,advising, litigation and acting astrustee/administrator.Udink & De JongAlexanderstraat 2, NL-2514 JL Den Haag,The Netherlands.Tel: +31 (70) 311 0711Fax: +31 (70) 311 0722Email: info@udink.nlWebsite: www.udink.nlContactM.C. UdinkEmail: m.udink@udink.nlActivities: Legal advisors, liquidators.226

Van Doorne N.V.Jachthavenweg 121, NL-1081 KM Amsterdam,The Netherlands.Tel: +31 (20) 678 9123Fax: +31 (20) 678 9589Email: schaink@vandoorne.comWebsite: www.vandoorne.comContactsPaul R.W. SchainkHarmke WillemsActivities: Acts as administrators orreceivers, appointed by courts. Also deals inreorganisation and debt restructuring e.gHabitat, Versatel, UPC, Song Networks, TXU.NEW ZEALANDBell GullyVero Centre, 48 Shortland Street,PO Box 4199, Auckland, New Zealand.Tel: +64 (9) 916 8800Fax: +64 (9) 916 8801Email: info@bellgully.comWebsite: www.bellgully.comChairmanRoger PartridgePartner (<strong>Insolvency</strong> Practice Leader)Murray TingeyEmail: murray.tingey@bellgully.comActivities: Leader in insolvency, corporaterestructuring, receivership and liquidation lawin New Zealand.DeloitteLevel 8, Deloitte House, 8 Nelson Street,Auckland, New Zealand.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesRodney PardingtonTel: +64 (9) 303 0705; 76 ext. 6705Email: rpardington@deloitte.co.nzActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.KordaMenthaLevel 16, Tower Centre, 45 Queen Street,Auckland 1010, New Zealand.Tel: +64 (9) 307 7865Fax: +64 (9) 377 7794Email: nz@kordamentha.comWebsite: www.kordamentha.comPartnersMichael StiassnyBrendon GibsonGrant GrahamMcDonald VagueLevel 4, 143 Nelson St., Auckland,Mailing Address: PO Box 6092, WellesleyStreet Post Office, Auckland, New Zealand.Tel: +64 (9) 303 0506Fax: +64 (9) 303 0508Email: insol@mvp.co.nzWebsite: www.mvp.co.nzPartnersRoy HorrocksTel: +64 (9) 306 3332Email: rhorrocks@mvp.co.nzPeri M. FinniganTel: +64 (9) 303 9519Email: pfinnigan@mvp.co.nzBoris Van DeldenTony MaginnessActivities: Liquidations, receiverships,solvent liquidations, company compromises,part 5 proposals, alternatives to bankruptcy,voluntary administration, crisis management,restructuring.PPB AdvisoryLevel 11, DLA Phillips, Fox Tower, NationalBank Centre, 205-209 Queen Street,Auckland, New Zealand.Tel: +64 (9) 304 <strong>13</strong>00Fax: +64 (9) 304 <strong>13</strong>11Website: www.ppbadvisory.comCEOStephen PurcellPartnerDavid WebbEmail: dwebb@ppbadvisory.comActivities: PPB Advisory is a leadingprofessional advisory firm specialising incorporate advisory, restructuring andturnarounds, forensics, and insolvencyservices. The firm employs over 300 people,including 35 partners, across Australia andNew Zealand.NIGERIAAbdulai, Taiwo & Co.Goodwill House, 278 Ikorodu Road,PO Box 536, YABA, Lagos, Nigeria.Tel: +234 (1) 2790737Fax: +234 (1) 2790739Email: law@abdulaitaiwo.comWebsite: www.abdulaitaiwo.comManaging PartnerLadi TaiwoPartnerAkin OsinbajoKenna PartnersPlot 8, Block 16, Ogunyemi Road, Off PalaceRoad, Oniru, PO Box 73002 Victoria Island,Lagos, Nigeria.Tel: +234 (1) 8445051/2Email: oadesanya@kennapartners.comWebsite: www.kennapartners.comPrincipal PartnerFabian Ajogwu, SANAssociateOyinkan AdesanyaActivities: Debt restructuring advice, legaltransactions, LBOs, due diligence.NORWAYBA-HRStranden 1A, N-0250 Oslo; Mailing Address:PO Box 1524 Vika, N-0117 Oslo, Norway.Tel: +47 2283 0270Fax: +47 2283 0271Email: pose@bahr.noWebsite: www.bahr.noPartnersRichard SjøqvistEmail: ric@bahr.noAnders GullåsenEmail: ang@bahr.noDeloitteKarenslyst alle 20, N-02<strong>13</strong> Oslo, Norway.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesAndreas EngerTel: +47 2327 9534Email: aenger@deloitte.noActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Simonsen Fýyen Advokatfirma DAPO Box 6641, St. Olavs Pl., N-0129 Oslo,Norway.Tel: +47 2195 5500Fax: +47 2195 5501Email: post@simonsenlaw.noWebsite: www.simonsenlaw.noPartnerClaus R. FlinderWikborg ReinPb 15<strong>13</strong> Vika, N-0117 Oslo, Norway.PartnersLeif Petter MadsenMarius GisvoldActivities: Wikborg Rein’s <strong>Restructuring</strong>Group assists banks, borrowers, managementand creditors in achieving arrangements thatprovide a sound basis for continuedoperations.OMANS & A Law FirmFirst Floor Al Fannar Building, Building No.569, Way No. 3009, Shatti Al Qurum, PO Box3552, Ruwi PC 112, Sultanate of Oman.Tel: +968 2460 7568Fax: +968 2457 3097Website: www.snrdenton.comPartnerAbdelrahman ElnafieSNR Denton & Co, Oman BranchSecond Floor Al Fannar Building,Shatti Al Qurum, PO Box 3552,Ruwi PC 112, Sultanate of Oman.Tel: +968 2457 3000Fax: +968 2457 3097Website: www.snrdenton.comPartnerDavid Courtney-HatcherPAPUA NEWGUINEABlake DawsonMogoru Moto Building, Champion Parade,Port Moresby, Papua New Guinea.Tel: +675 309 2000Fax: +675 309 2099Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartner, <strong>Restructuring</strong> & <strong>Insolvency</strong>Ray MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Gadens LawyersPacific Place, Cnr Musgrave Street &Champion Parade, Port Moresby,Papua New Guinea.Tel: +675 321 1033Fax: +675 321 1885Email: gadenspng@gadens.com.pgWebsite: www.gadens.com.auContactJason BrooksTel: +675 7689 3801Fax: +675 321 1885Email: jbrooks@gadens.com.pg227

Activities: Gadens Lawyers regularly advisesinsolvency practitioners and financiers on arange of issues including informal workouts,administration, appointments and redocumentation.Posman Kua Aisi, LawyersPO Box 228, Port Moresby,Papua New Guinea.Tel: +675 320 0127Fax: +675 320 0361Email: posman.kua@posman.comPartnerRio FioccoActivities: Company liquidations andreceivership-legal advice in Papua NewGuinea.POLANDChadbourne & ParkeRadzikowski, Szubielska i Wspólnicy sp.k., ul.Emilii Plater 53, 00-1<strong>13</strong> Warsaw, Poland.Tel: +48 (22) 520 5000Fax: +48 (22) 520 5001Email: warsaw@chadbourne.comWebsite: www.chadbourne.comManaging PartnerWlodzimierz RadzikowskiEmail: wradzikowski@chadbourne.comActivities: Chadbourne & Parke offers a fullrange of services in cross-borderbankruptcies and financial restructurings,business restructurings and insolvencies.Garrigues PolskaWarsaw Financial Center- Emilii Plater,53, 00-1<strong>13</strong> Warsaw, Poland.Tel: +48 (22) 540 6100/463 6100Fax: +48 (22) 540 6101/463 6101Website: www.garrigues.comHead of Garrigues PolskaCarlos RapalloEmail: carlos.rapallo@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Hogan Lovells (Warszawa) LLPul. Nowogrodzka 50, 00 695 Warsaw, Poland.Tel: +48 (22) 529 2900Fax: +48 (22) 529 2901Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnerMarek WroniakActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.NoerrAl. Armii Ludowej 26, 00-609 Warsaw, Poland.Tel: +48 (22) 579 3060Fax: +48 (22) 579 3070Email: info@noerr.comWebsite:www.noerr.comContactDr. Jacek BakEmail: jacek.bak@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.Roland Berger StrategyConsultants Sp.z.o.o.Plac Pilsudskiego 3, 00-078 Warsaw, Poland.Tel: +48 (22) 323 7460Fax: +48 (22) 323 7470Website: www.rolandberger.comPartnerKrzysztof BadowskiTel: +48 (22) 323 7414Email:krzysztof_badowski@pl.