Recent Developments

Global—In In re Berau Capital Resources Pte Ltd, 540 B.R. 80 (Bankr. S.D.N.Y. 2015), the US Bankruptcy Court for the Southern District of New York recently held that a company without a place of business in the US was eligible to file a chapter 15 case by virtue of it being an obligor on US dollar-denominated debt issued under an indenture governed by New York law with a New York choice of forum clause. After the groundbreaking 2013 decision of the US Court of Appeals for the Second Circuit in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013), the courts were provided with little guidance as to what qualifies as US property for the purposes of eligibility and venue under chapter 15 of the US Bankruptcy Code. In Berau, the court ruled that a debtor that had been granted a Singapore debt moratorium was eligible to file a chapter 15 case in New York, even though the debtor did not have a place of business in the US because, among other things, the debtor had deposited a retainer with its New York City attorneys and had $450 million in US dollar-denominated debt issued under an indenture governed by New York law with a New York choice of forum clause. A more detailed discussion of the ruling is available here.

Italy—On 26 January 2016, the Italian government and the European Commission agreed on the terms under which guarantees may be provided by the Italian government for nonperforming loan ("NPL") transactions. The Italian market for NPL transactions has boomed in 2016, and NPL portfolios owned by Italian banks are estimated to have a face value of roughly €200 billion (US$218 billion). Under the new proposal, instead of establishing "bad banks" to hold NPLs, it is anticipated that NPL portfolios will be transferred to securitisation vehicles incorporated under Italian Law No. 130 of 1999; these vehicles will issue asset-backed securities collateralised by the underlying portfolios. A more detailed discussion of the proposal can be accessed here.

On 8 March 2016, after a public consultation process, the Bank of Italy published measures to implement the supervisory regulations governing loans made by securitisation vehicles incorporated under Italian securitisation law (Law No. 130 of 30 April 1999). The new regulations—introduced in Law 130 in 2014—allowed securitisation vehicles to grant loans to entities other than individuals and microenterprises without the necessity of any further license, subject to implementing regulations, which have now been issued by the Bank of Italy. A more detailed description of the implementing measures is available here.

On 30 March 2016, Italian Tax Authorities ("ITA") issued Circular n. 6/E (the "Circular") to clarify certain tax aspects of leveraged buyout ("LBO") and merger leveraged buyout ("MLBO") transactions. The Circular also provides important guidance on the tax treatment at source of outbound payments of interest and dividends by the Italian target. The Circular contains comments and guidance of a general nature. Consequently, each LBO and MLBO transaction should be assessed and evaluated on a case-by-case basis in light of the individual factual circumstances. A more detailed discussion of the Circular is available here.

France—On 10 March 2016, the French government launched the privatisation process for the airports of Nice Côte d'Azur and Lyon Saint-Exupéry. France is entitled to sell the 60 percent share that it owns in these airports by virtue of article 191 of Law #2015-990 dated 6 August 2015. The other shareholders are the local Chamber of Commerce and Industry (25 percent) and local authorities (15 percent). Interested bidders had to come forward before 24 March 2016, and the selected candidates must present their initial offers before 28 April 2016 (Nice) or 12 May 2016 (Lyon). The government will then consult regional authorities, after which the selected candidates must submit their best and final offers before 20 June 2016 (Nice) or 7 July 2016 (Lyon). Additional information concerning the bidding process is available here.