United States: EuroResource--Deals And Debt

Global—On 10 January 2013, the U.S. Court of Appeals for the Second Circuit denied a request by participating bondholders in 2005 and 2010 restructurings of Argentina's defaulted bond debt to have New York State's highest court resolve a dispute with holdout bondholders regarding the meaning of an "equal treatment" or "pari passu" clause in the original bond indenture. See NML Capital, Ltd. v. Republic of Argentina, No. 12-105(L) (2d Cir. Jan. 10, 2013) (summary order). Participating bondholders had complained that the legal question concerning which debt takes precedence has provoked volatility in the bond markets and should be resolved by the state court whose law governs the contract. They argued that the meaning of a pari passu clause in a sovereign debt case has not been decided by a New York state court, and that if holdout bondholders—principally private equity companies—are allowed to disrupt Argentina's sovereign debt restructuring, countries may choose London or Singapore (rather than New York) as the base from which to issue debt.

On 21 November 2012, a U.S. district court ordered Argentina to pay $1.3 billion to holdout bondholders no later than 15 December 2012. The ruling came on the heels of the Second Circuit's ruling in NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246 (2d Cir. 2012), where the court upheld a lower court order enjoining Argentina from making payments on its restructured debt without making comparable payments to holdout bondholders. Argentina received a temporary reprieve of its obligation to make payments to holdout bondholders on 28 November 2012, when the Second Circuit stayed the ruling until it has an opportunity to hear the merits of Argentina's appeal, scheduled for argument on 27 February 2013.

Global—On 4 December 2012, a U.S. bankruptcy judge ruled that the decision by Mexican glassmaker Vitro SAB de CV ("Vitro") to shift property secretly out of the U.S. and to reincorporate a number of subsidiaries offshore amounted to fraud under U.S. law, justifying the commencement of involuntary bankruptcy cases against the subsidiaries. In In re Vitro Asset Corp., 2012 BL 317004 (Bankr. N.D. Tex. Dec. 4, 2012), the court held that the actions, including reincorporating five subsidiaries in the Bahamas and failing to disclose information to U.S. courts in an effort to frustrate a bid by a group of hedge fund bondholders to push Vitro's U.S. subsidiaries into bankruptcy, constituted "special circumstances" allowing creditors to file an involuntary bankruptcy case against a company "when there is fraud, trick, artifice, or scam by an alleged debtor." The court also ruled that, on the basis of rulings handed down by New York state courts, the bondholders' claims were not subject to bona fide dispute within the meaning of section 303(b)(1) of the Bankruptcy Code.

The actions were undertaken by Vitro in connection with its Mexican bankruptcy case (concurso) under a controversial plan of reorganization that U.S. courts have refused to recognize because it effectively extinguishes the guarantee claims of U.S. bondholders by releasing non-debtor guarantors under circumstances that are repugnant to U.S. bankruptcy law. See Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV (In re Vitro SAB de CV), 2012 WL 5935630 (5th Cir. Nov. 28, 2012). Concern over the restructuring and Vitro's concurso, which has been recognized under chapter 15 of the U.S. Bankruptcy Code, has prompted several U.S. lawmakers to write to Mexico's embassy in the U.S. and to U.S. Secretary of State Hillary Rodham Clinton, warning of possible consequences for U.S. cross-border investment.

Europe—European Union leaders agreed on 13 December 2012 to place banks in the euro area under a single supervisor, calling it a concrete measure to maintain the viability of the currency as well as a step toward a broader economic union. The agreement on new banking supervision would put between 100 and 200 major banks under the direct oversight of the European Central Bank ("ECB"), leaving thousands of smaller institutions to be overseen principally by national regulators. The new system is designed to strengthen oversight of a sector that, under the supervision of national regulators, failed to prevent banks from amassing so much debt that they endanger the finances of eurozone states and threaten the future of the currency. The supervision mechanism, whose details have yet to be finalized, is to be fully operational by March 2014 and is subject to the approval of the European Parliament and national legislatures before it goes into effect.

Europe—On 12 December 2012, the European Commission ("EC") proposed reforms to the EC Insolvency Regulation (Council Regulation (EC) No 1346/2000) (the "Regulation") designed to modernise the current rules on cross-border insolvency proceedings. The preamble to the proposal states that "the new rules will shift focus away from liquidation and develop a new approach to helping businesses overcome financial difficulties, all the while protecting creditors' right to get their money back."

Key elements of the proposed reforms include:

  • Broadening the scope of the Regulation by revising the definition of "insolvency proceedings" to include hybrid and pre-insolvency proceedings, as well as debt discharge proceedings and other insolvency proceedings for natural persons;

  • Clarification of the jurisdictional rules;

  • More efficient administration of insolvency proceedings by: (i) giving courts the discretion to refuse a petition to commence a secondary (non-main) proceeding if it is deemed unnecessary to protect the interests of local creditors; (ii) abolishing the requirement that secondary proceedings be winding-up proceedings; and (iii) improving coordination between main and secondary proceedings;

  • Enhanced public access to court decisions in cross-border insolvency cases and standardization of creditor claim forms; and

  • Coordination of insolvency proceeding involving affiliated entities.


Jones Day advised Taiwan Semiconductor Manufacturing Company, Ltd. ("TSMC") in connection with the €1.11 billion acquisition of five percent of the shares in ASML Holding N.V. ("ASML"), with a view toward accelerating the development and industrialisation of key next-generation semiconductor manufacturing technologies. As of 24 November 2012, TSMC holds an aggregate of 5 percent in ASML. ASML is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry. The company manufactures machines for the production of integrated circuits, such as DRAM memory, flash memory and CPUs.

The 2013 edition of Chambers UK: A Client's Guide to the UK Legal Profession has named 27 Jones Day London Office lawyers as among the leading lawyers in Britain. The directory also ranks 20 Firm practice areas in London, including first-tier rankings in the "Corporate/M&A: Mid-Market" and "Dispute Resolution: Highly Regarded" categories.

Juan Ferré has joined Jones Day to spearhead the firm's Madrid Business Restructuring & Reorganization Practice. Mr. Ferré is a leading bankruptcy lawyer in Spain with more than 15 years of experience in restructuring and insolvency. He arrives at Jones Day from the boutique restructuring firm Pluta in Madrid where he was Partner in Charge.

Jones Day is advising Baxter International Inc. ("Baxter") regarding the antitrust aspects of its proposed acquisition of Gambro AB, a privately held dialysis product company based in Lund, Sweden, for SEK26.5 billion (approximately US$4 billion). Gambro is a global medical technology company focused on developing, manufacturing and supplying dialysis products and therapies for patients with acute or chronic kidney disease. The acquisition gives Baxter a comprehensive dialysis product portfolio, complements Baxter's global home dialysis offerings and positions the company to better meet the evolving needs of the large and growing dialysis market.

Jones Day advised General Motors Company in connection with the sale of its Strasbourg plant to Punch Metals International N.V. The transaction also includes a long-term supply agreement with ZF, a German gearbox giant supplying Jaguar, Audi and BMW. ZF has committed to purchase a large number of drivelines from the plant until 2017. The transaction was approved by the Strasbourg court on 3 January 2013 in the course of creditor conciliation proceedings. All current employees of the operations will be maintained by the new owner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Juan Ferré
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.