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.SalansRondo ONZ 1, 00-124 Warsaw, Poland.Tel: +48 (22) 242 5252Fax: +48 (22) 242 5242Email: warsaw@salans.comWebsite: www.salans.comPartnerAnna Maria PuksztoTel: +48 (22) 242 5699Email: apukszto@salans.comManaging PartnerTomasz DabrowskiTel: +48 (22) 242 5601Email: tdabrowski@salans.comActivities: Offer full range of legal servicesin the fields of corporate restructuring,bankruptcy and workout matters as well asinsolvency disputes representing lenders,debtors, and institutional and individualcreditors.Squire Sanders ŚwiȩcickiKrześniak sp.k.Rondo ONZ 1, 00-124 Warsaw, Poland.Tel: +48 (22) 395 5500Fax: +48 (22) 395 5501Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong> ContactMaciej SzwedowskiActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.White & Case W. Danilowicz, W.Jurcewicz i Wspólnicy - KancelariaPrawna sp.k.Marszalkowska 142, 00-061 Warsaw, Poland.Tel: +48 (22) 505 0100Fax: +48 (22) 505 0400Website: www.whitecase.comPartnerPiotr GaluszynskiTel: +48 (22) 505 0183Email: pgaluszynski@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.PORTUGALDein AdvogadosRua Castilho 1, 5° Esq,P-1250-066 Lisbon, Portugal.Tel: +351 (21) 388 4095Fax: +351 (21) 388 1955Email: dein@dein.ptWebsite: www.dein.ptContactCristina DeinActivities: Cross-border insolvenciesinvolving companies and private persons,restructuring, advice and representation ofcreditors and insolvency administrators.DeloitteEdifício Atrium Saldanha, Praça Duque deSaldanha 1, piso 7°, P-1050-094 Lisboa,Portugal.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesJoaquim PauloTel: +351 (21) 042 2502Email: jpaulo@deloitte.ptActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Garrigues Portugal, S.L.Avenida da Boavista, 3523, Ed. Aviz, 2ª,P-4100-<strong>13</strong>9 Oporto, Portugal.Tel: +351 (22) 615 8860Fax: +351 (22) 615 8888Website: www.garrigues.comHead of Oporto OfficeMiguel ReisEmail: miguel.c.reis@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Garrigues Portugal, S.L.Avenida Engenheiro Duarte PachecoAmoreiras, Torre 1, piso 15°,P-1070-101 Lisboa, Portugal.Tel: +351 (21) 382 1200Fax: +351 (21) 382 1290Website: www.garrigues.comHead of Portugal OfficeIsabel Martínez de SalasEmail: isabel.martinez.de.salas@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.KPMG PortugalEdifício Monumental Av. Praia da Vitória,71 - A, 11º, P-1069-006 Lisbon, PortugalTel: +351 (210) 110 000Fax: +351 (210) 110 121Website: www.kpmg.ptHead of <strong>Restructuring</strong>José Luís Silva228

Macedo Vitorino & AssociadosRua de Alecrim 26-E 1200-018,Lisbon, Portugal.Tel: +351 (21) 324 1900Fax: +351 (21) 324 1929Email: mva@macedovitorino.comWebsite: www.macedovitorino.comSenior PartnersAntónio de Macedo VitorinoTel: +351 (21) 324 1911Email: avitorino@macedovitorino.comJoão de Macedo VitorinoTel: +351 (21) 324 1910Email: jvitorino@macedovitorino.comActivities: MVA has expertise in defendingthe rights of secured and unsecuredcreditors in debt recovery proceedingsarising from complex insolvency procedures.MVA also acts for troubled companies andinvestors in restructurings.PricewaterhouseCoopers -Assessoria de Gestão, LdaPalácio Sottomayor - Rua Sousa Martins,1, 2°, P-1069-316 Lisbon, Portugal.Tel: +351 (21) 359 9000Fax: +351 (21) 359 9999Website: www.pwc.com/ptPartnersVijay ChopraTel: +351 (21) 359 9142Email: vijay.chopra@pt.pwc.comPatrique FernandesTel: +351 (21) 359 9142Email: patrique.fernandes@pt.pwc.comActivities: PwC provides advice tobusinesses in distress and to their creditors,including independent business reviews,restructuring plans and insolvency consulting.Roland Berger Consultores deEstratégia, Lda.Rua Castilho 165, 2nd Floor,P-1070-050 Lisbon, Portugal.Tel: +351 (21) 356 7600Fax: +351 (21) 352 4360Website: www.rolandberger.comPartnerAntonio BernardoTel: +351 (21) 356 7601Email:antonio_bernardo@pt.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Vieira de Almeida & AssociadosAvenida Duarte Pacheco 26, P-1070-110Lisbon, Portugal.Tel: +351 (21) 311 3400Fax: +351 (21) 311 3406Email: lisboa@vda.ptWebsite: www.vda.ptPartnerFrederico Gonçalves PereiraMedia RelationsRita Proença VaráoActivities: Litigation and arbitration,corporate crime.QATARSNR DentonFloor 15, Al Fardan Office Tower,61 Al Funduq Street, West Bay,P.O. Box 64057, Doha, State of Qatar.Tel: +974 4459 8960Fax: +974 4459 8961Website: www.snrdenton.comPartnerLeigh HallTel: +974 4459 8962WongPartnership LLP Licensed bythe QFCAOffice 12-20, Amwal Tower, West Bay,PO Box No. 15397, Doha, QatarTel: +974 491 2332Fax: +974 491 2339Email: contactus@wongpartnership.comWebsite: www.wongpartnership.comSenior PartnerAlvin YeoSenior Counsel, PartnersChou Sean YuManoj Pillay SandrasegaraMark ChoyActivities: The Practice specialises inadvising corporates and financial institutionson a full range of debt restructuring andliability management issues.ROMANIAAlpha Bank RomaniaCalea Dorobanti, Nr. 237B, Bucharest,Sector 1, Romania.Tel: +40 (21) 209 2100Fax: +40 (21) 231 6570Email: pr@alphabank.roWebsite: www.alphabank.roExecutive PresidentSergiu OprescuTel: +40 (21) 455 7001First Executive Vice PresidentStere FarmacheTel: +40 (21) 455 7006Activities: Universal bank, offering productsand services for individuals and companies.NoerrStr. General Constantin, Budisteanu nr. 28 C,sector 1, 010775 Bucharest, Romania.Tel: +40 (21) 312 5888Fax: +40 (21) 312 5889Email: info@noerr.comWebsite: www.noerr.comContactProf. Dr. Jörg MenzerEmail: joerg.menzer@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.Roland Berger StrategyConsultants SRLStr. Dr. Burghelea Nr. 5,024031 Bucharest, Romania.Tel: +40 (21) 306 0500Fax: +40 (21) 306 0510Website: www.rolandberger.comPartnerCodrut PascuEmail: codrut_pascu@ro.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Studio Legale SuttiBd. Unirii 2, Bl. 8A, Apt. 25, Sector 4,751012 Bucharest, Romania.Tel: +40 (21) 337 0730Fax: +40 (21) 337 3171Email: maildesk@sutti.comWebsite: www.sutti.comResident PartnerHugo VitzmanActivities: International corporate recovery,advising multi-national reorganisations,corporate restructuring, creditors’ rights andcompliance issues.White & Case, Pachiu SCANicolae Filipescu Street 45,020961 Bucharest, Romania.Tel: +40 (31) 224 8400Fax: +40 (31) 224 8401Website: www.whitecase.comExecutive PartnerDelia PachiuTel: +40 (31) 224 8411Email: dpachiu@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Wolf Theiss si asociatii SCABucharest Corporate Center, 58-60.Gheorghe Polizu Str. Floor 12-<strong>13</strong>, Sector 1,011062 Bucharest, RomaniaTel: +40 (21) 308 8100Fax: +40 (21) 308 8125Email: bucuresti@wolftheiss.comWebsite: www.wolftheiss.comDirectorBryan JardineActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.RUSSIAAlvarez & Marsal CIS, LLPSadovnicheskaya ul. 14/2, Moscow 115035,Russian Federation.Tel: +7 (495) 988 7745Email: nkozmina@alvarezandmarsal.comWebsite: www.alvarezandmarsal.comManaging DirectorsMaxim FrangulovEmail: mfrangulov@alvarezandmarsal.comAlexei EvgenevEmail: aevgenev@alvarezandmarsal.comActivities: Leading global crisis and interimmanagement firm.Chadbourne & Parke LLPRiverside Towers 52/5 KosmodamianskayaNaberezhnaya, Moscow 115054, RussianFederation.Tel: +7 (495) 974 2424Fax: +7 (495) 974 2425Email: moscow@chadbourne.comWebsite: www.chadbourne.comManaging PartnerJennifer HandzEmail: jhandz@chadbourne.comActivities: Chadbourne & Parke LLP offers afull range of services in cross-borderbankruptcies and financial restructurings,business restructurings and insolvencies.Clifford Chance CIS LimitedUl. Gasheka, 6, 125047 Moscow,Russian Federation.Tel: +7 (495) 258 5050Fax: +7 (495) 258 5051Website: www.cliffordchance.com229

