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.


Newsworthy

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.

Authors
Juan Ferré
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions