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

Nama Update

Predictions for 2012

Introduction

Predicted 2011 total: 1,500 +

*statistics do not include personal asset receivership

source-www.insolvencyjournal.ie

www.InsolvencyJournal.ie Statistics

Corporate Receiverships

Jan to Sept 2011 2010 2009

16

37

Examinerships Liquidations

1004

1284

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

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

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

Lessons from McInerney

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

Other Legal Developments

Belgard Motors

Start Mortgages and Kavanagh v Lynch

Michael McLoughlin (Pharmacy) Limited

Bankruptcy Reform

Multi-Unit Developments Act, 2011

Commercial

Asset Disposal Strategy

Receivership AssetDisposal Strategy

AppropriateAsset

Manager

Trade/Rent+

Hold MT

Trading

Residential

Hotel & Leisure

Industrial

Sell Now

Package & Sell

The Push to Restructure

1. Agree a sustainable Senior debt

Earning / performing loan

2. Agree a structure for residual debt

Leverage recourse to promoter and their assets

Incentivise borrower to repay residual debt

Anti-embarrassment/Confidentiality provisions

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"

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

Corporate Restructuring Summit

Tom Kavanagh David Baxter Kavanagh Fennell A&L Goodbody