Corporate Restructuring Summit Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody.
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Transcript of Corporate Restructuring Summit Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody.
Corporate Restructuring Summit
Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody
Insolvency Statistics
Headline Cases
Current Trends
Legal Update
Asset Disposal & Debt Restructuring Strategies
Nama Update
Predictions for 2012
Introduction
Predicted 2011 total: 1,500 +
*statistics do not include personal asset receivership
source-www.insolvencyjournal.ie
www.InsolvencyJournal.ie Statistics
Corporate Receiverships
Jan to Sept 2011 2010 2009
16
37
Examinerships Liquidations
1004
1284
Receiverships: Superquinn; Elliotts; SM Morris; The Heritage; Celtic Bookmakers
Statutory Receiverships: Grehan; Daly; Dunne; McNamara
Share Receivership: Quinn Group
Examinerships: McInerney Group; Xtra-Vision
Liquidations: Bowen Construction;Total Fitness
Headline Cases
Lack of liquidity still critical
Level of enforcement: static
Restructuring
Banks showing patience with trading companies
Auctioneering firms enter market; Allsop auctions
Other than Google deal, commercial property slow
Current Trends
Senior lender opposition is very challenging
Secured creditors can be crammed down
Forcing secured creditors to stay in – less feasible
"Exceptional Circumstances" comment by Justice Clarke
Valuation: Examiner’s scheme -v- liquidation/receivership
Expect cross-examination of valuers/experts
Pre-process negotiations may influence a judge
Lessons from McInerney
Shadow Director issues
Current law
Buzzle -v- Apple, NSW Supreme Court decision (2010)
If the actions of lender (i.e. extension of credit with conditions attached) are…
» part of commercial negotiations & relying on contractual rights
» at arm’s length
» looking after lender’s own interests and
» allow board to exercise some discretion then…
…risk can be mitigated
Other Legal Developments
Belgard Motors
Start Mortgages and Kavanagh v Lynch
Michael McLoughlin (Pharmacy) Limited
Bankruptcy Reform
Multi-Unit Developments Act, 2011
Commercial
Asset Disposal Strategy
Receivership AssetDisposal Strategy
AppropriateAsset
Manager
Trade/Rent+
Hold MT
Trading
Residential
Hotel & Leisure
Industrial
Sell Now
Package & Sell
The Push to Restructure
1. Agree a sustainable Senior debt
Earning / performing loan
2. Agree a structure for residual debt
Leverage recourse to promoter and their assets
Incentivise borrower to repay residual debt
Anti-embarrassment/Confidentiality provisions
NAMA update
New Insolvency Team to monitor Receiverships
Challenges by borrowers but also…
…NAMA working with borrowers
Capability, co-operation & full disclosure
NAMA seeking undertakings "not to move COMI"
Predictions for next 12 months
Distressed residential property auctions to continue
NAMA to try and kick-start commercial property market
Pre-packs in the retail sector to increase
A few large, over-leveraged corporates to be restructured
Consensual work-outs progressed by banks
Foreign investment into distressed situations to increase
Corporate Restructuring Summit
Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody