BTG Global Network News

Network Members Meet up in London

uat — Mon, 12 Dec 2011 10:39:41 GMT

Londoners tend to think their city is the centre of the universe, but for three days in early November this fiction became a reality as BTG GN members gathered for our 2012 World meeting.

The base for the meeting was the excellent Cumberland Hotel near Marble Arch, which provided us with sensibly priced accommodation (at least by London hotel standards), high quality conferencing facilities and a very decent welcome dinner at celebrity Chef, Gary Rhodes’ restaurant, W1 Brasserie.

Our thirty foreign visitors and UK participants were treated to a technical programme which drew universal praise, especially from our regular attendees, many of whom commented that it was the best so far at one of our network meetings. The topics ranged far and wide, starting with a sophisticated presentation on techniques for working together and winning major cross border assignments and ending up with a sad explanation of the desperate financial situation in Hungary.

In between we learnt about early warning systems for troubled companies, managing security risk issues for hotels, worrying developments on the priority of pension liabilities in UK insolvency assignments and the international impact of the world’s most draconian anti-corruption legislation (the UK’s new Bribery Act).

There were fascinating sessions covering the development of the Sauvegarde system in France, the impact of the Eurozone crisis on the banking systems of Germany & Spain, how cross border restructuring works in India, the problems in Northern Ireland of living next door to the financial meltdown in Southern Ireland, the current situation in China and a thought provoking insight into the causes of the US recession and it’s continuing effect on the world’s biggest economy.

Most challenging of all was a philosophical view from Israel of how insolvency processes play a part in social justice and how insolvency practitioners have to recognise the wider interests of society, not just the letter of the laws which they are using.

We were delighted to welcome and to hear a presentation from our newest member, Abousleiman & Co from Beirut in Lebanon. Their managing director, Wissam Abousleiman made a significant contribution to both the technical programme and the networking throughout the meeting.

Professional markets around the world have one thing in common: people do business with people, not with firms and professional brands. This makes the social side of our meetings every bit as important as the technical programme. BTG GN is one of the most effective international networks in creating fellowship and productive professional relationships between members.

Old friendships were strengthened and new ones made in and around the hotel, but also at our three social events: the welcome dinner, a noisy dinner at the Dover Street jazz club and wine and finally at one of London’s most iconic venues: the tea room at Fortnum & Mason.

This last meeting before we all went our separate ways around the globe summed up the joy of the network. Thirteen of us met for a traditional and enormous English afternoon tea, which is a deeply unlucky number in all Anglo Saxon cultures. Soon the talk was of unlucky numbers in other cultures, such as China, India and the Middle East. Somehow this turned into a discussion on the different challenges in dealing with labour unions and employment laws around the world. Who knows what we would have explored next, if only time had allowed.

Our network members come from all continents, many countries and very diverse backgrounds, whether social or business. They work under very different laws and judicial systems, with every possible variation of creditor and debtor rights. But bring them together and all they want to do is share their thoughts, knowledge and experience and learn from each other. It is a miracle of communication in a troubled world.

Farber Financial Group sponsors Canda's pre-eminent Private Equity showcase event

uat — Thu, 10 Nov 2011 11:19:33 GMT

Association for Corporate Growth (ACG) Offering Friends of Farber almost $200 Discount Off Conference Fees

Farber Financial Group is proud to be a significant sponsor of the 2011 ACG Toronto Capital Connection, Canada's pre-eminent Private Equity Showcase on Tuesday, November 15th at the Metro Toronto Convention Centre, South Building.

"Farber is a financial advisory services firm that works with companies in various stages in their lifecycle to assist them with growth, financing, underperformance and distress, fraud, restructuring, exit and succession," said Gary Lifman, Joint Managing Partner of Farber Financial Group. "We are extremely proud of our work with many of the private equity and other service providers who will be attending Capital Connection, and its our pleasure to sponsor one of the most important business events in Canada."

Given their strong and supportive relationship with ACG Toronto, they have arranged a substantial discount off conference fees available to friends of Farber Financial Group. Simply click here to visit the Registration page -- and use the discount code "CE EXT".

