Recent Developments
Global—On 26 July 2013, the French government
filed an amicus curiae
("friend of the court") brief supporting Argentina's
petition requesting the U.S. Supreme Court to review a ruling
handed down by the U.S. Court of Appeals for the Second Circuit on
26 October 2012 (see NML Capital, Ltd. v.
Republic of Argentina, 699 F.3d 246 (2d Cir.
2012)) upholding a lower court order enjoining Argentina from
making payments on restructured defaulted debt without making
comparable payments to holdout bondholders. The protracted
legal saga arising from Argentina's US$100 billion default in
2001 has come to involve the International Monetary Fund (the
"IMF"), the U.S. and, now, France due to its implications
for future sovereign-debt restructurings. In its amicus
brief, France argues, among other things, that: (i) the Second
Circuit's ruling deviates from fundamental tenets of equity
jurisprudence; and (ii) the Second Circuit's decision threatens
wider public interests. The IMF recently backed away from a plan to
support Argentina's appeal after U.S. Treasury officials
counseled that it was not the right time for the fund to get
involved in the case. The Supreme Court will not decide until this
fall whether to hear Argentina's appeal.
The UK— In a much-awaited judgment, In the
Matter of the Nortel Companies and In the Matter of the Lehman
Companies, [2013] UKSC 52 (24 July 2013), the
UK Supreme Court has decided that the liability of a company in
administration or liquidation to contribute to an underfunded
defined benefit pension fund following a Financial Support
Direction or Contribution Notice issued by the UK Pensions
Regulator after the commencement of the insolvency process was a
provable debt ranking equally with other unsecured
creditors. Crucially, it was held that it was not an
expense of the administration or liquidation which would cause it
to rank ahead of all creditors, except fixed charge holders, and
the administrator's or liquidator's own remuneration. This
is a very helpful decision as it brings certainty after several
unsettled years over the treatment of these pension liabilities
which, because of their size, are able to alter fundamentally the
centre of gravity of any administration or liquidation. A more
detailed discussion of the ruling can be accessed
here.
The Netherlands—Effective 1 July 2013, Dutch
corporate governance legislation has been amended with respect to
shareholder rights, identification of shareholders and disclosure
obligations with the goal of improving interaction and dialogue
between companies and their shareholders. Key features of
the amendments include:
Amendments applying to all (listed and non-listed) Dutch
NV-companies (Naamloze
Vennootschappen). The statutory
threshold for shareholders eligible to request agenda items for a
general meeting was increased from one percent to three percent.
Thus, only one or more shareholders representing in aggregate at
least three percent of the issued share capital may exercise this
right. The alternative threshold—an aggregate capital
interest of at least €50 million—was abolished. However,
a company's articles of association may establish lower
threshold(s).
Amendments applying only to Dutch-listed companies (both
Dutch NV-companies and foreign companies whose shares are listed in
the Netherlands). The lowest threshold requiring
disclosure of substantial shareholdings (i.e., any direct or
indirect capital interest or controlling right) in a listed company
was reduced from five percent to three percent. Therefore, any
shareholder with shareholdings representing between three and five
percent of a listed company's stock on or after 1 July 2013
must notify the AFM (the Netherlands Authority for Financial
Markets) no later than 29 July 2013. The prior five percent
threshold continues to apply. The notification requirements now
also apply to gross short positions.
Rules allowing listed companies to identify shareholders and their
respective holdings were also introduced. The new identification
procedures apply only to shareholders representing at least 0.5
percent of the issued share capital. The company may request
disclosure of the information from certain institutions and
intermediaries. Any such request must be made no earlier than 60
days before a general meeting. Moreover, one or more shareholders
holding in aggregate at least 10 percent of a listed company's
stock may request that the company take steps to identify certain
shareholders. Any such request must be made no earlier than 60
days, and not later than 42 days, before a general meeting. All
requests must be disclosed on the company's web site.
Going forward, a listed company may circulate information among
identified shareholders (identified as described above) on its own
initiative or upon a request of one or more identified shareholders
representing in aggregate: (i) at least one percent of the listed
company's issued capital; or (ii) a capital interest of at
least €250,000 ("qualifying shareholders"). The
information to be circulated may relate solely to items placed on
the agenda of a general meeting. The company is obligated to
circulate the information as provided by qualifying shareholders,
unless: (i) the request was made later than six business days prior
to the day of the general meeting; (ii) the information is deemed
inaccurate or misleading; or (iii) due to the nature of the
information, it is not reasonable to expect the company to do so.
After the information has been circulated among the identified
shareholders, the listed company must immediately make the
information available on its web site.
Spain—Spanish Royal Decree Law 9/2013 of 12 July
2013 ("RDL 9/2013"), which adopts urgent measures to
guarantee the financial stability of Spain's electric power
infrastructure, was published in the Official Gazette on 13 July
2013. RDL 9/2013 includes, among other things, a new
remuneration framework for existing renewable energy projects. The
goal of the reforms is to reduce the electricity tariff deficit by
reducing the regulated costs of transmission, distribution and
renewable energy installations. The reforms are expected to have an
impact of more than €2.5 billion.
Newsworthy
Jones Day advised Canyon Capital Advisors LLC
("Canyon") in connection with the senior secured facility
for Spain-based casino and gambling multinational Codere S.A.
("Codere"). Canyon is the largest senior lender
involved in Codere's €120 million secured senior facility
maturing in December 2013. Codere's restructuring efforts
ensued after it failed to refinance a €120 million line of
credit that expired on 15 June. The family-owned company has been
plagued by exchange rate problems in Argentina, where Codere has
substantial operations, the forced shuttering of certain gambling
halls in Mexico due to a falling out with local authorities and
rising competition from online gambling.
Jones Day advised Inveravante Inversiones Universales,
S.L. in connection with the preparation of an investment and
shareholder agreement in order to incorporate Cofides, S.A. as
shareholder of Grupo Eólico Dominicano, S.A.
Spain-based Inveravante S.L. is a privately owned energy, finance
and real estate conglomerate that purchases or develops assets in
the energy sector in Spain and internationally.
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.
