Key takeaways from Aggregate Holdings' restructuring with DLA Piper
Apr 3, 2024
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DLA Piper's restructuring expert, David Manson, discusses key lessons from Aggregate Holdings' restructuring plan, including court challenges, amended plans, COMI shift impact, and insights into future restructuring battles and market evolution.
Restructuring plans should address court requirements to benefit subordinated creditors, aligning with guidance.
Efficient time management and fair processes are vital in complex court proceedings for successful restructuring plans.
Deep dives
Need for Amendments Post-Adler Judgment
Following the Adler judgment, the restructuring plan sought amendments to benefit subordinated creditors who were previously set to receive nothing. The plan's alteration aimed to align with court guidance, providing funds for tier two and junior creditors if the plan succeeded. These changes addressed the court's requirement for a compromise or arrangement, ensuring subordinated creditors were considered.
Court's Flexibility in Timeline
The sanctify hearing demonstrated flexibility in time management to navigate challenges. Extended timelines allowed for evidence exchange and a fair process. The court's balance between efficiency and fairness was crucial in accommodating complex proceedings, emphasizing the importance of proactive debtor strategies and early preservation of options.
Exclusion of Out-of-the-Money Stakeholders
Utilizing section 901C4 of the Companies Act, the court excluded out-of-the-money stakeholders from the decision-making process. Valuation evidence played a pivotal role, with the court relying on the plan company's valuation to determine stakeholders' economic interests. This exclusion power highlights the significance of proper valuation evidence and strategic planning in restructuring plans.
DLA Piper’s David Manson unpacks the key lessons from Germany-focused real estate business Aggregate Holdings’ contested restructuring plan process before the English High Court in an interview with Debtwire Europe’s Hossein Dabiri.
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