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Schemes of Arrangement in Corporate Restructuring
Schemes of Arrangement in Corporate Restructuring
Practice Area:  Commercial Law
ISBN:  9780414026766
Published by:  Sweet & Maxwell
Publication Date:  05 Dec 2013
Format:  Hardback
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Schemes of Arrangement in Corporate Restructuring : Law and Practice:

•  Provides a thorough introduction to the history and use of Schemes in the context of delivering debt restructures. Continues with an analysis of  modern-day use discussing cross-border and jurisdictional issues
• Examines the origin, purpose and advantages of the scheme by reference to highly practical material precedents and case studies (from inception to completion)
• Explains the different type of scheme available including ‘pre-pack’ schemes, assessing their comparative advantages/disadvantages/key features and material descriptions with key case studies
• Explores the fundamental legal principles including issues of ‘timing’ and ‘compromise’ by reference to a number of case studies
• Addresses the notion of creditors in the context of schemes
• Provides a ‘three-stage’ guide to Scheme from first court-hearing through to the ‘sanction hearing’ with an in-depth, practical emphasis on a number of UK, US and European case studies compiled form first-hand experience
• Explores recognition issues in the context of multi-national schemes by reference to UK legislation, European Treaty Law and various International Trade Laws/regimes and how to get the scheme recognised
• Looks at the involvement of COMI in the recognition process
• Examines bondholder issues with a number of helpful precedents.
• Looks at various pervasive issues with Schemes including competition, pensions, regulation, accounting, confidentiality and voidabiliy.
• Provides a comparative analysis with other procedures including CVAs and Administrations.

CONTENTS

Introduction
- Importance
- Use (jurisdictional discussion)

History & Development
- History
- Purpose
- Advantages to using schemes
- Different types of schemes (descriptions/key features/advantages/disadvantages)

Fundamental principles / key considerations and process
- Companies Act 2006 requirements
- Timing
- Compromise or ‘arrangement’
- Creditor’s role
- Secured creditors
- No moratorium whilst the proposal is being put forward
- Key Stages
- First court hearing
- Scheme creditor’s meeting
- Sanction / fairness hearing
- Orders that court can make under s.900
- Court order / lodging with the registrar
- Supervisor
- Costs

Recognition issues
- Importance
- Fall outside the EC Regulations and rationale
- Interaction between the Insolvency Regulation and the Judgments Regulation
- Non-EC jurisdictions
- EC jurisdictions
- COMI will assist recognition
- Overseas processes

Third party releases
- Importance in complex, cross-border situations
- Contracts
- Compromise/release of rights against third parties through the scheme / Deeds of Release

Bondholder issues
- Description / diagram of how notes are usually held
- Roles of trustee, depositary, clearing system etc
- Numerosity issues, including contingent creditor analysis (vs definitisation): Marconi, Telewest, Schefenecker, Wind Hellas

U.S issues
- Recognition
- US Securities Act
- Third party releases

Insurance Schemes

Pervasive issues
- Director’s duties
- Tax
- Contractual counter-parties outside the scheme
- Competition
- Regulatory
- Accounting
- Confidentiality and commercially sensitive terms
- Voidability of new security

Comparison with other procedures
- Administration
- CVAs

Documentation (Precedent Material)
- Pre-scheme
• Standstill agreement
• Lock up / voting agreement
• Confidentiality agreement
• Term sheet
• Commitment Letter
- Practice statement letter
- Prior to directions hearing
• Finalise explanatory statement, scheme of arrangement and all appendices
- Directions hearing
• Appropriate board meetings / resolutions
• Subject to Practice Direction 49B.
• CPR Part 8 Claim Form
o Details of what covered, requirements etc.
o Set out (or appendicise) the form.
o Directions sought – provide full details of what can be sought etc.
• Cross-refer to Practice Statement [2002]
• Explanatory statement and all appendices
• Supporting evidence (witness statements etc), particularly in relation to class composition (cf Practice Statement)
• Advertisements (include details (and possibly examples))
• Skeleton argument (prepared by Counsel)
• Court Order
• Proxies (description about how used, can be complex (particularly if bonds are traded through clearing systems and reps need to be made, bonds blocked etc))
• If an overseas company, opinion of relevant expert Re: the effectiveness of the scheme overseas
- Creditor’s meeting
• Agenda
• Registration sheet
• Chairman’s script
• Voting tabulation
- Sanction hearing
• Application for sanction is made by an amended Part 8 Claim Form (New Practice Direction to CPR 49).  Provide details.
• Second Witness Statement of Director of Company
• Company’s skeleton argument (prepared by counsel)
• Report of Chairman
• Sanction Order
- Lodging the court sanction with Companies House

Case studies
- Landmark schemes:
• Marconi
• Telewest
• My Travel
• British Energy
• Queens Moat Houses
• Drax
• Crest Nicholson
• McCarthy & Stone
• Countrywide
• IMO Car Wash
• La Seda
• Gallery Media
• Wind Hellas
• European Directories
• Tele Columbus / Orion Cable
• Rodenstock
• Cattles plc

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