1. Restructuring UK and foreign operations using formal processes in the UK : an introduction to the UK domestic and cross-border toolbox Glen Flannery, Partner, Nabarro LLP 26 June 2009

2. Nabarro : clarity matters London, Sheffield and Brussels 130+ Partners and 350+ Associates Expanding European Alliance International Workflow

3. Restructuring & Insolvency at Nabarro SwissAir (Swiss and Dutch liquidators) Crisscross\Dynegy (Dutch sole shareholder) Landsbanki (Teathers and KPMG) Kaupthing (Isle of Man Co and PWC) Stanford International Bank (SEC) Madoff (Cayman feeder fund) Lehman Brothers (Japanese liquidator)

4. Topics Formal restructuring processes in the UK Recognition of foreign restructuring processes in the UK Forum shopping and migration Use of Protocols

5. The domestic toolbox : formal restructuring processes in the UK Scheme of arrangement –A court sanctioned procedure whereby a company can make a compromise or other arrangement with its members or creditors (or any class of them) Company voluntary arrangement –A contractual plan agreed with creditors for a compromise of debts or scheme of arrangement of the company’s affairs, with the assistance of a supervisor, with the aim of avoiding an insolvent liquidation Administration –A procedure which ring-fences the company from claims against it, while an administrator formulates and implements proposals, ideally to rescue the company, but if that is not practicable, to achieve a better realisation of the company’s assets than if there were an immediate winding up

6. The cross-border toolbox : recognition of foreign processes in the UK The “section 426 club” –effective 25 July 1986 –Cricket-wide The European Insolvency Regulation –effective 31 May 2002 –EU-wide The Cross-Border Insolvency Regulations –effective 4 April 2006 –World-wide Common law comity –Effective long before my lifetime (!) –World-wide

7. Section 426 Club Anguilla, Australia, Bahamas, Bermuda, Botswana, Brunei, Canada, Cayman Islands, Channel Islands, Falkland Islands, Gibraltar, Hong Kong, Isle of Man, Malaysia, Republic of Ireland, Montserrat, New Zealand, South Africa, St Helena, Turks and Caicos Islands, Tuvalu and the Virgin Islands Operates by way of letters of request, where it would require something extraordinary for the request to be refused When considering whether to offer relief, courts can apply the local substantive law, or that of the foreign jurisdiction

8. European Insolvency Regulation Applies directly across all EU states, save for Denmark Main proceedings where debtor has “centre of main interests” (“COMI”) –automatic effects and recognition throughout EU –law of main state governs proceedings and their effects throughout EU –subject to exceptions (e.g. rights in rem and contracts re immoveable property) and secondary proceedings Secondary/territorial proceedings where debtor has an “establishment” –assets in secondary state carved out of main proceedings and liquidated in accordance with law of secondary state

9. Cross-Border Insolvency Regulations English implementation of UNCITRAL Model Law (akin to US Chapter 15) Substantially similar to UNCITRAL Model Law, with specific provisions to deal with process in Great Britain Not limited by reciprocation Recognition as foreign ‘main’ proceedings = stay akin to compulsory liquidation and access to discretionary relief Recognition as foreign ‘non-main’ proceedings = no automatic stay but access to discretionary relief

10. Common law comity Let’s not forget where we started ! The English court’s inherent jurisdiction

11. Forum shopping and migration Deutsche Nickel Schefenacker Hans Brochier Eurotunnel

12. Use of Protocols Eurodis Lehman

13. Thank you for listening Glen Flannery Partner Banking Finance & Restructuring T: +44 (0)20 7524 6867 M: +44 (0)78 2542 0558 F: +44 (0)20 7868 3867 E: g.flannery@nabarro.com