Corporate Restructuring Summit
David Baxter
A&L Goodbody
25 September 2013
Recent legal developments in Restructuring
 Current landscape
 New & forthcoming legislation
 Pensions & insolvency
 Deleveraging update
Current Landscape
 Retail examinerships still in vogue
 NAMA’s first Irish portfolio loan sale (including a JV arrangement)
 Large corporate restructurings - out of court & consensual
 New debt holders working through loan books; inter-creditor tensions
remain within syndicates
 Steps taken to improve liquidity in property market e.g. R.E.I.T.s
legislation
 Impact of IBRC liquidation
New & forthcoming legislation
 IBRC Act, 2013
 Companies Bill, 2012
 Amendments to EU Insolvency Regulation
 Personal Insolvency Act, 2012
 Land and Conveyancing Law Reform Act, 2013
Land and Conveyancing Law Reform
Act, 2013
 The legislation addresses a specific loophole arising from ….
 …. Start Mortgages Limited v Gunn decision
 2009 Act unintentionally removed right of a lender to seek repossession of
registered property where mortgage created pre 1 December 2009
 Act does not have retrospective application; key date: 24 July 2013
 Possibility of adjournments when principal private residence at play
Companies Bill, 2012
 Codification of directors’ duties
 Receivership
»
More extensive powers; although short of NAMA receivers’ powers
 Examinership
»
SME examinerships at Circuit Court
 Liquidation
»
Reducing court’s supervisory role
»
Threshold to petition to wind up is now €10,000
Amendment of EU Insolvency Regulation
 Review after a decade timely
 EC publishes reform proposals in December 2012
 Key proposed changes:
» More clarity around COMI – impact on forum-shopping?
» Scope of Regulation extended – inclusion of UK schemes?
Pensions & Insolvency
 Key English Supreme Court decision (Nortel/Lehman) on 24 July 2013
 Broad powers of UK Pensions Regulator; ranking of contribution notices
 Relevance in Ireland
»
Irish subsidiary part of group that sponsors a UK DB scheme
»
IrishCo a target for UK Pensions Regulator
»
Secured and preferential creditors now not at risk
 Challenges for DB pension trustees in Ireland
Deleveraging
Bank deleveraging from Dec-10 to Dec-12
70.0
70
60
Close to former
indicative 3yr
PLAR target
€70bn
€ Billions
50
40
30
57.0
20
10
39.0
17.9
35.6
21.4
+
=
=
+
0
Core
Non-Core
Total
Disposals
Net Amort &
other
Source: Department of Finance and NTMA
•
•
•
•
Cumulative deleveraging at AIB, BOI & PTSB to end-Dec 2012 of €57bn (81% of 3yr target); €20.8bn achieved in
2012
AIB - disposals are ahead of plan and the programme is nearing completion. Remaining deleveraging required to reach
their target is to be achieved through loan work-out and amortisation.
BOI - has completed it’s disposal plan and the remaining deleveraging is on target and forecast to be achieved through
rundown of non-core loan books.
PTSB - deleveraging programme postponed pending consideration of EC Restructuring Plan.
Loan Portfolio Sales - 2013
 Why not more portfolio loan sales in 2013?
 Impact of IBRC loan sales
 Some unhelpful domestic case law
 Preference to sell single assets
 For some banks, deleveraging targets have been met
 Reaction to pricing on 2012 loan portfolio sales
 Banks not in a position to to crystallise losses
 Stress-testing banks’ balance sheets in H1 2014