European Union: EuroResource—Deals And Debt - February 2015

Last Updated: March 2 2015
Article by Corinne Ball

For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.

Recent Developments

The Netherlands—On 6 February 2015, the Dutch Supreme Court, in a marked departure from previous case law, held that the bankruptcy of a Dutch partnership does not automatically result in the bankruptcy of its partners. Even though a Dutch partnership does not have "legal personality" (i.e., legal rights and obligations, such as the right to enter into contracts, to sue and to be sued), it is still considered an independent and separate legal entity under Dutch law. In its ruling, the Supreme Court reasoned that, because the bankruptcy of a partnership does not inherently rule out the possibility that individual partners may satisfy the partnership's current obligations, individual partner bankruptcy automatically triggered by the bankruptcy of the partnership is incongruous with legal and economic reality. Instead, the Supreme Court explained, if a partnership is deemed bankrupt because it is insolvent (i.e., unable to pay its debts as such debts mature), insolvency proceedings with respect to individual partners should be commenced only if the individual partners are also insolvent. Explaining that Dutch insolvency legislation explicitly provides for a debt management proceeding (schuldsanering) for natural persons with commercial debts, the Supreme Court further concluded that automatic bankruptcy would unjustifiably deprive the partners of a bankrupt partnership of access to such proceedings. Finally, the Supreme Court ruled that pre-existing Dutch case law on this issue is no longer compatible with the European Insolvency Regulation (Regulation (EC) No 1346/2000 on insolvency proceedings) (31 May 2002), which provides that a European Union court can assert international jurisdiction over a foreign EU citizen only after individually assessing such citizen's standing.

Global—On 13 February 2015, the Chancery Division of the English High Court ruled, in a lawsuit brought by certain holders of euro-denominated exchange bonds issued by the Republic of Argentina during 2005 and 2010 debt restructurings seeking to gain access to €225 million (US$257 million) in interest payments set aside to make payments on the bonds, that such funds are governed by English law because the bonds and the governing trust indenture are governed by English law. However, although Mr Justice David Richards made a declaration to the effect that the earmarked funds are held by the Bank of New York Mellon ("BNY Mellon") on trusts governed by English law, the Judge declined to declare that BNY Mellon's obligations and liabilities are unaffected by the 2012 US court injunction. Judge Thomas Griesa of the US District Court for the Southern District of New York ruled on 23 February 2012 that Argentina was prohibited from making payments on exchange bonds without also making payments on bonds held by holdout bondholders. In his injunction, which was affirmed on appeal and declined review by the US Supreme Court, Judge Griesa also prohibited any entity from "aiding and abetting" any violation of his order. The English High Court's 13 February 2015 ruling effectively shuts Argentina out of the international debt markets.

Global—At a hearing held before US District Court Judge Thomas Griesa on 17 February 2015, Citibank NA ("Citibank") claimed that the February 2012 injunction blocking it from making payments on US$2.3 billion worth of dollar-denominated bonds governed by Argentine law would lead to "catastrophic" consequences—including criminal charges and potentially the loss of its banking license in the South America country. Both Argentina and the Clearing House Association LLC—an association of leading commercial banks dedicated to protecting the integrity of the banking system—supported Citibank's request for permission to service the debt, warning that continuation of the payment bar "would raise anew the question of whether bank customers can trust their own bank to comply with the most basic banking and custody obligation: paying customers their money". Holdout bondholders from Argentina's 2005 and 2010 debt restructurings countered that, far from being bonds solely governed by Argentine law, the bonds in question were marketed and sold around the world and therefore should remain subject to the payment injunction.

Newsworthy

Jones Day successfully obtained the enforcement of an ICC award in Morocco for a leading French industrial group against two Moroccan companies following the termination of a contract for the delivery of a cement plant. The Arbitral Tribunal seated in Geneva found in an award issued in 2011 that it had jurisdiction over the mother company in Morocco, given its involvement in the negotiation, performance and termination of the contract signed by its subsidiary. The Tribunal also noted that the mother company had left its subsidiary without sufficient assets to face a finding of liability after the termination. The Arbitral Tribunal further found the Moroccan mother company and its subsidiary jointly liable for damages, and arbitration costs, in excess of €20 million (US$22.4 million) before interest. The ICC award dismissed all claims submitted against Jones Day's client. In December 2012, a first instance court in Casablanca accepted the recognition of the ICC award against the Moroccan subsidiary but refused the enforcement against the mother company, on the ground that it was not a signatory of the contract containing the arbitration clause. In a landmark decision issued in January 2015 under the Moroccan arbitration law of 2007, the Court of Appeal reversed the first instance court decision and fully granted the recognition of the ICC award against both Moroccan companies.

Jones Day advised Inflexion Private Equity in connection with the £105 million (US$162 million) sale of Aspen Pumps ("Aspen"), a global market leader in the design and manufacture of air conditioning pumps, to international investment manager 3i Group plc. Aspen designs, manufactures and distributes specialised mini pumps that remove condensate water from air conditioning and refrigeration systems. Based in Hailsham, Sussex, and established in 1992, Aspen has a strong international presence, with its products available in more than 100 countries.

Jones Day advised Volkswagen Financial Services ("VFS") and two joint lead managers (Citigroup Global Markets Limited and Lloyds Bank plc) in connection with VFS's 13th automobile asset backed securities transaction, "Driver 13," with a deal volume of €750 million (US$850 million). The transaction was launched on Volkswagen's well-established DRIVER platform. VFS, a business division of the Volkswagen AG group of companies with 10,945 employees worldwide, is one of the largest repeating issuers in the German, European and global securitisation markets.

Jones Day is advising NII Holdings in connection with the sale of its Mexican operations operated by its indirect subsidiary, Nextel de Mexico, S.A. de C.V., to AT&T for US$1.875 billion, less the outstanding net debt of the business at closing. The transaction is being conducted as a sale under section 363(b) of the US Bankruptcy Code.

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
 
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