There has been great discussion over the course of INSOL on the various restructuring and insolvency reforms being considered or implemented globally. In the break out session ‘The good, the bad and the ugly: national and regional law reforms’, panellists drilled down into the detail of some of these reforms. The panel considered reforms in the EU (Prof. Christoph Paulus, Hamboldt-Universitat zu Berlin), the UK (Mark Craggs, Norton Rose Fulbright LLP), Singapore (Sushil Nair, Drew & Napier LLC), and the US (Donald S. Bernstein, Davis Polk & Wardwell LLP), as well as UNICTRAL’s work on harmonising and developing insolvency law globally (Jenny Clift, UNCITRAL Secretariat).
- The European Union. The panel discussed the recast EC Regulation on Insolvency which will come into force on 26 June 2017. The recast law is intended to improve harmonisation between different jurisdictions, and includes a number of innovations. These include introduction of “synthetic” secondary proceedings (which allows a liquidator in main proceedings to avoid secondary proceedings being opened in another jurisdiction, provided the liquidator undertakes to recognise priority rights of creditors in that other jurisdiction and a qualified majority of creditors in that second jurisdiction have approved the undertakings), and provisions to facilitate group insolvencies. The panel also discussed the European Commissions’ proposal to introduce an EU wide pre-insolvency restructuring process. This would be a debtor-in-possession process, which would in substance be roughly similar to an English Scheme of Arrangement albeit with less judicial involvement. You can read more about the proposal here: http://europa.eu/rapid/press-release_IP-16-3802_en.htm ; and here: http://ec.europa.eu/information_society/newsroom/image/document/2016-48/proposal_40046.pdf
- The United Kingdom. The panel discussed the UK Insolvency Service’s recent public consultation on potential reforms to the UK insolvency regime. Reforms being considered include moratoriums for Schemes of Arrangement and other restructuring processes, with related provisions preventing creditors refusing to provide essential services during the moratorium period, and the introduction of rescue finance (including super-priority loans and security). You can find details of the consultation here: https://www.gov.uk/government/consultations/a-review-of-the-corporate-insolvency-framework
- Singapore. The panel discussed Singapore’s Companies (Amendment) Bill 13/2017, which has recently been passed by the Singapore Parliament and is now awaiting enactment. The Bill, which when enacted will amend the Companies Act, is directed at creating a restructuring framework more suited to cross-border insolvencies and more debtor friendly overall. Key reforms include improved accessibility to Judicial Management and Schemes of Arrangement for foreign companies, automatic moratoriums for both Judicial Management and Schemes of Arrangement (with the potential for extra-territorial effect in some circumstances), creditor cram-down, pre-packs, and rescue financing. A copy of the second reading speech for the Bill is available here: https://www.mlaw.gov.sg/content/minlaw/en/news/parliamentary-speeches-and-responses/second-reading-speech-by-senior-minister-of-state–ministry-of-f.html
- The United States. The panel discussed the American Bankruptcy Institute’s Report on reform of Chapter 11 of the US Bankruptcy Code. The panel discussed how, at present, there did not appear to be any move to implement the recommendations contained in the report by US legislatures, however the report was increasingly having an impact on how US Judges developed bankruptcy law through case law. You can find the ABI’s report here: http://commission.abi.org/full-report
- UNCITRAL. Lastly, the panel looked briefly at some of the work UNICTRAL has been doing over the past few years to harmonise and develop insolvency law globally. Key proposed reforms (which are still in development) include developing a new model law for the enforcement of insolvency related judgments, and for dealing with corporate groups in an insolvency context.