The Inside Track

What two things should a client consider when choosing counsel for a complex insolvency filing in this jurisdiction?

The client should consider the counsel’s legal expertise and experience – especially in the field of insolvency and restructuring law and in fields relating to insolvency and restructuring (eg, banking and finance, corporate/M&A and labour law) – as well as the counsel’s business competence and understanding. The client should also ensure the counsel’s law firm has access to an experienced partner network of national and international attorneys, auditors and tax advisers whom the counsel can consult on complex issues if necessary.

What are the most important factors for a client to consider and address to successfully implement a complex insolvency filing in your jurisdiction?

Successful implementation of a complex insolvency filing requires substantial preparation. Depending particularly on the financial circumstances, the first step is to decide which kind of restructuring or insolvency proceeding fits the needs of the company: a restructuring on the basis of an out-of-court restructuring agreement, restructuring proceedings, reorganisation proceedings with or without debtor in possession or liquidation proceedings.

If reorganisation proceedings under the Insolvency Act are sought, it is recommended to draft the key points of a possible reorganisation plan before the filing of the insolvency application and, if possible, to present it together with the filing for opening of the proceedings. A financing plan for the period after the opening of the proceedings helps to ensure the continuation of the business. The plan should take into account the immediately necessary reorganisation measures (eg, closing of non-viable parts of the company).

Regarding the conclusion or approval of a reorganisation plan, it is necessary to convince the creditors of its fulfilment and to provide financing. A sensitive approach in connection with the various interests of the individual stakeholders involved in the insolvency proceedings is therefore also a decisive factor for successful implementation of a complex insolvency filing.

What was the most noteworthy filing that you have worked on recently?

We advised the financing banks of a media company and companies in the transport sector on the restructuring of their financings, the implementation of the reorganisation measures and the takeover of parts of the business by a strategic investor. We also advised a financing bank of a packaging company in relation to a lender-led solution, including a debt-to-equity-swap.

In the case of Bertsch Energy Group, the sale of the business was prepared with the exclusion of the general public and completed in an insolvency proceeding.

In all these cases, extensive negotiations and multi-disciplinary advising of the companies and the stakeholders were required.