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Corporate Restructuring Summit

Corporate Restructuring Summit. Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody. Insolvency Statistics Headline Cases Current Trends Legal Update Asset Disposal & Debt Restructuring Strategies

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Corporate Restructuring Summit

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  1. Corporate Restructuring Summit Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody

  2. Insolvency Statistics Headline Cases Current Trends Legal Update Asset Disposal & Debt Restructuring Strategies Nama Update Predictions for 2012 Introduction

  3. www.InsolvencyJournal.ie Statistics 37 1284 1004 16 Corporate Receiverships Examinerships Liquidations Jan to Sept 2011 2010 2009 Predicted 2011 total: 1,500 + *statistics do not include personal asset receivership source-www.insolvencyjournal.ie

  4. Receiverships: Superquinn; Elliotts; SM Morris; The Heritage; Celtic Bookmakers Statutory Receiverships: Grehan; Daly; Dunne; McNamara Share Receivership: Quinn Group Examinerships:McInerney Group; Xtra-Vision Liquidations: Bowen Construction;Total Fitness Headline Cases

  5. Lack of liquidity still critical Level of enforcement: static Restructuring Banks showing patience with trading companies Auctioneering firms enter market; Allsop auctions Other than Google deal, commercial property slow Current Trends

  6. Lessons from McInerney • Senior lender opposition is very challenging • Secured creditors can be crammed down • Forcing secured creditors to stay in – less feasible • "Exceptional Circumstances" comment by Justice Clarke • Valuation: Examiner’s scheme -v- liquidation/receivership • Expect cross-examination of valuers/experts • Pre-process negotiations may influence a judge

  7. Shadow Director issues • Current law • Buzzle -v- Apple, NSW Supreme Court decision (2010) • If the actions of lender (i.e. extension of credit with conditions attached) are… • part of commercial negotiations & relying on contractual rights • at arm’s length • looking after lender’s own interests and • allow board to exercise some discretion then… …risk can be mitigated

  8. Other Legal Developments • Belgard Motors • Start Mortgages and Kavanagh v Lynch • Michael McLoughlin (Pharmacy) Limited • Bankruptcy Reform • Multi-Unit Developments Act, 2011

  9. Asset Disposal Strategy Receivership Asset Disposal Strategy Commercial Trade/Rent + Hold MT Appropriate Asset Manager Residential Sell Now Hotel & Leisure Industrial Package & Sell Trading

  10. The Push to Restructure Agree a sustainable Senior debt Earning / performing loan Agree a structure for residual debt Leverage recourse to promoter and their assets Incentivise borrower to repay residual debt Anti-embarrassment/Confidentiality provisions

  11. NAMA update New Insolvency Team to monitor Receiverships Challenges by borrowers but also… …NAMA working with borrowers Capability, co-operation & full disclosure NAMA seeking undertakings "not to move COMI"

  12. Predictions for next 12 months Distressed residential property auctions to continue NAMA to try and kick-start commercial property market Pre-packs in the retail sector to increase A few large, over-leveraged corporates to be restructured Consensual work-outs progressed by banks Foreign investment into distressed situations to increase

  13. Corporate Restructuring Summit Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody

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