At present, ACG Non-Member pricing is $480.25 (tax included). Use "CE EXT" and as you'll pay only $282.50 -- that's a $197.50 discount. (Note: ACG pricing changes after October 31)

First 100 People to the Farber Booth Get a Starbucks Card

Farber will also be an exhibitor at the Capital Connection. Look for our booth. Geoff Morphy, a member of the ACG Toronto Capital Connection Organizing Committee and a Senior Vice President in the Corporate Finance, Transactions, Succession Planning & Business Valuation practice is pleased to announce that the first 100 people who give us their business card while visiting the Farber Booth during one of the Breakout Sessions get a $5.00 Starbucks Gift Card.

Look for the Farber Attendees

Eric Klein, Partner and Leader of Corporate Finance, Transactions, Succession Planning & Business Valuation practice
Geoff Morphy, Senior Vice President, with the Corporate Finance, Transactions, Succession Planning & Business Valuation practice
Nathan Treitel, Business Valuator with the Corporate Finance, Transactions, Succession Planning & Business Valuation practice
Lewis Rose, Leader of the Turnaround & Interim Management practice
Ian Brenner, Leader of the CFO Resources practice
Hylton Levy, a Trustee in Bankruptcy with the Insolvency & Restructuring practice
Peter Crawley, Manager with the Insolvency & Restructuring practice

Types of Deals

Going Private, Private Equity, Subordinated Debt, Mezzanine Financing, Venture Capital, Senior Debt, Bridge Financing, Working Capital, Strategic Partnerships, Mergers, Acquisitions, Divestitures, Exit Planning, Succession Planning, Business Valuations, Turnaround Management, Interim (CEO, CFO, COO, CRO) Management, Profit Enhancement, Formal Insolvency – Receiver or Trustee, CCAA, Restructuring, Asset Concealment & Destruction, Asset Misappropriation, Bankruptcy or Insolvency Fraud, Commercial Disputes, Shareholder Disputes, Matrimonial Disputes, Embezzlement, Ponzi & Pyramid Scheme Investigation, Litigation Support, and Transaction Fraud.

About Farber Financial Group

Since 1979, Farber Financial Group has provided a range of specialized financial services including corporate insolvency and restructuring, forensic accounting, fraud investigations, corporate finance, mergers and acquisitions, business valuations, distressed financial advisory services, turnarounds and crisis management, interim CEO, CFO, COO and CRO, management, profit enhancement and strategic opportunity assessments. A more complete description of these services may be found on our website at www.farberfinancial.com.

Follow Farber Financial Group on Twitter and LinkedIn.

KS International Malta Announces New Partners

uat — Thu, 13 Oct 2011 15:25:50 GMT

KSi Malta is one of the leading medium-sized audit, accounting, tax and consulting firms in Malta and has provided services to local and international clients for over two decades.

KSi Malta is now a member firm of two well established international networks; Kingston Smith International and BTG Global Network. A further amalgamation with AIG will bring further incentives to KSi Malta to further expand international professional connections.

KSi Malta has recently promoted as three new partners Mr. Dennis Mark Gauci, Mr. Aldo L. Zammit and Mr. Brian Farrugia.

Dennis Mark Gauci, IT Partner
Dennis Mark Gauci joined KSi Malta in February 2008. He is the partner in charge of all information technology related matters. After graduation he was employed by one of the largest IT companies in Malta where he worked for more than three years. His main duties where implementing new IT infrastructures ranging from web & mail security, backup and fax, networking, servers configurations, firewalls, remote management, virtualization amongst many others.

Aldo L. Zammit, Tax Partner
Aldo Zammit started his career in 1997 with a leading accountancy and auditing firm. Aldo started off in the accountancy department and later joined the audit team where he gained exposure to various assignments, both local and foreign. In 2001 Aldo joined the Tax Compliance Unit within the Ministry of Finance during which period has gained considerable knowledge regarding the area of taxation. Aldo joined KSI Malta in 2008. Aldo was appointed Manager to supervise the audit staff and in 2010 he was admitted as partner.

