We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byEfrain Bink
Modified over 2 years ago
© De Pardieu Brocas Maffei A.A.R.P.I. De Pardieu Brocas Maffei A.A.R.P.I. – 57 avenue d’Iéna – CS 11610 – 75773 Paris Cedex 16 – T: +33 (0)1 53 57 71 71 – F: +33 (0)1 53 57 71 70 – www.de-pardieu.com R3 INSOL Europe VALUATION DISPUTES AND MECHANISMS FOR RESOLVING THEM Jacques Henrot London - June 17, 2011
© De Pardieu Brocas Maffei A.A.R.P.I. The French Perspective Q. When do valuation issues typically arise in France? A. Depends on the type of restructuring process If process at an early stage (totally out of court process or lightly court monitored mandat ad hoc or conciliation), valuation can be key (in case there are several layers of debt of course) to know where value breaks. If process is already at the bankruptcy court stage (sauvegarde or redressement judiciaire), valuation an issue only in case creditors are ready to convert (and the shareholder’s willing to be diluted). Otherwise, as seems to be the case in the Netherlands, valuation is an issue in case of foreclosure by the senior lenders on collateral : if such foreclosure is by way of private sale, or if the senior lender petition the Court for an appropriation of the collateral, which in practice are two available routes in France only in case of liquidation. R3/INSOL Europe – London – June 17, 20112
© De Pardieu Brocas Maffei A.A.R.P.I. The French Perspective A recent statutory improvement to the mechanism of private sale : The valuation of the pledged asset can be initiated early on in the process without having to wait for the Court being actually petitioned to allow a private sale/an appropriation of the collateral. R3/INSOL Europe – London – June 17, 20113
© De Pardieu Brocas Maffei A.A.R.P.I. The French Perspective Valuation issues can be important in case of a redressement judiciaire (rehabilitation) of holdcos. Indeed, French law provides for a technique to document share pledges known as nantissement de compte d’instruments financiers or nantissement de CIF, which technique gives to the pledgee a retention right on the pledged shares. And this retention right can be opposed in all circumstances, including to the bankruptcy trustee of the pledgor/grantor. As a result, any reorganization plan calling for the sale of the subsidiary concerned or implying a change of ownership of those shares requires the consent of the pledgor. And the pledgor can condition its consent to either the full repayment of its claim whatever the value of the pledged subsidiary’s shares is, or alternatively ask to be paid at least the full « value » of the pledged shares before releasing its pledge (for a recent precedent : the Financière Hélios case). R3/INSOL Europe – London – June 17, 20114
© De Pardieu Brocas Maffei A.A.R.P.I. The French Perspective In a standard redressement judiciaire (rehabilitation) of an industrial or service company, valuation issues are not central since the French rule is that creditors vote in the finance creditors’ committee with the same weight irrespective of their rank. In other words, even if value breaks in the senior, lower ranking creditors - if they do represent more than 2/3 of the total outstanding amount of admitted claims - can impose their rule. NB : Bondholders - which for the moment vote separately of the suppliers’ and creditors’ classes - might, by legislative amendment, be made part of the finance creditors class. As a result, in some cases, bondholders could join forces with lower ranking finance creditors in order to out-number (in terms of voting rights) the seniors : an approach which is clearly the opposite of the system applicable in the UK and which will require remedies : one of them could precisely be to have recourse to a valuation to know where value breaks before giving the right to majority junior creditors to out-vote the seniors. NB : the problem is all the more serious than equity contributions made in the form of shareholders’ loans are deemed debt (with no equitable subordination). As a result, shareholders might participate to the vote in the creditors’ committee and also join forces with junior lenders and bondholders as the case may be, an unacceptable result when the company is not worth even its senior debt. R3/INSOL Europe – London – June 17, 20115
U.S. Private Equity Fundraising Hedge Funds.
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
7 - 1 Lecture Nine Raising Capital: Sources of Long Term Financing Internal Sources: Retained Earnings Depreciation External Sources: Borrowing: Bonds.
No Assignments this week!! Just the Discussion board!! Yay – no Homework!!!!
Bankruptcy. What is Bankruptcy? Bankruptcy is a legal proceeding in which a person who cannot pay his or her bills can get a fresh start by canceling.
1 CHAPTER 25 Bankruptcy, Reorganization, and Liquidation.
© De Pardieu Brocas Maffei A.A.R.P.I. The financing of debtors and insolvent entities 17th Global Insolvency and Restructuring Conference IBA – Paris -
Business Technology Mr. Bernstein Greene, pp : Finance Your Business December 2, 2013.
Entrepreneurship Mr. Bernstein Financing the Small Business Start-Up, pp December 2015.
