companies. Sufficient steps have been taken to identify and notify all interested parties. Generally, only one court hearing is required, so a Scheme could be put in place within 6-8 weeks. Schemes of Arrangement in Corporate Restructuring provides in-depth guidance on the legal principles, formal procedures and practical issues which underpin the use of schemes of arrangements in complex financial restructurings. A compromise or arrangement between a company and its members or creditors (or any class of them) under Part 26 of the Companies Act 2006. T: +353 91 341 341, E: email@lkshields.ie company to enter into a compromise or arrangement with its members Schemes are sometimes used by public limited companies to carry share capital reductions. regime and can therefore be used by both solvent and insolvent To print this article, all you need is to be registered or login on Mondaq.com. Benefits of schemes compared to other processes. It includes discussion of when a scheme of arrangement may be useful, the requirements for a scheme of arrangement and particular issues that may arise when seeking creditor, shareholder and court approval. Court for an order directing meetings of the members, or different corporate restructuring. The Companies Ordinance ("CO") enables a company incorporated in Hong Kong to enter into a scheme of arrangement with its creditors to restructure its debts and other liabilities. The 75% approval threshold is higher than that of other processes such as examinership. 50). Last, the programme, covers restructuring in a turnaround situation, as that often involves issues not relevant in happier circumstances. Schemes of Arrangement in Corporate Restructuring von Christian Pilkington (ISBN 978-0-414-05695-4) bestellen. In a number of recent cases, the Court has summarised the principles that it will take into consideration before making an order sanctioning a Scheme: Once sanctioned by the Court and a copy of the final sanction order is delivered to the Companies Registration Office (CRO) within 21 days of making such an order, the Scheme will become legally binding upon the company, the creditors and/or members who were included in and voted on the Scheme or any liquidator in case of the company being wound up. 7632 on the European Electronic Communications Code (the "Draft Law")... Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. The existence of the Schemes as a mechanism for corporate restructuring in Ireland can be traced all the way back to the Joint Stock Companies Arrangement Act of 1870. The Kenya Airways restructuring has shown that schemes of arrangement have significant potential as a method of conducting debt restructuring. and/or its creditors, or any class of them, which is approved by may properly agree on among themselves. By using our website you agree to our use of cookies as set out in our Privacy Policy. The scheme procedure is set out in the Isle of Man companies Scheme of arrangements (Scheme) under section 210 of the Companies Act (Chapter 50) of Singapore (the Companies Act) are typically undertaken to, inter alia, effect a … As the CA 2014 does not prescribe the content of a Scheme, the process offers real flexibility in its application and it can be utilised to affect a broad range of restructuring solutions. Following the introduction of the deed of company arrangement in Australian restructuring and insolvency law, schemes of arrangement became less prominent. For example, creditors are often classed in accordance with their rights in liquidation (e.g. insolvencies, by avoiding the usual costs and expenses that would insolvency. Once the scheme is approved by the scheme; generally speaking it could be a compromise or arrangement On 10 August 2020, The Cabinet of Ministers Issued Resolution No.57/2020 concerning Economic Substance Regulations (‘'Resolution 57''). For example, the Court recently refused to appoint an examiner to the Irish arm of the New Look fashion retailer as it would have been in its view “entirely premature” to do so. legislation but helpfully sits outside the Isle of Man insolvency DQ. The Isle of Man Court has confirmed that its role is not simply The statutory requirements to constitute and convene Scheme Meetings to obtain the approval of the members and/or creditors affected by the Scheme and, ultimately the Court, cannot be dispensed with. greater return for them, particularly in large and complex Please click the button below if you would like to receive these by email. Schemes of Arrangement and Restructuring of Companies: A Viable Alternative to Other Restructuring Tools in Corporate Law. The Companies Ordinance ("CO") enables a company incorporated in Hong Kong to enter into a scheme of arrangement with its creditors to restructure its debts and other liabilities. 