Brian Farrugia, Audit Partner
Brian Farrugia has been in the profession for the last 6 years. In 2005, Mr. Farrugia joined KSi Malta as a junior auditor. During this period he carried out statutory audits of companies in construction, retail, hospitality, and gaming industry. He undertook EU work for the Ministry of Resources and Rural Affairs. He was also responsible for accounting clients mainly in the manufacturing and hospitality industry. Mr. Brian Farrugia was appointed partner in 2011. He is the Independence Principal and is responsible to maintain and update the practice records relating to independence and to take appropriate action regarding identified threats to independence.

Joseph Gauci, Managing Partner, said: “"The new partners are all qualified, experienced and wholly committed to the firm. The appointments ensure that KS International Malta provides the best service and advice for its clients. I wish them every success in their new roles.”

Why nothing is impossible in BTG Global Network

Nick Hood — Wed, 22 Jun 2011 11:07:54 GMT

When we received a request late last week from BTG GN member Zoltan Tenk at Noerr & Partner in Budapest for help in finding a lawyer to advise a Hungarian client about issues in Yemen, even my internationalist eyebrows were raised.

Over the years we have completed many Mission Impossible tasks, most recently finding a choice of two law firms with insolvency expertise in Togo in West Africa for Otto Lobo at Motta, Fernandes Rocha in Brazil.

On a previous occasion we managed to find an ex-patriate Australian lawyer to serve legal documents on a fleeing UK consumer bankrupt, who we had tracked down to the South Pacific island chain of Vanuatu. This was all done within twenty hours with a great deal of help from the Sydney and Brisbane offices of our good friends at PPB in Australia.

But sadly there are many issues currently in Yemen and this did look like something where we would struggle to succeed.

We hadn’t allowed for the extraordinary reach of the BTG GN family. I asked for help from my colleague, Simon Fordham of BTG Global Risk Partners here in London. He couldn’t think of a suitable lawyer in Yemen, but the conversation was overheard by one of his colleagues, who by chance had met a corporate intelligence specialist from Dubai that morning.

A quick email to this contact was passed on to his business partner in Dubai and within two hours we had the name of a well-respected law firm in Sana’a in Yemen. This has now been passed on to Zoltan in Budapest and we hope that his client can now get the advice he needs. Solving the actual problem may be much more difficult, of course, but at least he can make a start.

So the message is clear: the worldwide reach of the BTG Global Network has very few limits. If you need help anywhere, please ask us and we will see what we can do.

It makes me think of a quotation I remember from many years ago: “the impossible we do today, miracles can take a little longer”.

Oxbridge Signs Representation Agreement With KSi Malta

uat — Wed, 15 Jun 2011 11:16:30 GMT

London, United Kingdom, Vancouver, British Columbia, and G’Mangia, Malta – June 14, 2011

Oxbridge Ventures, Inc., a Vancouver, Canada based private equity group that manages investments for the privately held Argentum Group of Companies, has announced that it has signed a representation agreement with KSI Malta.

KSi Malta is a leading audit firm based in Malta. The firm offers a wide range of services, including audit, accountancy, tax, corporate finance, and consultancy. KSi Malta is a member firm of KS International and of BTG Global Network, two of the largest international accounting groups in the world. KS International is an association of independent accounting firms located around the world who provide clients with a range of accounting, consulting and taxation services. KS International has members throughout the world to deal with various international business requirements. KSi Malta operates from its office in G'Mangia and offers a very personal service to its clients. The firm has a large portfolio of local and international clients and its partners have all worked with the big 4 and specialize in various professional areas. See www.ksimalta.com

Oxbridge Ventures Inc. is a private equity group that makes debt and equity investments for its own account on a non‐brokered basis. Oxbridge has invested more than $3.5 billion of its own funds in the past 60 months. See www.oxbridgeventures.com.

