An ILN webinar recap for corporate counsel and dealmakers
Speakers:
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Marc Hirschfield, Partner, Royer Cooper Cohen Braunfeld LLC (RCCB)
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Marc Skapof, Partner, Royer Cooper Cohen Braunfeld LLC (RCCB)
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Jeremy Whiteson, Partner, Fladgate LLP (London)
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Alistair Manson, Executive Partner, Opus Business Advisory Group (Moderator)
Why this matters
In volatile markets, every cross-border deal carries downside risk. This session reframed transaction planning through a “what if the worst happens?” lens—pinpointing the tools that preserve value across U.S. and U.K. regimes and how to deploy them quickly when trouble hits.
Five big ideas from the session
1) Venue strategy is a value strategy
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U.S. Chapter 11 is a powerful venue to centralize disputes, run sale processes, raise DIP financing, and confirm plans—even when most underlying rights are governed by state or foreign law.
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U.K. options include administration (often via pre-pack sale for speed and value protection) and the Restructuring Plan (court-sanctioned compromises with class voting and cross-class cram-down).
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Cross-border recognition matters: U.S. Chapter 15 and the U.K.’s CBIR/model law help each court respect the other’s process.
2) Mind the “Rule in Gibbs” (U.K.)
English courts generally won’t recognize the compulsory discharge of English-law obligations unless it happens through an English process. Practically: if your key debt (e.g., bonds/indentures) is under English law, expect to parallel a U.K. process or use a U.K. Restructuring Plan to bind holdouts.
3) Liquidity is leverage
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In the U.S., DIP financing can come with super-priority liens, milestones, and even roll-ups of prepetition debt—often giving the incumbent secured lender real control and setting a floor for sale pricing via credit bidding.
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In the U.K., there’s no formal “DIP” concept, but similar outcomes occur: the secured lender’s cooperation is pivotal to fund an administration or Restructuring Plan. Directors must avoid taking on unduly expensive funding without a credible rescue path.
4) Sale mechanics drive certainty
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U.S. section 363 sales: court orders cleanly define which assets transfer and which liabilities are left behind—reducing challenge risk.
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U.K. pre-pack administration: deal can be negotiated confidentially and executed immediately on appointment, preserving value where speed is paramount.
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Either way, expect to obtain local recognition to perfect transfers of foreign assets (e.g., real property or registered IP).
5) Start early, keep options open
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Early engagement preserves choices, value, and time to fix operational issues or negotiate consensual outcomes.
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Waiting until liquidity is exhausted narrows paths to “least-bad” options and empowers the most senior creditors.
Practical protections when the heat is on
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Automatic stay (U.S.) immediately halts collection actions and corrals litigation into one forum; courts can extend protections pragmatically to keep the case on track.
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U.K. moratoria (e.g., in administration) constrain creditor action; courts can also restrain aggressive tactics during a Restructuring Plan process.
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Stakeholder fairness: U.K. courts test whether dissenting classes are no worse off than the relevant alternative; U.S. plans require at least one accepting impaired class and can cram down others if statutory tests are met.
Directors & governance: keep the board safe—and useful
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U.S.: Management typically stays in control as debtor-in-possession; a creditors’ committee monitors and can pursue estate claims derivatively. Broad Rule 2004 discovery means expect deep transparency—another reason to plan early.
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U.K.: In formal insolvency, an officeholder investigates director conduct and can pursue misfeasance, wrongful trading, or value-leakage claims; disqualification is possible in serious cases.
Deal drafting that preserves value when markets turn
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Governing law & venue: Align with restructuring goals (e.g., English-law bonds may require English process).
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Security packages: Ensure filings and perfection across asset locations—don’t leave IP or guarantees unassigned.
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Financing covenants: Build DIP-friendly baskets and intercreditor mechanics that won’t paralyze a rescue.
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Sale-ready provisions: Contract assignment, change-of-control, and anti-assignment clauses should not block a court-approved transfer.
Questions GCs and deal teams should ask now
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Where is our realistic restructuring venue—and what makes it work (COMI, assets, contracts)?
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Which material obligations sit under English law (Rule in Gibbs exposure)?
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If we needed liquidity tomorrow, who funds it, on what terms, and how fast?
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Could we run a clean, court-approved sale in weeks—not months?
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Have we perfected security and IP assignments in every relevant jurisdiction?
About the speakers
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Marc Hirschfield and Marc Skapof (RCCB) advise debtors, creditors, committees, and investors on U.S. restructurings, sales, and special situations financing.
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Jeremy Whiteson (Fladgate) advises on U.K. restructuring and insolvency processes, representing banks, IPs, creditors, directors, and stakeholders.
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Alistair Manson (Opus) is an insolvency practitioner who leads complex appointments and cross-border cases.
Key takeaways (shareable)
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Venue dictates leverage—choose with the endgame in mind.
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English-law debt often needs an English solution (Rule in Gibbs).
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Funding = time = options. Line up rescue liquidity early.
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Court-supervised sales deliver certainty on assets vs. liabilities.
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The earlier you act, the more value you preserve.
Missed the live session? Watch the recording and download the slides here. For questions or introductions to the speakers, contact lindsaygriffiths@iln.com.