PartnersJan ter HaarTel: +7 (495) 725 6446Email: jan.terhaar@cliffordchance.comLogan WrightTel: +7 (495) 725 6430Email: logan.wright@cliffordchance.comVictoria BortkevichaTel: +7 (495) 725 6406Email:victoria.bortkevicha@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Dewey & LeBoeuf LLPLegend Business Center, Tsvetnoy Bulvar, 2,127051 Moscow, Russian Federation.Tel: +7 (495) 212 2500Fax: +7 (495) 212 2400Email: moscow@dl.comWebsite: www.dl.comManaging PartnerBrian ZimblerActivities: Legal advice in insolvency,workout and restructuring projects of alltypes in Russia and CIS.Hogan Lovells (CIS)Voznesensky Pereulok 22, 5th Floor, UsadbaCenter, 125009 Moscow, Russian Federation.Tel: +7 (495) 933 3000Fax: +7 (495) 933 3001Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnersOxana BalayanMichael PughActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.KPMG LIMITED10 Presnenskaya Naberezhnaya,Moscow 123317, Russian Federation.Tel: +7 (495) 937 4477Fax: +7 (495) 937 4499Website: www.kpmg.ruHead of AdvisoryTony ThompsonTel: +7 (495) 937 4403Email: tthompson@kpmg.ruPartner, Transactions & <strong>Restructuring</strong>Stephen MillerTel: +7 (495) 937 4448Email: stephenmiller@kpmg.ruActivities: Full range of financialrestructuring advisory services, for stressedand distressed situations, both creditor andcompany side.Noerr1-ya Brestskaya Street 29, 125047 Moscow,Russian Federation.Tel: +7 (495) 799 5696Fax: +7 (495) 799 5697Email: info@noerr.comWebsite: www.noerr.comContactBjörn PaulsenEmail: bjoern.paulsen@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.Roland Berger StrategyConsultants GmbH7 Gasheka Street, Structure 1, Ducat Place II,123056 Moscow, Russian Federation.Tel: +7 (495) 287 9246Fax: +7 (495) 287 9247Website: www.rolandberger.comPartnerDr. Uwe KummEmail: uwe_kumm@ru.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Skadden, Arps, Slate, Meagher &Flom LLP & AffiliatesDucat Place III, Gasheka Street 6, 125047Moscow, Russian Federation.Tel: +7 (495) 797 4600Fax: +7 (495) 797 4601Website: www.skadden.comPartnersBruce M. BuckPranav L. TrivediLinda DaviesAlexey V. KiyashtoDmitri V. KovalenkoActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.SNR DentonBolshaya Dmitrovka 7/5, Building 2,Moscow 125009, Russian Federation.Tel: +7 (495) 916 9636Fax: +7 (495) 916 9637Website: www.snrdenton.comPartnersAlexander BarminTel: +7 (495) 229 2333Email: alexander.barmin@snrdenton.comDoran DoehTel: +7 (495) 229 2333Mob: +7 (903) 968 0358Email: doran.doeh@snrdenton.comMyles MantleEmail: myles.mantle@snrdenton.comAnna OtkinaTel: +7 (495) 229 2333Email: anna.otkina@snrdenton.comSquire Sanders Moscow LLC4, bld. 2 Romanov pereulok, 125009, Moscow,Russian Federation.Tel: +7 (495) 258 5250Fax: +7 (495) 258 5251Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsSergey A. TreshchevPatrick J. BrooksAlexander N. AkhmetbekovNikita BeylinActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’s4/7 Vozdvizhenka Street, Building 2, 7th Floor,125009 Moscow, Russian Federation.Tel: +7 (495) 783 4000Fax: +7 (495) 783 4001White & Case LLCRomanov Pereulok 4, 125009 Moscow,Russia.Tel: +7 (495) 787 3000Fax: +7 (495) 787 3001Website: www.whitecase.comPartnersMaya MelnikasTel: +7 (495) 787 3017Email: mmelnikas@whitecase.comEric MichailovTel: +7 (495) 787 3018Email: emichailov@whitecase.comIrina NesvetovaTel: +7 (495) 787 3012Email: inesvetova@whitecase.comIgor OstapetsTel: +7 (495) 787 3019Email: iostapets@whitecase.comHermann SchmittTel: +7 (495) 787 3005Email: hschmitt@whitecase.comThomas McDonaldTel: +7 (495) 787 3033Email: thomas.mcdonald@whitecase.comCounselAlexey BarnashovTel: +7 (495) 787 3007Email: abarnashov@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.SAUDI ARABIAEK Partners & Al-Enezee LegalCounselJazeera Compound Unit #4; Mailing Address:PO Box 27483, Riyadh, Kingdom of SaudiArabia.Tel: +966 (1) 276 7372Fax: +966 (1) 276 6960Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsKevin T. ConnorZiad G. El-KhouryActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.The Law Firm of Wael A. Alissa inassociation with SNR Denton &CoTatweer Towers, Tower 1, Level 8, King FahadRoad, Opp - The Ministry of Municipality &Rural Affairs, PO Box: 59490, Riyadh 11525,Kingdom of Saudi Arabia.Tel: +966 (1) 200 8678Fax: +966 (1) 200 8679Website: www.snrdenton.comPartnerAmgad T. Husein230

SERBIAStudio Legale SuttiTadeusa Koscuska, 8, 11000 Belgrade, Serbia.Tel: +381 (11) 303 1227Fax: +381 (11) 303 1229Email: belgrade@sutti.comWebsite: www.sutti.comResident PartnerNenad MilovanovicContactMirko JovanovicActivities: International corporate recovery,advising multi-national reorganisations,corporate restructuring, creditors’ rights andcompliance issues.Wolf Theiss D.O.OPC Ušce, Bulevar Mihajla Pupina 6,11070 Novi Beograd, Serbia.Tel: +381 (11) 3302 900Fax: +381 (11) 3302 925Email: beograd@wolftheiss.comWebsite: www.wolftheiss.comDirectorMiroslav StojanovicActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.SINGAPOREBlake DawsonUnit #14-00, Level 14, ASO Building,NO.8 Robinson Road, Singapore 048544.Tel: +65 6438 7886Fax: +65 6438 7885Website: www.blakedawson.comNational Practice Head, <strong>Restructuring</strong> &<strong>Insolvency</strong>James MarshallTel: +61 (2) 9258 6508Email: james.marshall@blakedawson.comPartnerRay MainsbridgeTel: +61 (2) 9258 6049Email: ray.mainsbridge@blakedawson.comActivities: Corporate reconstruction andinsolvency law which includes advising bothlenders and debtors on formal and informalschemes of arrangement, and administratorsof insolvent companies and creditors on theenforcement of securities and other rights.Clifford Chance19th Floor, One George Street,Singapore 049145.Tel: +65 6416 8000Fax: +65 6535 6855Website: www.cliffordchance.comPartnersNish ShettyTel: +65 6410 2285Email: nish.shetty@cliffordchance.comAndrew BreretonTel: +65 6410 2279Email: andrew.brereton@cliffordchance.comActivities: The global restructuring andinsolvency group advises lenders, othercreditors, debtors, shareholders and investorsin complex financial restructurings and crossborderinsolvencies.Deloitte6 Shenton Way, #32-00, DBS Building TowerTwo, Singapore.