The benefit of the pre-pack route is that the timeframe for following these procedures can be reduced substantially with a view to preserving the value of a company’s goodwill and other assets. As the CA 2014 does not prescribe the content of a Scheme, the process offers real flexibility in its application and it can be utilised to affect a broad range of restructuring solutions. The streamlining of the Schemes of Arrangement (Schemes) process under the Companies Act 2014 (CA 2014) provides an option for corporate restructuring and recovery, which may not have been feasible for some companies or corporate groups in the past. CORPORATE RESCUE AND DEBT RESTRUCTURING EXERCISE: SCHEME OF ARRANGEMENT PURSUANT TO SECTION 366 COMPANIES ACT 2016 Section 366 and Section 368 of the Companies Act 2016 are statutory mechanism that provides relief for Companies to propose a compromise with its creditors and to strike a compromise in lieu of facing immediate doom of being wound up. Restructuring & insolvency analysis: According to Alex Rogan, an associate in the corporate restructuring team at Skadden, the Van Gansewinkel judgment is the latest example of a trend in recent years for schemes of arrangement to be successfully used to restructure the English law governed financial obligations of overseas companies that do not have their centre of main interest (COMI), or an … RESTRUCTURING UNDER HONG KONG CORPORATE BANKRUPTCY LAW: SCHEMES OF ARRANGEMENT. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. In the event the scheme is approved All rights reserved. Schemes of Arrangement: Restructuring in the Cayman Islands November 2020 Ben Hobden Alex Davies We appreciate that these are challenging times and that the need for cross-border advice on insolvency and restructuring matters may be required at short notice. Perhaps the most notable of these benefits relates to the tax implications. liquidation or sale value) it is established that the creditors and/or members in question will have no real economic interests in the assets. For further information please contact Jill Callanan at jcallanan@lkshields.ie, Ruairi Mulrean at rmulrean@lkshields.ie or Paul Dineen at pdineen@lkshields.ie. A compromise or arrangement between a company and its members or creditors (or any class of them) under Part 26 of the Companies Act 2006. T: +353 91 341 341, E: email@lkshields.ie either in person or by proxy, must vote in favour of the insolvencies, by avoiding the usual costs and expenses that would This could be through the implementation of various debt reduction strategies such as part of the assets or business of a company; a release or This is because a failure to provide separate meetings/votes to creditors and/or members with dissimilar rights is likely to lead to the Scheme not being sanctioned by the Court. It is not inconceivable that the Court would agree to adopt a similar approach when considering the sanction of an Irish Scheme. regime and can therefore be used by both solvent and insolvent Scheme of arrangement. It includes discussion of when a scheme of arrangement may be useful, the requirements for a scheme of arrangement and particular issues that may arise when seeking creditor, shareholder and court approval. The content of this article is intended to provide a general minority oppression). Once the scheme is approved by the There is no improper coercion of any of the creditors and/or members concerned (e.g. Digital Securities Business Is About To Bloom, © Mondaq® Ltd 1994 - 2020. We regularly publish useful content on a wide range of legal and business topics. be incurred if the liquidators carried on with the formal PGS launches scheme of arrangement to implement restructuring Grant Rowles November 27, 2020 0 0 Less than a minute Norwegian offshore survey specialist PGS has launched a … their own interests. to the use of schemes as an expedient and cost effective Scheme of Arrangement - Corporate Debt Restructuring Date &Time of Broadcast 21-Oct-2020 20:34:42 Status New Announcement Sub Title Updates on restructuring process - Scheme of Arrangement; Change of Hearing Date Announcement Reference SG201021OTHR71KH Submitted By (Co./ Ind. They will consider whether: the scheme is the Scheme is fair and reasonable). As part of our series of articles on the corporate restructuring and recovery options available to Irish companies (or groups), this article outlines the new streamlined process by which a company can seek to implement a Scheme as provided for in Chapter 1, Part 9 of the CA 2014. A scheme of arrangement is a statutory process which permits a company to enter into a compromise or arrangement with its members and/or its creditors, or any class of them, which is approved by the Court. The dominant driver of the ... holders in a restructuring and the value of the business is in any event likely to move during ... the use of schemes as a restructuring tool. Scheme of Arrangement - Corporate Debt Restructuring Date &Time of Broadcast 27-Oct-2020 20:33:54 Status New Announcement Sub Title Updates on restructuring process - Submission of Trading Resumption Proposal Announcement Reference SG201027OTHREHE5 Submitted By (Co./ Ind. The DITC Portal is now open for CRS and FATCA purposes, as anticipated in our previous advisory and the DITC's industry advisory dated 30 October 2020. scheme and sends the explanatory statement setting out the effect This note looks at the key changes and contrasts the enhanced Singapore scheme of arrangement against the English scheme of arrangement and US Chapter 11. Schemes of arrangement Innovating with