Under the terms of the representation agreement, Oxbridge will be offering Maltese and other European issuers preferred access to the international capital markets through its proprietary structured lending program, which offers synthetic or structured leases to clients to fund projects. These facilities are characterized by small down payment requirements (10%), exceedingly low interest rates (4.25%), high LTV ratios (up to 90%), non recourse structuring (no personal guarantees), long repayment terms (up to 40 years), rapid funding (usually within 30 to 60 days of an application being accepted) and loan sizes of between $1 and $20 million. Oxbridge`s structured loan products can be used in a variety of projects, including:

New Real Estate Construction - of all types of real estate, such as new business and industrial parks, multifamily, manufactured housing, office structures, marinas, hotels, casinos, senior and student housing facilities, resorts and new manufacturing facilities
Traditional and Alternative Energy Projects, including solar, wind, hydrogen fuel cells and other technologies
Equipment Purchases - including industrial, mining, and other equipment
Infrastructure Projects - including roads, damns and power plants
Acquisitions - of equity interests in operating companies or hard assets
Instalment Notes- for purchases of businesses or other assets
Leverage Accounts Receivables - using a portion of invoices being tendered to generate long term financing
Supply Chain Financing - including the financing of major inputs
Export Financing - of customers, suppliers, and other counterparties
Cash Flow Management - levering existing cash flows generated by businesses to fund any of the above
Early Stage Company Finance -for companies with a minimum of $2,000,000 in sales

“We are extremely excited to have partnered with KSI Malta on this ambitious new project, which significantly extends our reach to many issuers in the Mediterranean and Europe, areas of the world that have sometimes lacked quick and easy access to the international capital markets on favourable terms``, said Karim Rajani, the Chief Executive Officer of Oxbridge Ventures Inc.

Maltese registered issuers seeking more information on the products and services offered directly by Oxbridge Ventures, Inc. should contact:

Joseph Gauci

Managing Partner

KSi Malta

Tel: 00356 21 226176

Fax: 00356 21 226019

Mob: 00356 79426592

jgauci@ksimalta.com

www.ksimalta.com

The BTG GN family meet in Cyprus

uat — Tue, 14 Jun 2011 13:10:30 GMT

Despite the efforts of yet another Icelandic volcano to ruin the party for a second successive year, over thirty of our network friends from 16 different countries came together in Cyprus at the end of May to renew old friendships and make new ones.

The weather was a little unkind, with unseasonal rain and cloud instead of the usual Mediterranean sun and then a strong wind to turn our boat trip into a considerable challenge for good and bad sailors alike. But both the technical programme and the social events were huge successes.

A full day of presentations and panel sessions was sandwiched between two dinners and our maritime adventure. The emphasis of the programme was to look at how 2011 was turning out for insolvency practitioners and restructuring professionals. But we also explored a number of specialist topics, including the maritime piracy crisis, on which Simon Fordham and Liam Morrissey from BTG Global Risk Partners provided a hugely entertaining view. Andries de Vaal of Salon Consulting shared his lifetime of experience in the hospitality sector.

We had one panel debating the European real estate market and its many challenges and another looking at the Eurozone sovereign debt crisis. We were indebted to Peter Walker from BTG in London for running the first with input from Zoltan Tenk of Noerr & Partner in Hungary. George Bazinas from Bazinas Law Firm in Athens and Alessandro Scarso from Pluta’s Milan office provided two robust defences of the approach being taken by Greece to its problems and the relative strength of Italy (at least compared to the UK) in the second, despite a gloomy introduction from the Chairman.

Several members showcased their firms and their jurisdictions – Marios Kallias from Kallias & Associates in Cyprus, Waleed Hilal from Vision Consulting Group in Egypt, Joseph Gauci from KSI Malta and Tunde Ajayi from Babington Ashaye & Co in Nigeria, the latter giving a great insight into the realities of restructuring insolvent state-owned enterprises.

Pawel Kuglarz from Beiten Burkhardt in Poland managed to make the latest changes to the Polish insolvency law interesting, which was a triumph of good humour over a bad legal reform process. Martin Prager from Pluta in Germany gave us a fascinating and, as usual, very clear update on changes in the German insolvency system, set against the background of some illuminating statistics on the European business failure market over the past few years.

One of the highlights was a stimulating presentation on two turnaround cases from our Indian contingent – Ambarish Chatterjee, Rajiv Jaiswal and Sandeep Kumar Gupta representing Integrated Capital Services in New Delhi. For those of us with cynical views of the restructuring legislation there, this was a refreshing reminder that where there’s a will, there’s always a way to achieve a good result.