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesChee Chong TamTel: +65 6216 3268Email: ctam@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Drew & Napier LLC10 Collyer Quay, #10-01 Ocean FinancialCentre, Singapore 049315.Tel: +65 6535 0733Fax: +65 6535 4864Website: www.drewnapier.comDirector, Co Head of <strong>Restructuring</strong>Sushil NairTel: +65 6531 2410Email: sushil.nair@drewnapier.comDirectorJulian KwekTel: +65 6531 2451Email: julian.kwek@drewnapier.comActivities: The restructuring team isfocused on the regional and internatioanlmarket, particularly in Indonesia, China andSingapore.Hogan Lovells Lee & Lee50 Collyer Quay, #10-01 OUE Bayfront,Singapore 049321.Tel: +65 6538 0900Fax: +65 6538 7077Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.KordaMentha30 Robinson Road, Robinson Towers #12-01,Singapore 048546 .Tel: +65 6593 9333Fax: +65 6593 9399Email: sing.info@kordamentha.comWebsite: www.kordamentha.comPartnersBan Chuan NeoCameron DuncanMatthew FlemingLatham & Watkins LLP#42-02 Republic Plaza, 9 Raffles Place,Singapore 048619.Tel: +65 6536 1161Fax: +65 6536 1171Website: www.lw.comPartnersDavid MilesJoe BevashClarinda Tjia-DharmadiContactsJohn HoughtonTel: +44 (20) 7670 1000Jan BakerTel: +1 (212) 906 1200Mitchell SeiderTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.Nishimura & Asahi80 Robinson Road, #10-01A,Singapore 068898.Tel: +65 6420 6395Email: singapore@juristsoverseas.comRoland Berger StrategyConsultants Pte. Ltd.One Raffles Quay, North Tower, #25-00,Singapore 048583.Tel: +65 6622 5478Fax: +65 6622 5761Website: www.rolandberger.comPartnerThomas KlotzTel: +65 8571 7558Email: thomas_klotz@sg.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Shook Lin & Bok LLP#18-00 AIA Tower, 1 Robinson Road,Singapore 048542.Tel: +65 6535 1944Fax: +65 6535 8577Email: slb@shooklin.comWebsite: www.shooklin.comSenior PartnerSarjit Singh Gill, S.CActivities: Involved with receiverships,judicial management, schemes of arrangementand restructurings, both domestic and crossborder.Skadden, Arps, Slate, Meagher &Flom6 Battery Road, Suite 23-02,Singapore 049909.Tel: +65 6434 2900Fax: +65 6434 2988Website: www.skadden.comPartnerRajeev P. DuggalActivities: Worldwide practice servingcorporations and their principal creditorsand investors by providing value-added legalsolutions in bankruptcy and restructuringsituations.SNR DentonMarsh & McLennan Centre, 18 Cross Street,#07-06/07, Singapore 048423.Tel: +65 6532 1024Fax: +65 6532 1165Website: www.snrdenton.comPartnerMatthew CoxStamford Law Corporation10 Collyer Quay, #27-00, Ocean FinancialCentre, Singapore 049315.Tel: +65 6389 3000Fax: +65 6389 3099Website: www.stamfordlaw.com.sgDirectorsTan Chuan ThyeEmail: chuanthye.tan@stamfordlaw.com.sgSusan KongEmail: susan.kong@stamfordlaw.com.sgLean Min-tzeEmail: mintze.lean@stamfordlaw.com.sgDaniel LimEmail: daniel.lim@stamfordlaw.com.sgActivities: Acting in many high profileinsolvency/ restructuring of companies(examples include APP, CAO, Lehman, Miraand Jaya), as counsel for companies, creditorsor insolvency professionals.Standard & Poor’s30 Cecil Street, Prudential Tower,17th Floor, Singapore 049712.Tel: +65 6438 2881Fax: +65 6438 2320231

White & Case Pte. Ltd.50 Raffles Place, #30-00, Singapore LandTower, Singapore 048623.Tel: +65 6225 6000Fax: +65 6225 6009Website: www.whitecase.comPartnersKate AllchurchTel: +65 6347 <strong>13</strong>25Email: kallchurch@whitecase.comGuan Feng ChenTel: +65 6347 <strong>13</strong>27Email: gchen@whitecase.comJamie ThomasTel: +65 6347 <strong>13</strong>81Email: jamiethomas@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.WongPartnership LLP63 Market Street, #02-01, Singapore 048942.Tel: +65 6416 8000Fax: +65 6532 5722Email: contactus@wongpartnership.comWebsite: www.wongpartnership.com.\nSenior PartnerAlvin YeoSenior Counsel, PartnersChou Sean YuManoj Pillay SandrasegaraMark ChoyActivities: The Practice specialises inadvising corporates and financial institutionson a full range of debt restructuring andliability management issues.SLOVAKREPUBLICGlatzová & Co., v.o.s.Apollo Business Center, Prievozská 4/B,SK-821 09 Bratislava, Slovak Republic.Tel: +421 (2) 3211 3038Fax: +421 (2) 3214 4148Email: office.sk@glatzova.comWebsite: www.glatzova.comPartner, Head of Practice GroupDr. Martin DancisinEmail: martin.dancisin@glatzova.comAssociateLucia RegecováEmail: lucia.regecova@glatzova.comActivities: <strong>Restructuring</strong> and refinancing ofmajor global groups, representation ofcreditors and restructuring of insolventSlovak entities.NoerrAC Diplomat, Palisády 29/A,SK-811 06 Bratislava, Slovak Republic.Tel: +421 (2) 5910 1010Fax: +421 (2) 5910 1011Email: info@noerr.comWebsite: www.noerr.comContactPavol RakEmail: pavol.rak@noerr.comActivities: Advising shareholders,companies, creditors and investors regardinginsolvency/restructuring proceedings. Trusteefor secured creditors. Advice to insolvencyadministrators.Squire Sanders s.r.o.Zochova 5, SK-811 03 Bratislava, SlovakRepublic.Tel: +421 (2) 5930 3411Fax: +421 (2) 5930 3415Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong> ContactJulian JuhaszActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.White & Case s.r.oHlavné námestie 5, SK-811 01 Bratislava,Slovak Republic.Tel: +421 (2) 5441 5100Fax: +421 (2) 5441 6100Website: www.whitecase.comPartnersMarek StaronTel: +421 (2) 5920 6312Email: mstaron@whitecase.comSilvia BelovicovaTel: +421 (2) 5920 6317Email: sbelovicova@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Wolf TheissLaurinská 3, SK-811 01 Bratislava,Slovak Republic.Tel: +421 (2) 5910 1240Fax: +421 (2) 5910 1249Email: bratislava@wolftheiss.comWebsite: www.wolftheiss.comDirectorsLubos FrolkovicErik StegerActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.SLOVENIAWolf Theiss d.o.o.Tivolska 30, SI-1000 Ljubljana, Slovenia.Tel: +386 (1) 438 0000Fax: +386 (1) 438 0025Email: ljubljana@wolftheiss.comWebsite: www.wolftheiss.comDirectorDr. Markus BruckmüllerActivities: Advising international clients inall phases of restructuring projects, includingadvising and representing banks and materialvendors in insolvency proceedings.SOUTH AFRICABerrangé IncorporatedSuite 1, The Mews, Redlands Estate,1 George Macfarlane Lane, Pietermaritzburg,Kwazulu-Natal, South Africa.Tel: +27 (3) 3345 5331Fax: +27 (3) 3345 5824Email: attorney@b-inc.co.zaDirectorsPierre de Villiers BerrangéEugene NelGinette ChubbActivities: Boutique legal practicespecialising in liquidation and bankruptcyproceedings and restructuring throughoutSouthern Africa. Experience in cross-borderinsolvencies in the US, Canada, UK, Singaporeand Malaysia.Bowman GilfillanSA Reserve Bank Building, 60 St. George’sMall, Cape Town, South Africa.Tel: +27 (21) 480 7800Fax: +27 (21) 480 1688Email: info@bowman.co.zaWebsite: www.bowman.co.zaPartnerAdam HarrisTel: +27 (21) 480 7837Email: a.harris@bowman.co.zaActivities: Advising local and multinationallenders and corporations on all aspects ofbankruptcy and restructuring, particularlyRSA’s new business rescue regime.Cassim Trust / Cassim Inc.333 Muckleneuk Street, Nieuw Muckleneuk,Pretoria, South Africa.Tel: +27 (12) 460 7700Fax: +27 (12) 460 2323Email: admin@cassimlaw.co.zaWebsite: www.cassimlaw.co.zaDirectorZaheer CassimEmail: cassim@cassimlaw.co.zaActivities: Corporate rescue and recoveryincluding administration of insolvent estatesand related services.Dewey & LeBoeuf (Pty) Limited11th Floor, The Forum Building,2 Maude Street, Sandton 2196,Johannesburg, South Africa.Tel: +27 (11) 911 4300Fax: +27 (11) 784 2855Website: www.dl.comDirectors:Scott BrodskyEmail: sbrodsky@dl.comWildu du PlessisEmail:wduplessis@dl.comActivities: A leader in the practice of law;26 offices in 15 countries, an extraordinarybreadth of practice and extensive industryexperience.KAAP VAAL Trust (Pty) Ltd74 Siemert Road, Doornfontein,Johannesburg, Gauteng, South Africa.Tel: +27 (11) 402 3170Fax: +27 (11) 402 6920Managing DirectorC.F. de WetEmail: cf@kaapvaal.co.zaFinancial DirectorG.L.S. de WetActivities: Insolvencies, liquidations,restructuring, debt collection, deceasedestates, offers of compromise with creditors,drawing of trusts and wills, curator bonisestates.232

Knowles Husain Lindsay Inc4th Floor, The Forum, 2 Maude Street,Sandton, South Africa.Tel: +27 (11) 669 6000Fax: +27 (11) 669 6299Email: ivl@khl.co.zaDirectorsIan V. LindsayMohamed J. HusainActivities: <strong>Insolvency</strong> related litigation,schemes of arrangement, business rescue andinsolvency enquiries.PwC2 Eglin Road, Sunninghill, Johannesburg 2157,South Africa.Tel: +27 (11) 797 4000Fax: +27 (11) 797 5800Website: www.pwc.com/za/transactionsNational Product Leader-BusinessRecovery ServicesStefan SmythTel: +27 (11) 797 4184Email: stefan.smyth@za.pwc.comBusiness Recovery ServicesSharon TaylorTel: +27 (11) 797 4795Email: sharon.taylor@za.pwc.comActivities: Professional advisors tostakeholders in distressed businesses -specialising in independent reviews, debtadvisory, financial restructuring and Chapter6 business rescues.RMG-Vhalemba Trust CC8th Floor, Sandton City Office Tower,Cor Rivonia & Fifth Streets, Sandton 2146,South Africa.Tel: +27 (11) 883 2559Fax: +27 (11) 883 8143Email: reuben@rmgtrust.co.zaChairmanR. MillerCEOJ. MuthanyiActivities: Liquidators, trustees and judicialmanagers; financial consultants - CA (SA);business recovery and turnaround experts.Sandars Wilson AttorneysSecond Floor, West Tower, Nelson MandelaSquare, Maude Street, Sandton,2194 Johannesburg, South Africa.Tel: +27 (86) 110 0099Fax: +27 (11) 881 5468Email: info@insolvency.co.zaWebsite: www.insolvency.co.zaContactJohn Sandars WilsonActivities: Law firm specialising ininsolvency; can accept appointments asliquidator, trustee, curator; also involved inrestructuring, rescue, mergers andacquisitions.Shirish Kalian Attorneys44 Dudley Road, Corner Bolton Road,Rosebank, Johannesburg, 2196; MailingAddress: PO Box 2749, Parklands 2121,Guateng, South Africa.Tel: +27 (11) 447 4600Fax: +27 (11) 447 0317Email: shirish@44dudley.co.zaDirectorShirish KalianEmail: shirish@44dudley.co.zaActivities: The firm’s expertise is in thefields of general and commercial litigation,corporate, corporate law and insolvency law.Shrosbree Trustees11 Bird Street, Central, Port Elizabeth 6001,South Africa.Tel: +27 (41) 585 7738Fax: +27 (41) 585 7768Email: shrosliq@iafrica.comManaging MemberGary ShrosbreeActivities: Administration of estates, judicialmanagements and winding-ups, specialising ininsolvency administrations and assetrecoveries.St. Adens International609 Walker Street, Muckleneuk,Pretoria 0002, South Africa.Tel: +27 (12) 344 4315Fax: +27 (12) 344 4318Email: stadens@stadens.co.zaWebsite: www.stadens.co.zaDirectorMari HaywoodManaging DirectorCorne van StadenActivities: Major business entailssequestrations; liquidations; cross-borderinsolvencies; curatorships; deceased estates;divorce settlements; insolvency enquiries;judicial management; pension and providentfund liquidations; Section 311 arrangementsand compromises.Standard & Poor’sUnit 4, 1 Melrose Boulevard, Melrose Arch,Johannesburg 11111, South Africa.Tel: +27 (11) 2141 990Fax: +27 (11) 2141 98Strauss Trustees CCPO Box 202, Joubertina 6410, South Africa.Tel: +27 (42) 273 2007Fax: +27 (86) 655 9111Email: nardus@workmail.co.zaMemberN. FerreiraEmail: nardus@workmail.com.zaActivities: <strong>Insolvency</strong> practitioners andjudicial managers in the Eastern Cape area.The Association of <strong>Insolvency</strong>Practitioners of Southern AfricaPO Box 10527, Johannesburg 2000,South Africa.Tel: +27 (11) 447 3877Fax: +0866 916 987Email: aipsaadmin@icon.co.zaWebsite: www.aipsa.co.zaAdministration OfficeJoy Glanville-PellowActivities: A voluntary association formedin 1986. Main objective: uphold, improvestandards of professionalism andqualifications of practitioners in South Africa.Van Rooyen-Fisher TrusteesGround floor, Bank Forum Building,337 Bronkhorstreet, Brooklyn, South Africa.Tel: +27 (12) 346 7430Fax: +27 (12) 346 7433Email: info@vrftrustees.co.zaChief ExecutiveJacques FisherEmail: jacques@vrftrustees.co.zaActivities: Administration of liquidated,sequestrated and deceased estates.White & Case LLPThe Reserve, 54 Melville Road, Illovo,Johannesburg, 2196, PO Box 784440,Sandton 2146, South Africa.Tel: +27 (11) 341 4000Fax: +27 (11) 341 1900Website: www.whitecase.comPartnerSteve RaneyTel: +27 (11) 341 4012Email: sraney@whitecase.comJoshua ParbhuTel: +27 (11) 341 4015Email: jparbhu@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.Zeena <strong>Insolvency</strong> PractitionersP/L512 Bastille Boulevard, Zwavelpoort,South Africa.Tel: +27 (12) 687 4<strong>13</strong>1Fax: +27 (12) 687 1418Email: msymes@zeena.co.zaManaging DirectorMaryna SymesTel: +27 0828215155Activities: New company whose directorshave dealt with insolvencies and liquidationssince 1987 and have a vast understanding andknowledge in the local and internationalmarkets.SOUTH KOREABMC Group<strong>13</strong>28 Ho Shindongafastel 939, Inkye-Dong,Paldal-Gu, Suwon-City, Gyeonggi-Do, Korea.Tel: +82 (31) 235 9580Fax: +82 (31) 236 9580Website: www.bmcgroup.comActivities: <strong>Restructuring</strong>, class action,litigation, M&A, and investor communications.Superior technology, expertise and greatestcost efficiencies in data and claimsmanagement.Deloitte6th Floors, Tae Young Building, 252-5,Kongdeok-Dong, Mapo-Gu, Seoul 121-020,Korea.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesYoung Soon ChangTel: +82 (2) 6676 2010Email: yschang@deloitte.comActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.Kim & ChangSeyang Building, 223 Naeja-dong,Jongno-gu, Seoul 110-720, Korea.Tel: +82 (2) 3703 1114/1108Fax: +82 (2) 3703 1590Email: lawkim@kimchang.comWebsite: www.kimchang.comPartnerJin Yeong ChungContactDo Young KimActivities: Extensive experience inrepresenting and counselling debtors,creditors and other parties-in-interest inconnection with Korean insolvencyproceedings and restructurings.Lee & Ko18th Floor, Hanjin Main Building, 118,Namdaemunno 2-ga, Seoul 100-770, Korea.Tel: +82 (2) 772 4000Fax: +82 (2) 772 4001/2Email: mail@leeko.comWebsite: www.leeko.com233

