Recent Developments
France—The rules applicable to French branches of banks based outside the European Economic Area ("EEA") were revised by Order no. 2015-558 dated 21 May 2015 (the "Order").
Principally, the Order clarifies preexisting rules but also
introduces additional requirements in accordance with Article 47(1)
of Directive 2013/36/EU of 26 June 2013 (CRD IV), whereby Member
States are prohibited from applying more favorable standards to
branches of non-EEA banks than the standards applied to banks that
have a head office located in the EEA. The new rules relate to bank
capital requirements, governance and compensation. They apply both
prospectively and retroactively. Existing bank branches have until
November 2016 to comply. A more detailed discussion of the new
rules is available
here.
On 6 August 2015, France adopted legislation designed to
promote economic growth, activity and equal opportunity named after
the French Minister of Economy, Mr. Emmanuel Macron (the
"Macron Law"). The Macron Law has implications
for various areas of the French economy. Among other things, the
new legislation completes reforms to French insolvency law first
undertaken in 2014. With the implementation of these reforms, which
include the creation of specialised insolvency courts for large
insolvency cases and the introduction of rules that permit
"cramdown" of shareholder interests in reorganisation
proceedings, the new French regime creates a level playing field on
which creditors will play an increasingly greater role. A more
detailed discussion of the insolvency law reforms in the Macron Law
can be found
here.
Italy—Concluding a process started during the summer
of 2014, the Italian legislature recently finalised a set of
measures governing direct lending into Italy by nonbanking
institutions. Qualified lenders may now lend into Italy
based on the new measures introduced by Law Decree No. 91 of 24
June 2014 (the "Law Decree"), as converted into law by
the Italian Parliament on 7 August 2014. Under the Law Decree,
Italian insurance companies, Italian and EU alternative investment
funds and Italian securitisation vehicles may now lend into Italy.
Italian (closed ended) alternative investment funds falling within
the scope of the European Directive 2011/61/EU on alternative
investment fund managers ("AIFMD"). may now carry out
direct lending to Italian borrowers other than consumers and
microenterprises without any limit on the financing's scope.
Non-Italian EU alternative investment funds falling within the
scope of AIFMD may carry out direct lending to Italian borrowers
other than consumers and microenterprises on a "freedom to
provide services" basis or through the establishment of an
Italian branch, provided that they are permitted to extend direct
financing under the laws and regulations of their home country as
well as Italy. A more detailed discussion of the measures
introduced pursuant to the Law Decree and the AIFMD is available
here.
On 5 August 2015, the Italian Law Decree No. 83 of 27 June
2015 (the "Decree") became law as part of the reform
process for pre-insolvency proceedings under Italian Bankruptcy
Law (Royal Decree No. 267 of 16 March 1942). The purpose
of the reform is to provide distressed Italian entities with a more
modern and flexible insolvency law system based on private rather
than judicial initiative. The Decree introduces measures designed
to, among other things: (i) give distressed Italian entities
greater access to rescue financing; (ii) promote the active
participation of creditors in pre-insolvency proceedings (e.g., by
giving creditors the ability to propose alternative restructuring
plans under certain circumstances); (iii) empower Italian courts to
approve asset sales as part of a restructuring plan by means of
competitive bidding; and (iv) introduce certain special rules
applicable to debt restructuring agreements entered into by
distressed entities with obligations principally to banks and/or
financial intermediaries. A more detailed discussion of the Decree
can be accessed
here.
Canada, the US and the UK—On 25 June 2015, the US
unit of defunct Canadian telecommunications company Nortel Network
Inc. ("Nortel") and its creditors asked US Bankruptcy
Judge Kevin Gross and Justice Frank Newbould of the Ontario
Superior Court to adjust 12 May 2015 rulings that allocated US$7.3
billion in proceeds realised from Nortel's liquidation among
the company's Canadian, US and European divisions. In
their motion for reconsideration, Nortel's US arm and its
creditors argued that the allocation scheme unfairly shortchanges
Nortel's US bankruptcy estate. However, the motion did not seek
to override the pro-rata allocation scheme. On 6 July 2015, Judge
Gross dealt a stinging defeat to US interests when he denied the
reconsideration motion in large part and rejected most of the
movants' requests for clarification of the landmark joint
allocation ruling.
