Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

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Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

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Compositions and Arrangements are vital corporate restructuring tools for global and local companies. Their key advantage is that they give companies flexibility and control in reorganizing their business operations and debt. Our lawyers are expert practitioners with global experience in using these methods to successfully implement restructuring projects. The depth of our industry knowledge and experience in this area allows us to provide you with a professional team of lawyers, ensuring you have flexibility, control and legal certainty.

Creditor compositions are an out-of-court agreement with a creditor to pay obligations at a discount or over time. A Scheme of Arrangement, a statutory procedure in the UK, involves a company’s compromise of claims and rights of different classes of its members and creditors. As long as the necessary approvals are obtained, members and creditors can agree to substantial variations of their rights and minority dissenting parties’ impact can be diminished. Schemes of Arrangement and creditor compositions have been used by our global Restructuring, Insolvency and Bankruptcy team successfully in achieving:

Group reorganizations to include change of center of main interests
Demergers and acquisitions
Solvent and insolvent company restructuring
Return of capital to shareholders

Another feature of Dentons’ restructuring and insolvency work involves our expertise with Company Voluntary Arrangements. Similar to a Scheme of Arrangement, our lawyers use this agreement in restructuring projects to focus on the compromise of unsecured creditors’ claims, thereby avoiding the appointment of an administrator or liquidator.

Our global Restructuring, Insolvency and Bankruptcy team will guide you at every step from the planning and strategy stage to full implementation, providing you with continuous, practical and technical advice to ensure the successful conclusion of any plan of reorganization.

Experience

Administrators of Allied Carpets Properties Limited and Allied Carpets Retail Limited: Serving in conjunction with their secured lenders.
Assignments for benefit of creditors: Representing assignees for the benefit of creditors for a hospital in liquidation, a transmission repair business and a receivables factoring business. Also representation of purchasers of assets from assignees for the benefit of creditors including intangibles, brand names and tangible assets.
Composition during GAP period: Representing a manufacturing business in composition to pay trade creditors at a discount over time. An involuntary bankruptcy case was filed against the business, but then the answer date and GAP period were extended to allow the trade composition to be implemented.
Federal Mogul (UK and US): Acting on one of the longest and most complex US and UK restructurings in history, advising the UK administrators on every aspect of the administrations. This included significant litigation relating to the insurance and reinsurance arrangements in respect of asbestos liabilities, the coordination and integration of the UK proceedings with the US Chapter 11 process, negotiating with the numerous US and UK stakeholders to find a consensual solution and implementing an exit of the UK proceedings by company voluntary arrangements and schemes of arrangement which included the creation of the first UK trusts for present and future asbestos claimants.
Gordon Pacific Carriers Inc.: Representing a vessel charter in contract negotiations and Chapter 11 claim resolution as unsecured creditor.
Lower-ranking loan creditor: Advising in the insolvency of Arcandor/Highstreet.
MF Global (UK) Ltd special administrator: Acting for former trading clients of MF Global in recovery of monies following the company’s entry into special administration.
Polbita: Providing the owner of Polbita, one of Poland’s largest drugstore chains, with comprehensive restructuring advice, including on existing €50 million credit facilities, bridge financing of €12 million, standstill and workout with more than 100 suppliers, and preparation of bankruptcy filings envisaging the procedure for an accelerated voting on composition (during the so-called preliminary meeting of creditors). As a result of a successful out-of-court restructuring and bridge financing, the client regained liquidity and withdrew bankruptcy filings.
Preferential creditor of real estate financing: Advising on its dispute with the lower-ranking creditors in connection with the restructuring of the loan debts.
PT Berlian Laju Tankers group (Singapore): Advising a Singapore-registered Business Trust in the insolvency and scheme of arrangement in Singapore and US Chapter 15 bankruptcy protection measures taken by companies in the PT Berlian Laju Tankers group. This is one of the highest profile, widely reported insolvency cases in the maritime world. The PT Berlian Laju group defaulted on a US$685 million loan agreement.
Restructuring firm: Advising on the purchase of Habitat, the restructuring of its debt and corporate structure.
Senior lender: Advising on the restructuring of the loan debts of a German-French buy-out.
Trade creditor composition: Representing business in wind down with long-term assets of value in composition to pay trade creditors over time. Included a trade lien granted to an agent for all trade creditors.
TT International Ltd: Advising various bank lenders in the consensual restructuring through a scheme of arrangement of TT International Ltd ("TT"), a listed company in the consumer electronics industry with total liabilities of over $500 million. TT has close to 80 subsidiaries in various jurisdictions around the world, which gave rise to challenging cross-jurisdictional legal and practical issues in the restructuring; also TT's creditors (including over 20 bank lenders) had widely divergent interests.
UK Retail Bank: Advising on the borrower’s CVA and the granting of security to its Pension Fund as well as negotiating the priorities so ensuring the approval of the CVA and survival of the borrower.

Insights

The Metaverse: Personal property security in digital assets

March 25, 2022

The Metaverse is a far reaching concept being discussed in many different spheres of business. However, much confusion still exists in the lending, borrowing and insolvency spaces as to “what is the Metaverse?” and what are its implications?

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Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

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Dentons launches combination with PJS Law in the Philippines

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Dentons launches combination with Zaanouni in Tunisia

Dentons solutions: global tools and trackers

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Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

Creditor Composition and Assignment Agreements, Schemes of Arrangement and Voluntary Arrangements

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The Metaverse: Personal property security in digital assets

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