Representative AttorneyByung Jae KimTel: +82 (2) 2191 3103Email: kbj@leeko.comPartner AttorneyTae Soo JungTel: +82 (2) 772 4387Email: tsj@leeko.comActivities: Experience with the many crossborderinsolvency cases related to Koreancompanies.Standard & Poor’sSeian Building, 2nd Floor, 116 Shinmunro1-ga, Jongno-gu, Seoul 110-700, Korea.Tel: +82 (2) 2022 2300Fax: +82 (2) 2022 2345Yoon & Yang LLC19, 22, 23, 34 Floors, ASEM Tower,159-1 Samsung-Dong, Gangnam-Gu,Seoul <strong>13</strong>5-798 Korea.Tel: +82 (2) 6003 7000Fax: +82 (2) 6003 7800Website: www.yoonyang.comManaging PartnerHoil YoonTel: +82 (2) 6003 7501Email: yoon.hoil@yoonyang.comActivities: Acts as counsel for interestedparties such as creditors (or creditors’committees), debtors, trustees, shareholders,acquirers and financiers.SPAINDeloitteTorre Picasso, Plaza Pablo Ruiz Picasso 1,E-28020 Madrid, Spain.Website: www.deloitte.comHead of <strong>Restructuring</strong> ServicesEnrique DominguezTel: +34 (91) 514 5000 ext. 1070Email: edominguez@deloitte.esActivities: Deloitte advises stakeholders inunderperforming or distressed businessesincluding creditors and directors. Servicesinclude insolvency appointments, financialrestructuring, turnaround and businessreviews.DLA Piper SpainPaseo de la Castellana, 35 Planta 2. E-28046Madrid, Spain.Tel: +34 (91) 319 1212Fax: +34 (91) 788 7399Website: www.dlapiper.comPartnersLuis MartinTel: +34 (91) 790 1689Email: luis.martin@dlapiper.comJavier Diaz-GalvezTel: +34 (91) 788 7358Email: javier.diaz-galvez@dlapiper.comGarriguesHermosilla 3, Madrid, Spain.Tel: +34 (91) 514 5200Fax: +34 (91) 399 3779Website: www.garrigues.com<strong>Restructuring</strong> & <strong>Insolvency</strong> Head PartnerAntonio FernándezTel: +34 (91) 514 5455Email:antonio.fernandez.rodriguez@garrigues.comActivities: Their team of leading lawyers hasdecades of experience in turn-around,corporate recovery, refinancing and all typesof insolvencies, including cross-borderinsolvency. It comprises experts with abackground in law or economics, who worktogether in contentious and non-contentiousinsolvency, affecting debtors, banks orcreditors for troubled companies.Gómez-Acebo & PomboAbogados, S.L.P.Paseo de la Castellana 216,E-28046 Madrid, Spain.Tel: +34 (91) 582 9100Fax: +34 (91) 582 9114Email: info@gomezacebo-pombo.comWebsite: www.gomezacebo-pombo.comContactJose Maria Alvarez-ArjonaEmail: jmalvarez@gomezacebo-pombo.comTel: +34 (91) 582 9278Activities: Extensive experience in financialcrisis related legal advice, conducting andproviding legal assistance on insolvency,bankruptcy, winding-up and receivershipproceedings, acting as counsel to financialinstitutions, senior secured lenders and todebtors on representing acquirers and sellersof companies and assets in acquisitions anddivestitures of insolvent and other highlyleveraged companies and turn-aroundtransactions.Hogan Lovells International LLPPaseo de la Castellana 51, Planta 6ª,E-28046 Madrid, Spain.Tel: +34 (91) 349 8200Fax: +34 (91) 349 8201Email: enquiry@hoganlovells.comWebsite: www.hoganlovells.comPartnerJosé Luis HuertaActivities: Experts advising on businessrestructuring and insolvency, includingcorporate restructuring, formal insolvenciesand creditor representation.<strong>Insolvency</strong> Services in Spain, S.L.Galeon 4, Portal A, Bajo A,E-28042 Madrid, Spain.Tel: +34 (650) 169 954Fax: +34 (91) 320 3920Website: www.insolvencyservicesinspain.comManaging PartnerGeorge LumbyEmail: georgelumby@insolservices.comActivities: Provision of insolvency servicesto insolvency practitioners not resident inSpain in relation to assets or companies inSpain. Appointments in Spain as insolvencyadministrator or liquidator.KPMGEdificio Torre Europa, Paseo de la Castellana95, E-28046 Madrid, Spain.Tel: +34 (9) 1456 3400Fax: +34 (9) 1555 0<strong>13</strong>2Website: www.kpmg.esHead of <strong>Restructuring</strong>, KPMG in SpainAngel MartinTel: +34 (9) 1456 3525Email: restructuring@kpmg.esHead of Advisory, KPMG in SpainHilario AlbarracinTel: +34 (9) 1456 3484Email: advisory@kpmg.esActivities: KPMG’s restructuringprofessionals can provide an opportunity forstressed and distressed businesses to stabiliseand implement a process of strategic,operational and financial change. The aim isto turn around the performance of abusiness and to help generate outstandingand lasting value for the stakeholders.Latham & Watkins LLPMaría de Molina 6, 4th Floor,E-28006 Madrid, Spain.Tel: +34 (91) 791 5000Fax: +34 (902) 882 228Website: www.lw.comPartnersPaco IsoXavier PujolContactsJohn HoughtonTel: +44 (20) 7710 1000Mitchell SeiderTel: +1 (212) 906 1200Jan BakerTel: +1 (212) 906 1200Peter GilhulyTel: +1 (2<strong>13</strong>) 485 1234Activities: <strong>Global</strong> law firm with more than2000 lawyers in 31 offices worldwide,including over 500 lawyers throughoutEurope. Offers a full range of services ininsolvency, workouts and restructurings andis acknowledged as a leading bankruptcylender law firm.PEREZ-LLORCAAlcalá 61, E-28014 Madrid, Spain.Tel: +34 (91) 436 0420Fax: +34 (91) 436 0430Email: ppl@perezllorca.comWebsite: www.perezllorca.comSenior PartnerPedro Pérez-LlorcaTel: +34 (91) 436 0425Partner of the Litigation & ArbitrationAreaFelix J. MonteroTel: +34 (91) 426 3<strong>13</strong>8Email: fmontero@perezllorca.comActivities: Advice on all aspects ofinsolvency and restructuring to all legalentities, including assistance with corporate,litigation, tax and labour issues.PEREZ-LLORCADiputación, 260 piso 4°, E-08007 Barcelona,Spain.Tel: +34 (93) 481 3075Fax: +34 (93) 481 3076Email: pll@perezllorca.comWebsite: www.perezllorca.comPartner Responsible for the BarcelonaofficeGerard SerraEmail: gserra@perezllorca.comPartner of the Litigation & ArbitrationAreaEduardo VillellasEmail: evillellas@perezllorca.comActivities: Advice on all aspects of<strong>Insolvency</strong> and restructuring to all legalentities, including assistance with corporate,litigation, tax and labour issues.PricewaterhouseCoopers Asesoresde Negocios, S.L.Paseo de la Castellana, 259 B,E-28046 Madrid, Spain.Tel: +34 (9) 1568 4373Fax: +34 (9) 1568 4203Website: www.pwc.esPartner, BRS ResponsibleEnrique BujidosEmail: enrique.bujidos@es.pwc.comDirectorFrancisco GarciaTel: +34 (9) 1658 4055Email:francisco_jose.garcia.oliva@es.pwc.comActivities: BRS team advises debtors,creditors, and other stakeholders in all formsof restructurings and insolvency matters.\n\nRoland Berger StrategyConsultants S.A.Paseo de la Castellana 140, 3rd Floor,E-28046 Madrid, Spain.Tel: +34 (91) 564 7361Fax: +34 (91) 564 7275Website: www.rolandberger.comPartnerChristoph BeselerTel: +34 (91) 590 3141Email:christoph_beseler@es.rolandberger.com234