Bankruptcy, Reorganization, and Liquidation
1 TMA Europe Conference Madrid, 8 June 2012 Will European Reforms put an end to UK Scheme Tourism? Panellists: Stephen Taylor, AlixPartners (London, UK)
1. 2 “As in many areas of law, bankruptcy law must balance between competing interests. When an individual or business files for bankruptcy protection,
Xu Che. Bankruptcy is a legal status of a person or organization that cannot repay the debts it owes to creditors. Liabilities exceed Assets Negative.
Financing: Notes and Mortgages
Chapter 16 Financing. Learning Objectives Identify the common methods of debt financing for firms. Identify the common methods of equity financing.
1 The Mortgage Market. 2 Introduction We have already noted real estate is capital intensive The typical capital structure is dominated by debt That is.
Chapter Nine Corporate Financial Structure. Corporate Finances: Key Terms Security: a share, participation, or other interest in property or an enterprise.
McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved CHAPTER2CHAPTER2 CHAPTER2CHAPTER2 Financing: Notes and Mortgages.
2-1 Copyright ©2008 by The McGraw-Hill Companies, Inc. All Rights Reserved Chapter 02: Real Estate Financing: Notes and Mortgages McGraw-Hill/Irwin Copyright.
Comprehensive Volume, 18 th Edition Chapter 37: Bankruptcy.
Securities and Stock Exchange Stocks and Bonds. Mag. Maria Peer 2 Securities Documents acknoledging the investment of money in either the money market.
Africa Rail 2009 Workshop 23 June 2009 Different Types of Financing for Mobile Equipment Greg McKenzie Head of Asset Finance, Investment Banking Division,
THE 5 C’S OF CREDIT. Capacity Your ability to repay.
2 Distinctions of companies Separate legal entity Separation of ownership and management Ownership through shares Limited liability is usual. It is the.
© The McGraw-Hill Companies, Inc., 2004 Slide 13-1 McGraw-Hill/Irwin Chapter Thirteen Accounting for Legal Reorganizations and Liquidations.
SB Finance Summary of the lesson: 1.Initial Capital Requirements. 2.Forms of Capital: Debt, Equity and Other Loan Terminology. 3.Found rising and Sources.
CHAPTER FIFTEEN Lending Policies And Procedures The purpose of this chapter is to learn why sound lending policies are important to banks and other lenders.
BANKRUPTCY Procedures and Outcomes Andrew Pickett.
Secured Transactions Assignment 27
THE 5 C’S OF CREDIT. Character Your attitude towards meeting your credit obligations.
Bonds and Their Valuation Chapter 7 Assessing Risk 7-1.
RadioShack The Unitranche Structure Tested American Bar Association Business Law Section Annual Meeting September 17, 2015 Presented by: Rick Antonoff,
17 Chapter Ending the Venture McGraw-Hill/Irwin Entrepreneurship, 7/e
Business Funding & Financial Awareness
EFFECTIVE DECISION MAKING. Making decisions about the disposition of non-performing assets is very difficult: Inadequate information on which to base.
The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter
1 Chapter 15 FINANCIAL DISTRESS: TURNAROUND OPPORTUNITY OR LIQUIDATION ENTREPRENEURIAL FINANCE.
Equity Versus Debt Debt Equity Credit Card ST Credit Facility Bank Loan Bond SharesVenture Capital Business Angels Creditors get: Periodic interest payments.
Financing. Equity financing Debt financing Equity financing: owned Stocks: Claims on assets Part ownership Common stock Preferred stock.
Chapter 35 BANKRUPTCY. 2 Bankruptcy Law Jurisdiction over bankruptcy cases is in U.S. district courts, which may refer all cases and related proceedings.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Slides developed by Les Wiletzky Wiletzky and Associates Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany.
AN OVERVIEW OF PROJECT FINANCE IN PRIVATE-PUBLIC PARTNERSHIPS FINANCE 101 T ERRI S MALINSKY Managing Director B.C.
© 2007 Thomson South-Western Chapter 25 Bankruptcy and Financial Distress Professor XXXXX Course Name / Number.
Irwin/McGraw-Hill 1 22 © The McGraw-Hill Companies, Inc., 1999 Corporations in Financial Difficulty Baker / Lembke / King.
Chapter Eighteen. Use, Sale, or Lease of Property After reading this chapter, you will be able to: Describe the details of the actual liquidation process.
Bankruptcy & Reorganization Business Finance 335 Supplemental Material.
Thomson/South-Western©2008 Chapter 9 Mortgage Theory and Law _______________________________________.
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 20 Corporations in Financial Difficulty.
Welcome to the Presentation
© 2017 SlidePlayer.com Inc. All rights reserved.