Reorg on the Record: New Restructuring Tools in Europe…| 11/10/21

Written by Shan Qureshi, Senior Legal Analyst || A rebalance of stakeholder power in the traditionally debtor-friendly restructuring regime of France took hold in October with the introduction of a new pre-insolvency measure, sauvegarde accélérée. France follows the Netherlands and Germany, which have both introduced their own new creditor-friendly restructuring tools – the WHOA and STarug, respectively – in compliance with the EU directive on preventive restructuring frameworks.

The three new processes join the English law Part 26A Restructuring Plan, with all containing a cross-class cramdown power, albeit with varying degrees of court involvement and disclosure as discussed on our recent webinar on the French tool. The variances between the tools give restructuring debtors more choice, subject to jurisdictional hurdles, but our view is that international comity will also need to be developed to support the tools if used in cross-border scenarios.

In Comexposium, for example, bank lenders were successful in obtaining an English court declaration that a company in French sauvegarde insolvency proceedings nonetheless needed to comply with information reporting obligations under an English law senior facilities agreement. So far, the English court declaration does not appear to have been enforced by the French court.

Ten months after Aggredium joined the Reorg product family, we are providing subscribers with timely fundamental data through yet-another busy earnings season in the leveraged finance market, while deal activity across new issuers continues to drive additions to our European high-yield coverage universe.