Activities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Sca Legal, S.L.P.José Abascal 55, E-28003 Madrid, Spain.Tel: +34 (91) 781 5040Fax: +34 (91) 781 5041Email: madrid@sca-legal.comWebsite: www.sca-legal.comPartnerPedro MoreiraEmail: pedro.moreira@sca-legal.comContactMarcos ArbeloaEmail: arbeloa@sca-legal.comActivities: Represents creditors and debtorson in and out-of-court financialrestructurings, focuses on the main issuesarising out of corporate insolvencies.Simmons & Simmons LLPCalle Miguel Angel, 11-5ª Planta,E-28010 Madrid, Spain.Tel: +34 (91) 426 2640Fax: +34 (91) 578 2157Website: www.simmons-simmons.comCountry Head (Spain)Andres MochalesTel: +34 (91) 426 2402Email:andres.mochales@simmons-simmons.comOf CounselRicardo OriveTel: +34 (91) 426 2402Email: ricardo.orive@simmons-simmons.comActivities: Advice to creditors or debtors inrestructuring operations and insolvencysituations (national or international) andjudicial proceedings, including employmentmatters.SJ Berwin LLPC/Claudio Coello, 37, 1° planta,E-28001 Madrid, Spain.Tel: +34 (91) 426 0050Fax: +34 (91) 426 0066Email: madrid@sjberwin.comSquire Sanders (UK) LLPPlaza Marques de Salamanca 3-4,E-28006 Madrid, Spain.Tel: +34 91 426 4840Fax: +34 (91) 435 9815Website: www.squiresanders.com<strong>Restructuring</strong> & <strong>Insolvency</strong> <strong>Global</strong>Practice Group LeaderStephen D. LernerLocal <strong>Restructuring</strong> & <strong>Insolvency</strong>ContactsFernando Gonzalez, Jesus Carrasco, Silvia Ara,Paula Casado, Ignacio Triguero, IgnacioGurpeguiActivities: The restructuring & insolvencygroup has over 100 restructuring andinsolvency lawyers who represent financialinstitutions, distressed companies, insolvencypractitioners, creditors’ committees,investors, and strategic and financial buyers oftroubled companies.Standard & Poor’sNo. 5 Calle Marques de Villamejor,E-28006 Madrid, Spain.Tel: +34 (91) 389 6969Fax: +34 (91) 389 6949SWEDENAdvokatfirman VingePO Box 11025, Nordstadstorget 6,SE-40421 Gothenburg, Sweden.Tel: +46 (10) 614 1000Fax: +46 (10) 614 1700Website: www.vinge.comManaging PartnerOlof JislandPartnerMorgan HallénActivities: Full range of commercial law,including insolvency services: restructuringand reorganisations, liquidations, mergers andaquisitions, litigation.Advokatfirman VingeBox 4255, Ostergatan 30,SE-203<strong>13</strong> Malmo, Sweden.Tel: +46 (40) 664 5500Fax: +46 (40) 664 5501Website: www.vinge.comManaging PartnerRikard AzeliusPartnerErik GabrielsonActivities: Full range of commercial law,including insolvency services: restructuringand reorganisations, liquidations, mergers andaquisitions, litigation.Advokatfirman VingePO Box 1703, Smålandsgatan 20,SE-111 87 Stockholm, Sweden.Tel: +46 (8) 614 3000Fax: +46 (8) 614 3190Website: www.vinge.comPartnersBo AdrianzonRobert WikholmContactFabian EkebladActivities: Full range of commercial law,including insolvency services: restructuringand reorganisations, liquidations, mergers andaquisitions, litigation.European Resolution CapitalPartners LtdHovslagargatan 5, SE-111 48 Stockholm,Sweden.Tel: +46 (8) 5000 <strong>13</strong>60Email: mariana.raymond@eurescap.comGärde Wesslau AdvokatbyråPO Box 1422, SE-251 14 Helsingborg,Sweden.Tel: +46 (42) 453 7900Fax: +46 (42) 141 055Email: skane@garde.seWebsite: www.garde.sePartnerPeter ThörnwallTel: +46 (42) 453 7901Email: peter.thornwall@garde.seActivities: Receivership, reconstruction andliquidation proceedings.Grant ThorntonSveavagen 20, Box 7623,SE-103 94 Stockholm, Sweden.PartnerPar EkengrenKPMG ABTegelbacken 4A, PO Box 16106,SE-103 23 Stockholm, Sweden.Tel: +46 (8) 723 9100Fax: +46 (8) 105 258Email: info@kpmg.seWebsite: www.kpmg.seManaging PartnerHelene WillbergEmail: helene.willberg@kpmg.seDirector, <strong>Restructuring</strong>Björn DahlTel: +46 (8) 723 9386Email: bjorn.dahl@kpmg.seActivities: KPMG AB provides financial andoperational restructuring to its clientsthroughout the economic cycle; throughstress, distress, reorganisation and growth.PwC Corporate Finance BusinessRecovery ServiceTorsgatan 21, SE-1<strong>13</strong> 97 Stockholm, Sweden.Tel: +46 (7) 0929 3<strong>13</strong>2Fax: +46 (10) 214 3<strong>13</strong>2Email: per.storbacka@se.pwc.comPartnerPer StorbackaActivities: Extensive practical experiencesupporting troubled corporates and theirstakeholders.Roland Berger StrategyConsultantsSveavägen <strong>13</strong>-15, Hus 2, 16 tr.,SE-111 57 Stockholm, Sweden.Tel: +46 (8) 410 438 00Fax: +46 (8) 410 438 01Website: www.rolandberger.comPartnerJan BeckemanTel: +46 (8) 410 438 91Email: jan_beckeman@se.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.SetterwallsArsenalsgatan 6, PO Box 1050,SE-101 39 Stockholm, Sweden.Tel: +46 (8) 5988 9000Fax: +46 (8) 5988 9090Email: stockholm@setterwalls.seWebsite: www.setterwalls.seExecutive PartnerJoakim EdoffTel: +46 (3) 1701 1733Email: joakim.edoff@setterwalls.sePartnersThomas EhrnerTel: +46 (8) 5988 9005Email: thomas.ehrner@setterwalls.seOdd SwartingTel: +46 (8) 5988 9046Email: odd.swarting@setterwalls.seMarketing DirectorMarie ÖhrstömTel: +46 (8) 5988 9115Email: moh@setterwalls.seActivities: Have solid experience and anational and international expertise withinthe field - insolvency prevention, businessrestructuring, composition, liquidation andbankruptcy.Standard & Poor’sMaster Samuelsgaten 6, PO Box 1753,SE-111 87 Stockholm, Sweden.Tel: +46 (8) 440 5900Fax: +46 (8) 440 5901Swedbank AB (publ)SE-105 34 Stockholm, Sweden.Tel: +46 (8) 5859 3457Senior AdvisorErik SelanderEmail: erik.selander@swedbank.comContactMarie-Anne Ehrngren235

White & Case Advokat ABBiblioteksgatan 12, Box 5573,SE-114 85 Stockholm, Sweden.Tel: +46 (8) 5063 2300Fax: +46 (8) 611 2122Website: www.whitecase.comPartnerMagnus WennerhornTel:+46 (8) 5063 2370Email: magnus.wennerhorn@whitecase.comActivities: White & Case is a global law firmwith over 2000 lawyers in 26 countries. Theirfinancial restructuring and insolvency group isa worldwide practice consisting of over 160restructuring and insolvency lawyers. Theyare a globally recognised leader in complexcross-border insolvencies and workouts, andthey represent clients in all aspects ofrestructurings, workouts and insolvencies,including both transactional and litigationmatters. Recent representations include manyof the world’s largest restructuring cases andout-of-court workouts.WistrandRegeringsgatan 65, PO Box 7543,SE-103 93 Stockholm, Sweden.Tel: +46 (8) 5072 0000Fax: +46 (8) 5073 0000Email: sthlm@wistrand.seWebsite: www.wistrand.sePartnersMargareta AnderssonEmail: margareta.andersson@wistrand.seChristian BergqvistTel: +46 (8) 5072 0081Email: christian.bergqvist@wistrand.seLars-Olof SvenssonTel: +46 (8) 5072 0011Email: lars-olof.svensson@wistrand.seActivities: Wistrand has a long experienceof working with