1 constituencies. fair; the different classes were fairly represented; the statutory company must prepare an explanatory statement setting out the Schemes of Arrangement: Restructuring in the Cayman Islands November 2020 Ben Hobden Alex Davies We appreciate that these are challenging times and that the need for cross-border advice on insolvency and restructuring matters may be required at short notice. Restructuring & insolvency analysis: According to Alex Rogan, an associate in the corporate restructuring team at Skadden, the Van Gansewinkel judgment is the latest example of a trend in recent years for schemes of arrangement to be successfully used to restructure the English law governed financial obligations of overseas companies that do not have their centre of main interest (COMI), or an … Perhaps the most notable of these benefits relates to the tax implications. For further information please contact Jill Callanan at jcallanan@lkshields.ie, Ruairi Mulrean at rmulrean@lkshields.ie or Paul Dineen at pdineen@lkshields.ie. Mondaq uses cookies on this website. company itself, a creditor, a member or the liquidator (if the Directors of Hong Kong companies operate in an environment of personal liability – a liability that is brought into sharp focus where companies face financial difficulties or even insolvency. We predict that this will continue in 2016, despite European alternatives, because of the scheme’s flexibility, predictability, the speed of access to, and the commercial attitude of, English judges. By using this website you allow us to place cookies on your computer. To print this article, all you need is to be registered or login on Mondaq.com. Lancaster University, 2019. The directors (or liquidators) of the An application is then made to the This is often used by multinationals to redomicile the group for tax purposes. Schemes of Arrangement A scheme of arrangement is a court supervised restructuring process which allows for the rights of creditors or shareholders to be varied, by cramming down on non-consenting parties in appropriate circumstances2. The English scheme of arrangement is a very popular European restructuring tool. at the Court meetings, a second and final Court hearing is held at This in contrast to the diminution of assets that could occur should the Scheme process become protracted. An imperative consideration in the Scheme process is that the Scheme Meetings of creditors and/or members are correctly constituted for the purposes of voting on the Scheme proposals. members and creditors obtain some advantage that compensates them Indeed, the relatively ubiquitous use of schemes of arrangement as a corporate legal service has proven to be an attraction for corporations seeking the jurisdiction most amenable to their plans ‘forum shopping’. classes of members and/or meetings of the creditors, or different Over recent years, the English law-governed scheme of arrangement has become an increasingly popular tool to implement debt restructuring solutions. This note looks at the key changes and contrasts the enhanced Singapore scheme of arrangement against the English scheme of arrangement and US Chapter 11. Ross Parsons Centre Law & Business seminar: Schemes of arrangement and debt restructuring Schemes of arrangement and debt restructuring Tickets, Mon 28/09/2020 at 6:00 pm | Eventbrite Eventbrite, and certain approved third parties, use functional, analytical and tracking cookies (or similar technologies) to understand your event preferences and provide you with a customised experience. The statutory requirements and any directions of the Court have been complied with. Schemes of arrangement—voting and cram-down. The enhancements to the Singapore restructuring regime are important in the context of, according to Bloomberg, the S$38 billion of Singapore bonds that corporates must repay by 2020. Schemes of Arrangement A scheme of arrangement is a court supervised restructuring process which allows for the rights of creditors or shareholders to be varied, by cramming down on non-consenting parties in appropriate circumstances2. conveniently be used for many types of company reorganisations Schemes of Arrangement as Restructuring Tools. either in person or by proxy, must vote in favour of the majority acted bona fide; and whether an intelligent and honest Scheme of Arrangement - Corporate Debt Restructuring Date &Time of Broadcast 27-Oct-2020 20:33:54 Status New Announcement Sub Title Updates on restructuring process - Submission of Trading Resumption Proposal Announcement Reference SG201027OTHREHE5 Submitted By (Co./ Ind. Research output: Thesis › Doctoral Thesis. It is common to identify an appropriate comparator to populate each class. There is no formal provision for the Court to impose a Scheme on a class of creditors or members that does not vote in favour of the proposed Scheme (colloquially known as “Cramdown”).However, there is authority in English law (yet to be adopted in the Irish courts) for the proposition that, the scheme company can exclude ‘out of the money’ creditors and/or members (referred to in more detail below) from voting on the Scheme, thereby effectively cramming down those creditors / members. However, there are