Canadian Justice Newbould also handed down a ruling on 6
July 2015 in which he agreed in all respects with Judge Gross'
decision largely rejecting US calls for reconsideration and
clarification. In his opinion, Justice Newbould was highly
critical of the US Nortel debtors for attempting to raise new
arguments that they declined to raise at trial for
"tactical" reasons. He also expressed skepticism
regarding suggestions by the US debtors that the UK pension claim
amount is inflated.
On 9 July 2015, the official unsecured creditors'
committee in Nortel's US bankruptcy cases filed a notice that
it intends to appeal Judge Gross' allocation decision as well
as his ruling on the motion for reconsideration to the US District
Court for the District of Delaware. Any appeal of the
Canadian ruling will be heard in a Canadian appellate court.
On 30 July 2015, Judge Gross denied the request of
Nortel's Canadian units and their court-appointed monitor to
certify an appeal of his allocation ruling directly to the US Court
of Appeals for the Third Circuit, thereby skipping any
intermediate appellate review by a federal district court. In his
order denying the motion, Judge Gross stated, among other things,
that immediate appeal to the Third Circuit would not materially
advance the case.
On 27 August 2015, Judge Richard Snowden of the UK High
Court of Justice, Chancery Division, explained his reasoning for
allowing 19 worldwide affiliates of Nortel, including Nortel
Networks UK Ltd., to begin evaluating and quantifying their claims
to US$7.3 billion in proceeds of the bankrupt telecom's
assets. The judge did so with the knowledge that prior
rulings by US Bankruptcy Judge Gross and Ontario, Canada, Justice
Newbould regarding allocation of the proceeds could be altered on
appeal. Judge Snowden will oversee a claims resolution process for
Nortel Networks U.K. Ltd., Nortel Networks Hispania SA, Nortel
Networks (Austria) GmbH, Nortel Networks SRO, Nortel Networks S.A.,
Nortel Networks Engineering Services KFT, Nortel Networks (Ireland)
Ltd., Nortel GmbH, Nortel Networks France SAS, Nortel Networks Oy,
Nortel Networks Romania SRL, Nortel Networks Portugal SA, Nortel
Networks AB, Nortel Networks International Finance and Holding BV,
Nortel Networks NV, Nortel Networks Slovensko, Nortel Networks
S.P.A., Nortel Networks BV and Nortel Networks Polska SP.Z.O.O.
Noteworthy
Jones Day advised France-based NextiraOne France S.A.S.
("NextiraOne"), a leading expert in communication
services with approximately 1,400 employees, in connection with the
approval on 22 June 2015 by the commercial court of Paris of global
industrial investor Butler Industries's purchase offer for the
business and assets of NextiraOne in reorganisation
proceedings. Court approval came just three weeks after
the commencement of reorganisation proceedings by NextiraOne and
represents the first implementation of the new 2014 regime for
prepackaged insolvency sales for a large business in France. The
French "pre-pack cession" enables a financially
distressed insolvent debtor to negotiate a sale of its business and
assets in an "amicable procedure" convened in advance of
entering into a formal insolvency proceeding. The sale can then be
quickly implemented once the insolvency proceeding is under
way.
Jones Day advised an international syndicate of banks and
hedge providers led by Banco Bilbao Vizcaya Argentaria, S.A., in
connection with a €445 million debt restructuring for two
thermosolar plants with a total generating capacity of 49,9
megawatts located in Alcazar de San Juan, Spain. The
thermosolar plants belong to Elecnor SA, a Spain-based company
engaged in the promotion, development and administration of
projects in the energy, telecommunications, transport and
environmental sectors.
Jones Day represented Netherlands-based Ecore B.V. and its
subsidiaries in connection with a €160 million (US$178.6)
borrowing base facility transaction. The facility may be increased
up to €200 million (US$223). The facility was
subscribed by a pool of French, German, Belgian and Dutch banks,
with Natixis and Deutsche Bank AG (London branch) acting as
mandated lead arrangers and bookrunners and Natixis acting as
facility and security agent. The related security package covers
the group companies' movable assets in France, Belgium and the
Grand Duchy of Luxembourg. Ecore is a leading player in the
recycling industrial waste industry in France and across Europe and
Asia. It has a network of more than 70 sites in Europe (France,
Switzerland, Hungary, Romania and Germany), China and India.
Jones Day represented France-based Credit Agricole CIB, BNP
Paribas and Commerzbank in connection with the issuance of
€265 million (US$297.6 million) of senior unsecured net share
settled undated bonds convertible into new shares and/or
exchangeable for existing shares by Neopost. Neopost is a
large supplier of mail solutions and a major player in the field of
digital communication and shipping solutions.
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.