Recent Developments
Italy—A recent decree by the Italian Council of
Ministers would—if enacted in its current form by the Italian
Parliament—establish provisions governing non-possessory
pledges of certain assets, permit extrajudicial appropriation of
real estate assets used to secure financing and raise efficiency
levels for insolvency proceedings. During the last two
years, the Italian government has focused on reforming the Italian
lending market, with the aim of boosting access to financing for
Italian businesses and improving bankruptcy and enforcement
proceedings in Italy. As part of this reform process, the Italian
Council of Ministers enacted Decree No. 59 of 3 May 2016
("Decree"). The Decree introduces measures designed to,
among other things: (i) create a new form of security—a
"non-possessory pledge" or floating charge; (ii)
establish the "patto marciano" agreement, which
permits extrajudicial foreclosure on real property collateral; and
(iii) expedite and improve the efficiency of enforcement and
insolvency proceedings. A more detailed discussion of the Decree is
available here.
Europe—Recent months have seen a surge of new
initiatives by European antitrust enforcers applying competition
law rules to holders and processors of "big
data." Big data often is described as the
accumulation of a significant volume of different types of data,
produced at high speed from multiple sources, whose handling and
analysis might require new and more powerful processors and
algorithms. Although public attention has so far mostly focused on
search engines and social networks, many other industries, such as
online advertising, energy, telecommunications, insurance, banking
or transport process big data and are thus potentially affected. A
more detailed discussion of these developments is available here.
The UK, the US and Canada—On 3 May 2016, the Ontario
Court of Appeal issued a ruling denying a request by various
parties in the cross-border bankruptcy cases of defunct
telecommunications giant Nortel Networks Inc. and its affiliates
("Nortel") to appeal Justice Frank Newbould's 12 May
2015 decision applying a pro-rata allocation to the more than US$7
billion in lockbox funds escrowed after Nortel's
"Rockstar" sale in 2010. The motion for leave to
appeal was spearheaded by the debtors in Nortel's US chapter 11
cases, which are pending in the US Bankruptcy Court for the
District of Delaware. In its opinion, the Ontario Court
acknowledged the "unique and exceptional" nature of the
case but concluded that "granting leave [to appeal] would not
provide an opportunity for this court to provide guidance on legal
issues of significance to the practice". The court
"accept[ed] that the allocation of the Lockbox Funds is a
significant issue in this [Canadian bankruptcy] proceeding"
but concluded that "standing alone, this factor is
insufficient to warrant granting leave to appeal". As to
whether an appeal would lead to significant progress in the
litigation, the court noted that various courts have implored the
parties to settle their differences, and a "further appeal
proceeding in Canada would achieve nothing but more delay, greater
expense, and an erosion of creditor recoveries". The bulk of
the ruling addresses whether the appeal is meritorious or
frivolous. Ultimately, the Ontario court rejected each of the three
arguments made by the prospective appellants: "substantive
consolidation, the interpretation of the [transfer pricing
agreement among various Nortel entities] and questions of
fairness".
On 17 May 2016, the US District Court for the District of Delaware
certified a direct appeal of the US Bankruptcy Court's 12 May
2015 allocation decision to the US Court of Appeals for the Third
Circuit. See Nortel Networks Inc. v. Ernst & Young Inc. (In
re Nortel Networks Inc.), 2016 BL 156543, 5 (D. Del. May 17,
2016). In its ruling, the district court, among other
things, expressed concern regarding the pensioners affected by the
delays, stating that "the Court cannot escape the conclusion
that these matters of public importance may be materially advanced
by certification of direct appeal". The Third Circuit may or
may not agree to hear the direct appeal.
Global—On 19 April 2016, after a 15-year absence, the
Republic of Argentina returned to the global debt markets, when it
sold US$16 billion in bonds to fund a series of landmark
settlements reached earlier this year with holdout bondholders from
the South American nation's 2005 and 2010 debt restructurings.
This latest development in the more than decade-long battle between
Argentina and the holdouts—led by hedge funds Aurelius
Capital Master Ltd. and NML Capital Ltd.—may provide an
unlikely, albeit welcome, denouement to a story that has long
captivated the international community. A more detailed description
of Argentina's sovereign debt saga, which involved three
sovereign debt defaults over a span of 15 years, is available here.
Newsworthy
Jones Day advised Calgon Carbon Corporation in connection
with the submission of a binding offer to acquire the wood-based
activated carbon, reactivation and mineral-based filtration media
business from Arkema, a French leading specialty chemicals
and advanced materials company. Calgon is a global leader in
innovative solutions, high-quality products and reliable services
designed to protect human health and the environment from harmful
contaminants in water and air. The transaction is valued at
€145.5 million (US$160.1 million) on a cash-free, debt-free
basis.
Jones Day advised RPC Group PLC, a leading plastic products
design and engineering company for packaging and nonpackaging
markets, in connection with its €650 million (US$715.8
million) acquisition of GCS Group. GCS Group is a leading
global manufacturer and provider of closures and dispensing
systems.
Jones Day is representing DV4 Limited, which is advised by
Delancey Real Estate Asset Management Limited, in connection with
the formation of a £1.4 billion (US$2 billion) joint venture
with APG Asset Management NV and Qatari Diar Real Estate Investment
Co. to create a home rental business in London, with
properties in the former Olympic athletes' village and the
Elephant & Castle district. The venture will manage 4,000
homes, of which 1,500 are already built and 1,000 are
underconstruction. The properties will be operated under the Get
Living London brand.
Jones Day advised a syndicate of lenders formed by Banco
Bilbao Vizcaya Argentaria, Banco Santander, Caixabank, Bankia,
Banco Sabadell, and the Instituto de Crédito Oficial in
connection with the €239 million (US$263.3 million)
refinancing of a Spanish thermosolar plant with a total
generating capacity of 49.9 MW. The refinancing transaction was
promoted by Elecnor, S.A., a Spain-based company engaged in the
promotion, development and administration of projects within the
energy, telecommunications, transport and environmental
sectors.
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