Probably most fascinating of all, amid all of these great presentations, was a wide ranging review of the different ways certain key aspects of the insolvency process work in jurisdictions around the world. This was Ofer Shapira of Shapira & Co in Israel sharing his experiences from his worldwide Leadcom insolvency, using questionnaires completed by a number of the delegates. This was a perfect example of what BTG Global Network can achieve in cross border cases and why we believe that it is the best and most comprehensive network in our sector.

This first class technical programme drew praise from all who attended for the quality of the speakers and their material, and also the range of topics covered. Our thanks go to all of those who gave up their valuable time to prepare and deliver such wonderful material. Their dedication was amazing, allowing for the fact that many had travelled long distances, some arriving just the day before or even in the early hours of that morning.

Away from the conference hall, we enjoyed two dinners – one an Italian buffet at the Amathus Beach hotel where the meeting was based and then a hugely entertaining traditional evening of Cypriot food, wine and dancing at the Istorikon Tavern in the old part of Limassol. These were not just very enjoyable occasions and great opportunities for professional networking, but also a chance for our members and their guests to relax together socially and for friendships to deepen.

The meeting closed with an experience that many of us present will take a long time to forget, when around thirty of us took to the Mediterranean on a luxury cruise ship for three hours of sailing around Cyprus. What nobody had anticipated was just how strong the wind would be. For the lucky ones, it was an fun exercise in moving around on the violently swaying deck without spilling our drinks. Unfortunately for others it meant severe seasickness, but mercifully this ended the moment we returned to the safety of the harbour. It was a great relief to see everyone smiling again as we headed back to the hotel.

My sincere thanks go to our host, Marios Kallias for his hard work and giving up his valuable time to make local introductions, negotiate deals and in use his language skills to sort out the occasional problem, notably the bus driver who couldn’t find the Istorikon Tavern!

One other person was fundamental to the success of the meeting through her tireless work and her consummate skills as a conference organizer. Our communications and marketing manager, Jo Hancock has been a tower of strength, dealing with all the administration and finances of the meeting, liaising with the hotel, making all the many other arrangements and pulling together the paperwork for the social and technical side, which is a huge and very difficult task. She never stopped smiling despite the many problems she had to cope with. We all thank you for an outstanding job very well done.

So we can look back to a highly successful meeting and look forward to the next time we can come together to celebrate the joy and the benefits of being members of the BTG Global Network family. This will be in London from the 3rd to the 5th of November 2011.

The Top Insolvency Lawyers in Germany

uat — Tue, 29 Mar 2011 11:16:34 GMT

We are very proud to congratulate Michael Pluta of Pluta Rechtsanwalts GmbH for being chosen amongst the best professionals in Insolvency Law by German WirtschaftsWoche magazine.

The complex process was based firstly on extensive research and expert interviews. A total of 70 proposals made it through to the second round and 38 of these were included in the elite panel. The final assessment was judged by 5 industry experts on proven success, long standing experience, team or office capacity and specialisation. The 25 lawyers who scored the highest are listed below in alphabetical order.

25 Top law firms for insolvency law

Name	Company	Where
Dr. Winfrid Andres	Andres Schneider	Düsseldorf
Dr. Biner Bähr	White & Case	Düsseldorf
Dr. Siegfried Beck	Dr. Beck & Partner	Nürnberg
Dr. Georg Bernsau	BBL Bernsau Brockdorff & Partner	Frankfurt
Kolja von Bismarck	Linklaters	Frankfurt
Dr. Eberhard Braun	Schultze & Braun	Achern
Dr. Lucas Flöther	Flöther & Wissing	Halle (Saale)
Dr. Michael Frege	CMS Hasche Sigle	Frankfurt
Frank Grell	Latham & Watkins	Hamburg
Ottmar Hermann	Hermann Rechtsanwälte	Frankfurt
Peter Hoegen	Allen & Overy	Frankfurt
Dr. Michael Jaffé	Jaffé	München
Dr. Frank Kebekus	Kebekus et Zimmermann	Düsseldorf
Dr. Bruno Kübler	Kübler	München
Dr. Rainer Maus	FRP-Rechtsanwälte	Wuppertal
Dr. Klaus Pannen	Dr. Pannen Rechtsanwälte	Hamburg
Horst Piepenburg	Piepenburg-Gerling Rechtsanwälte	Düsseldorf
*Michael Pluta*	*Pluta*	*Stuttgart*
Prof. Rolf Rattunde	Leonhardt Rechtsanwälte	Berlin
Christopher Seagon	Wellensiek Rechtsanwälte	Heidelberg
Dr. Andreas Spahlinger	Gleiss Lutz	Stuttgart
Dr. Martin Stockhausen	Görg Rechtsanwälte	Köln
Dr. Heiko Tschauner	Hogan Lovells International LLP	München
Dr. Lars Westpfahl	Freshfields Bruckhaus Deringer	Hamburg
Dr. Mark Zeuner	WZR Wülfing Zeuner Rechel	Hamburg