also provisions allowing any member, creditor or liquidator of the company to make an application to the Court for an order summoning the Scheme Meetings. Employment, Pensions and Employee Benefits. Every good business deserves a (Government) favour - the recent extensions of the Government’s Loan Guarantee Schemes Date-stamp loading Corporate Restructuring and Recovery Options: Part 4 - Schemes of Arrangement The new Companies Act has made Schemes of Arrangement significantly cheaper and more flexible, with the result that they are now a realistic option for struggling companies to consider. This is a concept borrowed from the U.S. Chapter 11 process and its absence from the be incurred if the liquidators carried on with the formal All rights reserved. A Scheme of Arrangement is a process used by a company in financial difficulty to reach a binding agreement with its creditors to pay back all, or part, of its debts over an agreed timeline. The first such Restructuring Plan in respect of the financial restructuring of Virgin Atlantic Airways (VAA) was sanctioned by the High Court on 2 … which the Court will decide whether to sanction the scheme. Isle of Man Companies Registry, together with any other relevant This could be through the implementation of various debt reduction strategies such as Schemes of Arrangement, Scheme of Arrangement, Schemes, Arrangement, Corporate Governance, Corporate Restructuring, Insolvency; View graph of relations. RESTRUCTURING UNDER HONG KONG CORPORATE BANKRUPTCY LAW: SCHEMES OF ARRANGEMENT. It is not inconceivable that the Court would agree to adopt a similar approach when considering the sanction of an Irish Scheme. Isle of Man: Flexibility In Corporate Restructuring: Schemes Of Arrangement 26 September 2016 . merger or consolidation of two or more companies; a separation of The Scheme process involves three stages: To avail of the process, there is no requirement to prove insolvency or to show a ‘reasonable prospect of survival’ like in an examinership. scheme. Pilkington, Schemes of Arrangement in Corporate Restructuring, 2013, Buch, 978-0-414-02676-6. shareholders) or creditors. The Kenya Airways restructuring has shown that schemes of arrangement … Schemes of arrangement Innovating with the latest legal tools. Scheme of Arrangement - Corporate Debt Restructuring Date &Time of Broadcast 21-Oct-2020 20:34:42 Status New Announcement Sub Title Updates on restructuring process - Scheme of Arrangement; Change of Hearing Date Announcement Reference SG201021OTHR71KH Submitted By (Co./ Ind. Construction Disputes: What Will 2021 Bring? All Rights Reserved. Print; Share. about anything that the company and its creditors or its members 284 p. After that the company notifies the PGS launches scheme of arrangement to implement restructuring Grant Rowles November 27, 2020 0 0 Less than a minute Norwegian offshore survey specialist PGS has launched a … Schemes of Arrangement in Corporate Restructuring | Christian Pilkington | ISBN: 9780414026766 | Kostenloser Versand für alle Bücher mit Versand und Verkauf duch Amazon. The directors of the company have the power to call the meetings of the creditors and/or members to vote on the proposals for a Scheme (the “Scheme Meetings”). The scheme procedure is set out in the Isle of Man companies legislation but helpfully sits outside the Isle of Man insolvency regime and can therefore be used by both solvent and insolvent companies. We regularly publish useful content on a wide range of legal and business topics. liquidation or sale value) it is established that the creditors and/or members in question will have no real economic interests in the assets. in order for the scheme to be approved, a majority in number representing at least 75% in value of those present and voting, Therefore, companies using a Scheme to carry out an insolvent restructuring can avoid the stigma and uncertainty attaching to other insolvency processes, which often must be advertised and can be damaging to the business of the company and its prospects going forward. A Scheme is a useful alternative to the compulsory takeover/‘squeeze out’ procedure in the CA 2014 as the 75% members approval threshold for a Scheme is lower than the 80% threshold required to implement a ‘squeeze out’. They do however recognise that the creditors scheme is binding on all the creditors and members of each class If you are contemplating a Scheme as a possible restructuring route, it is always best to take action at an early stage and we would be very happy to discuss the process with you. Published On - 26th September 2016. Scheme of Arrangement - Corporate Debt Restructuring Date &Time of Broadcast 16-Oct-2020 19:52:49 Status New Announcement Sub Title Updates on restructuring process - Scheme of Arrangement Announcement Reference SG201016OTHREUEL Submitted By (Co./ Ind. Do however recognise that the creditors and/or members concerned ( e.g been a Part 9 Scheme the diminution assets! 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