In brief With a potential WeWork restructuring on the horizon, this article explores some unique issues landlords may face under their WeWork leases, with a focus on how courts around the world might address them. Key takeaways Landlords have built spaces that specifically cater to WeWork’s focus on co-working arrangements. As WeWork attempts to shed leases in a restructuring, landlords may be left with specially built spaces that are difficult to re-let. This may be particularly difficult when landlords have agreed in their WeWork leases not to compete for a period after termination of the le ..read more

This article was first published on Law360.com and reproduced with permission from Law360. The Differences Between Assumption and Reinstatement under the Bankruptcy Code Although a debt agreement may be considered a contract under which both parties have ongoing obligations, section 365(c)(2) of the US Bankruptcy Code expressly prevents a debtor from treating it as an “executory contract” that a debtor may “assume” or “reject” under section 365. Instead, the debt agreement analogue to assumption is reinstatement under section 1124(2), the provision that effectively allows a debtor to “assume ..read more

One of the benefits the US Bankruptcy Code offers debtors is the ability to assign freely contracts under which the debtor has ongoing performance obligations, even if the underlying contract contains a restriction or prohibition against such assignment. Section 365 of the Bankruptcy Code has its limits and does impose certain conditions to such assignment, such as the curing of defaults under the contract (other than so-called “ipso facto” defaults) and the requirement that the assignee be capable of future performance under the contract. One other limitation on the Bankruptcy Code’s freedom ..read more

On 20 January 2023, the Interim Proposal on the Reform of Secured Transaction Law (“Interim Proposal“) was published by the Japanese government. The Interim Proposal is, among other things, intended to govern security interests created by secured transactions, such as security assignments and sales with retention of title, that have been recognized by court precedents. The Interim Proposal also considers the introduction of a new type of security interest over all the assets of a company’s business. In this article, we briefly discuss key topics with respect to such security interests and the ..read more

Taking on the challenges, opportunities and benefits of talking about the energy transition and sustainability The importance of taking into account stakeholder attitudes to Environmental, Social and Governance (ESG) issues as part of business generally, but also a turnaround strategy, was highlighted in this session. Such stakeholders include customers, suppliers, investors and capital providers, which are also looking at their own ESG risk and strategy as part of the overall picture of a business. The session highlighted the extensive analysis and reporting banks and other business in key in ..read more

ABT Auto Investments Limited vs. Aapico Investment Pte Ltd and Ors [2022] EWHC 2839 (Comm.) In brief A cross-practice group in the London office of Baker McKenzie — led by Restructuring Partner, Priyanka Usmani, Disputes Resolution Partner Charles Thomson and Banking Partner Matthew Cox — represented Aapico who were successful in their argument that they had validly appropriated shares in a private company under The Financial Collateral Arrangements (No. 2) Regulations 2003 (“Regulations“). Key takeaways This is the first time that the English courts have had the opportunity to consider the m ..read more

In late August 2022, the Spanish Parliament passed the transposition into Spanish law of the Directive (EU) 2019/1023 of the European Parliament and of the Council, of June 20th 2019, on Preventive Restructuring Frameworks. The draft of this new Act was subject to multiple amendments and created great local expectations (also considerable controversy). The text finally enacted in Law 16/2022 introduces major reforms in the insolvency field which we hereby depict. Introduction of the so-called “Restructuring Plans” The transposition of the Restructuring Directive has entailed the abolishment of ..read more

The message from turnaround and restructuring leaders, Carlyn Taylor (FTI, US), Chris Laverty (Grant Thornton UK LLP) and Cos Borrelli (Kroll, Asia Pacific) is that advisory roles in restructuring have remained surprisingly limited across various jurisdictions, despite significant economic headwinds. In some jurisdictions though, that may soon change. US restructuring activity is picking up very slowly. Americans are experiencing the worst inflation in decades. However, the interest rate rises from the US Federal Reserve Bank point to a “soft landing” after the consequences of that inflation ..read more

In brief In Japan, any out-of-court workout requires the unanimous consent of all creditors to a restructuring plan. On October 4, 2022, the Japanese government announced that it is considering introducing new out-of-court workout rules. Under the proposed new rules, a restructuring plan will be binding if a majority vote of creditors and confirmation of the court is obtained. Such a majority rule is a common feature amongst schemes of arrangement in many other countries. In depth In Japan, any out-of-court workout requires the unanimous consent of all creditors to a restructuring plan. On Oct ..read more

The construction sector has long suffered from narrow margins, inappropriate risk allocation and cyclical bouts of insolvency. Jon Davies, Chief Executive Officer of the Australian Constructors Association (ACA), spoke today about the challenges facing the Australian construction industry, with a call for cultural change under the attention grabbing title ‘Disrupt or die’. Issue significantly affecting the sector include: labour shortages, exacerbated by constrained migration of skilled workers needed by the sector; falling productivity (a massive decline of 16.5% since 2014) to a level now l ..read more