insolvency issues and hashandled some of the highest profileinsolvencies in Sweden.WistrandLilla Bommen 1, PO Box 11920,SE-404 39 Gothenburg, Sweden.Tel: +46 (31) 771 2100Fax: +46 (31) 771 2150Email: gbg@wistrand.seWebsite: www.wistrand.sePartnersMargareta AnderssonTel: +46 (31) 771 2112Email: margareta.andersson@wistrand.seJörgen WistrandTel: +46 (31) 771 2172Email: jorgen.wistrand@wistrand.seActivities: Wistrand has a long experienceof working with insolvency issues and hashandled some of the highest profileinsolvencies in Sweden.SWITZERLANDApplebyTalstrasse 37, CH-8001 Zurich, Switzerland.Tel: +41 (44) 2<strong>13</strong> 6230Fax: +41 (44) 2<strong>13</strong> 6234Email: zurich@applebyglobal.comWebsite: www.applebyglobal.comManaging PartnerJonathan VanderkarEmail: jvanderkar@applebyglobal.comActivities: Handle major insolvency andrestructuring matters, liquidation of all types,and advising on creditors’ rights and schemesof arrangements.Bloch & Partner in associationwith SNR DentonBahnhofstrasse 3, CH-6340 Baar/Zug,Zurich, Switzerland.Tel: +41 (44) 914 4343Fax: +41 (44) 914 4300Website: www.snrdenton.comManaging PartnerRobert SchlupBridgeLink AGCentralbahnstrasse 7, PO Box,CH-4002 Basle, Switzerland.Tel: +41 (61) 206 9090Fax: +41 (61) 206 9093Email: info@bridgelink.chWebsite: www.bridgelink.chPartnersRemo RichliPaul-Andre WengerActivities: Mergers and acquisitions, MBO,MBI, equity financing, businesses successions,pre and post-merger advice. Full service: law,tax, finance. Regions: Western Europe and US.Buhlmann & Fritschi LawyersTalacker 42, CH-8001 Zurich, Switzerland.Tel: +41 (1) 212 2740Fax: +41 (1) 212 2766Email: eugen.fritschi@b-law.chWebsite: www.b-law.chContactEugen FritschiActivities: Cross-border insolvencyprocedure.Bürgi Nägeli LawyersGrossmünsterplatz 9, CH-8001 Zurich,Switzerland.Tel: +41 (44) 268 4000Fax: +41 (44) 268 4005Email: info@bnlawyers.chWebsite: www.bnlawyers.chLawyer, Notary and Private ReceiverUrs BürgiActivities: Regularly advises in insolvencyand creditors’ rights, debt recovery, companyreorganisation, probate proceedings,litigation, arbitration.DeptCollectionAgencyQualifida AG, Grossmünsterplatz 6,CH-8001 Zurich, Switzerland.Tel: +41 (44) 268 9904Fax: +41 (44) 268 9909DirectorRosemarie Hug-SchneiderActivities: Regularly advises in insolvencyand creditors’ rights, debt collectingrecovery, company reorganisation, probateproceedings.Ernst & Young AGMaagplatz 1, CH-8010 Zurich, Switzerland.Tel: +41 (58) 286 4734Fax: +41 (58) 286 3025Email: peter.dauwalder@ch.ey.comWebsite: www.ey.com/ch/tasSenior ManagerMichael MärkiTel: +41 (58) 286 3423Email: michael.maerki@ch.ey.comPartnerPeter DauwalderEmail: peter.dauwalder@ch.ey.comActivities: Support of creditors, debtors,liquidators, banks and judges; contingencyplanning, investigation, due diligence,valuation, M&A, legal, tax, working capitalimprovement.HomburgerPrime Tower, Hardstrasse 201,CH-8005 Zurich, Switzerland.Tel: +41 (43) 222 1000Fax: +41 (43) 222 1500Email: lawyers@homburger.chWebsite: www.homburger.chPartnersUeli HuberTel: +41 (43) 222 1504Email: ueli.huber@homburger.chBenedikt MaurenbrecherTel: +41 (43) 222 1514Email:benedikt.maurenbrecher@homburger.chGeorg NaegeliTel: +41 (43) 222 1717Email: georg.naegeli@homburger.chDaniel HaeberliTel: +41 (43) 222 1633Email: daniel.haeberli@homburger.chActivities: <strong>Restructuring</strong>s, refinancings;insolvency related corporate, corporatefinance and commercial advice; insolvencyand restructuring proceedings, coordinationbetween domestic and foreign proceedings.Kellerhals Attorneys at lawHirschgässlein 11, CH-4010 Basel,Switzerland.Tel: +41 (58) 200 3000Fax: +41 (58) 200 3011Email: info@kellerhals.chWebsite: www.kellerhals.chContactProf. Dr. Daniel StaehelinEmail: daniel.staehelin@kellerhals.chActivities: Corporate restructuring,representation of creditors and debtors innational and international bankruptcy andcomposition proceedings, litigation, debtcollection.KPMGBadenerstrasse 172, CH-8026 Zurich,Switzerland.Website: www.kpmg.chLenz & StaehelinBleicherweg 58, CH-8027 Zurich,Switzerland.Tel: +41 (58) 450 8000Fax: +41 (58) 450 8001Email: tanja.luginbuhl@lenzstaehelin.comWebsite: www.lenzstaehelin.comPartnerTanja LuginbühlActivities: <strong>Restructuring</strong>s (corporate anddebt) of companies in financial distress,representing creditors in Swiss insolvencyproceedings, insolvency related litigation.Lenz & Staehelin30 route de Chêne, PO Box 615,CH-1211 Geneva 17, Switzerland.Tel: +41 (58) 450 7000Fax: +41 (58) 450 7001Email: daniel.tunik@lenzstaehelin.comWebsite: www.lenzstaehelin.comPartnerDaniel TunikActivities: Representation of creditors ofdistressed companies in bankruptcy courts;advice on restructurings and reorganisationplans.PricewaterhouseCoopers Limited.Birchstrasse 160, PO Box CH-8050 Zurich,Switzerland.Tel: +41 (58) 792 1568Fax: +41 (58) 792 4410Email: reto.brunner@ch.pwc.comWebsite: www.pwc.ch/brsDirectorReto Brunner236

Activities: Extensive practical experiencesupporting troubled corporates and theirstakeholders, including financial restructuring,operational turnaround, contingency, planning,optimised exit services, working capitalmanagement/ and cost reduction.Roland Berger AG StrategyConsultantsHolbeinstraße 22, CH-8008 Zurich,Switzerland.Tel: +41 (44) 336 8600Fax: +41 (44) 336 8709Website: www.rolandberger.comPartnersJoost GeginatTel: +41 (44) 336 8620Email: joost_geginat@ch.rolandberger.comBeatrix MorathTel: +41 (44) 384 8630Email: beatrix_morath@ch.rolandberger.comActivities: Roland Berger StrategyConsultants is a leading global strategyconsultancy. Within their restructuringpractice they focus on complex operationaland financial restructurings/distressed M&Aas well as insolvency support.Transliq AGSchwanengasse 5/7, CH-3001 Bern,Switzerland.Tel: +41 (31) 326 3050Fax: +41 (31) 312 8424Email: info@transliq.chWebsite: www.transliq.chAttorney at LawKurt StöckliChartered AccountantUrs StöckliActivities: Bankruptcy proceedings,compositions with creditors, ordinarycomposition agreements, compositionagreement with assignment of assets,liquidations.Walder Wyss LtdSeefeldstrasse 123, PO Box 1236,CH-8034 Zurich, Switzerland.Tel: +41 (44) 498 9898Fax: +41 (44) 498 9899Email: reception@walderwyss.comWebsite: www.walderwyss.comPartnersChristoph StäubliTel: +41 (44) 498 9530Email: christoph.staeubli@walderwyss.comUeli SommerTel: +41 (44) 498 9516Email: ueli.sommer@walderwyss.comActivities: <strong>Restructuring</strong> and insolvencyteam regularly advises on distressed businesssituations; representing stakeholders -frequently so in an international context - incorporate restructurings and insolvencyproceedings and conduct enforcement andbankruptcy related litigations.TAIWANLee and Li, Attorneys-at-Law7F, No. 201 Tun Hua N. Road,Taipei 105, Taiwan.Tel: +886 (2) 2715 3300Fax: +886 (2) 27<strong>13</strong> 3966Website: www.leeandli.comPartnerC.T. ChangEmail: ctchang@leeandli.comAct