the latest legal tools. The Scheme process involves three stages: To avail of the process, there is no requirement to prove insolvency or to show a ‘reasonable prospect of survival’ like in an examinership. and/or its creditors, or any class of them, which is approved by Top Questions And Answers In Applying For An SFC License, NEW UPDATES: Economic Substance Regulations In The UAE, Opening Of DITC Portal | Updates On AEOI And Economic Substance, Hong Kong Director Disqualification Orders: Managing Personal Liability In The Context Of Corporate Insolvency, Draft Law Implementing The European Electronic Communications Code In Luxembourg, Exit Strategy: Mergers And Acquisitions In The Isle Of Man Fiduciary Sector, Trusts In 2 Minutes – Protecting Protectors, Share Purchase Transactions With Barry Smith (Video). Mondaq uses cookies on this website. It is common to identify an appropriate comparator to populate each class. In DQ's experience, the Isle of Man Court has been receptive It is thus a valuable marketing tool for economies in attracting company operations to the provider country. members and creditors obtain some advantage that compensates them Schemes of Arrangement in Corporate Restructuring: Pilkington, Christian: Amazon.com.au: Books High Court (Court): the Court considers whether to exercise its discretion to approve the Scheme and thereby bind all dissenting creditors and/or members to the Scheme proposals. Lancaster University, 2019. two or more businesses carried on by a company; the transfer of any In order for a scheme of arrangement to be valid and enforceable, it must feature a ‘compromise’ or ‘arrangement’. of the proposed scheme. scheme; generally speaking it could be a compromise or arrangement T: +353 1 661 0866, E: email@lkshields.ie RESTRUCTURING UNDER HONG KONG CORPORATE BANKRUPTCY LAW: SCHEMES OF ARRANGEMENT. The enhancements to the Singapore restructuring regime are important in the context of, according to Bloomberg, the S$38 billion of Singapore bonds that corporates must repay by 2020. they can provide an opportunity to avoid entering formal among creditors and/or a return of capital to shareholders. Schemes of Arrangement in Corporate Restructuring provides in-depth guidance on the legal principles, formal procedures and practical issues which underpin the use of schemes of arrangements in complex financial restructurings. Scheme of arrangements (Scheme) under section 210 of the Companies Act (Chapter 50) of Singapore (the Companies Act) are typically undertaken to, inter alia, effect a … Schemes of Arrangement: Restructuring in the Cayman Islands November 2020 Ben Hobden Alex Davies We appreciate that these are challenging times and that the need for cross-border advice on insolvency and restructuring matters may be required at short notice. The enhancements to the Singapore restructuring regime are important in the context of, according to Bloomberg, the S$38 billion of Singapore bonds that corporates must repay by 2020. This practice note provides an overview of schemes of arrangement in the context of both solvent and insolvent companies. Please click the button below if you would like to receive these by email. A scheme can also be used to implement a pre-pack, where all the stakeholders are agreed on its terms. A particular benefit of a scheme is that once effective, the Schemes of Arrangement and Restructuring of Companies: A Viable Alternative to Other Restructuring Tools in Corporate Law. representing at least 75% in value of those present and voting, debt-for-equity swaps or rescheduling of repayments combined with asset sales to generate fresh capital. to rubber stamp a scheme. Such solutions can take the form of solvent and insolvent restructurings. Corporate Restructuring and Recovery Options: Part 4 - Schemes of Arrangement PUBLISHED: 26th November 2020 The streamlining of the Schemes of Arrangement (Schemes) process under the Companies Act 2014 (CA 2014) provides an option for corporate restructuring and recovery, which may not have been feasible for some companies or corporate groups in the past. A Scheme is a useful alternative to the compulsory takeover/‘squeeze out’ procedure in the CA 2014 as the 75% members approval threshold for a Scheme is lower than the 80% threshold required to implement a ‘squeeze out’. company has been wound up) may apply to Court. Schemes are sometimes used by public limited companies to carry share capital reductions. solvent and insolvent companies. in order for the scheme to be approved, a majority in number Print; Share. for the alteration of their rights. A Scheme of Arrangement is a process used by a company in financial difficulty to reach a binding agreement with its creditors to pay back all, or part, of its debts over an agreed timeline. compromise of secured and unsecured debts; a transfer of claims restructuring tool. It is important to emphasise that the sanctioning of a Scheme is not merely a rubber-stamping exercise by the Court once the requisite majorities have been obtained but is a genuine exercise of judicial discretion. Court, the Court order and the scheme document are filed at the Schemes of Arrangement A scheme of arrangement is a court supervised restructuring process which allows for the rights of creditors or shareholders to be varied, by cramming down on non-consenting parties in appropriate circumstances2. jurisprudence around schemes of arrangement will be drawn upon by the courts in relation to the restructuring plan. 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2020 schemes of arrangement in corporate restructuring