The article was published in the February issue of WirtschaftsWoche magazine. You can read it in full here

INSOL Singapore 2011

uat — Mon, 21 Mar 2011 12:46:34 GMT

Singapore was the location for this year’s annual conference of INSOL International, held between the 13th and 15th March 2011 and attracting a record attendance of nearly 600 delegates from all over the world. BTG Global Network was proud to be one of the four Main Sponsors, as was network member, BMC Group and also our Australian associates, PPB Advisory. It must be unique for one professional network to take three of the four main sponsorship positions at such a prestigious event, reflecting our very strong influence on thought leadership within the international insolvency and restructuring profession.

Held against the background of the unfolding natural disasters in Japan, there was a surreal atmosphere in which this terrible tragedy went almost un-mentioned, at least by Singaporean and other Asian delegates. This may have been the result of the profound shock felt by so many at the awesome power of nature to humble the human race, or maybe it reflected the stoicism and strength of character for which Asia is rightly famous.

There were 18 delegates from BTG GN members and another 11 from network associates, meaning that we provided 5% of the audience for the conference. We were delighted to host Sponsors Tables at both the opening Welcome Dinner and the farewell Gala Dinner, which provided some quality networking time for the BTG GN family.

BTG GN Chairman, Nick Hood was a speaker at a well attended and lively session on the topic of differences between restructuring systems around the world (“They Do it Differently There – Restructuring, Legislative Incentives and Disincentives”). He shared the platform with Melissa Knoll from our US joint venture, BTG Mesirow Financial Consulting, Michael Quinlan from Australian law firm Allens Arthur Robinson and The Hon. Justice Mr Geoffrey Morawetz from the Ontario Superior Court of Justice.

BTG GN is a strong supporter of INSOL International, which with over 10,000 individual members and 41 member associations is the only truly worldwide representative for the insolvency and restructuring professions. The network has sponsored every INSOL Conference since 2003.

For those wanting to know more about the conference or about INSOL International, please visit www.insol.org. The papers from the technical programme will be available shortly via their website - http://www.insol.org/page/154/insol-singapore. The necessary username and password can be obtained by emailing Jo Hancock.

Malta expected to become the main attraction for foreign investors worldwide

uat — Mon, 14 Feb 2011 15:10:11 GMT

In the years to come, Malta is predicted to be a great financial centre where multimillionaires and billionaires alike invest their money. This fact was the result of a study commissioned by Credit Suisse Research Institute. The study also identified Singapore and Panama as the next most favoured destination for investors after Malta.

The study also shows that there are approximately 1,000 people around the world who classify as billionaires – 500 in North America, 245 in Asia and 230 in Europe. Although the United States seems to be the wealthiest country in the world, Australia and Norway are both achieving rapid growth in the economy and wealth.

It states that after the agreement between the governments of Switzerland, England and Germany to charge tax on those who invest their funds in Switzerland, Malta is expected to become the most attractive jurisdiction for foreign investors worldwide because of the country's strong financial system.

An interesting fact arising from the study is that many of the people in the upper class of Europe do not live the luxurious life we see in films. This is because the European philosophy is that to live a comfortable life you should work hard for your money and save for any future requirements – the same philosophy as in the Maltese islands. The value of this way of life has been demonstrated by the amount of reserves held by Maltese banks during the recent financial crisis, easing the pressure on the banking system, which experienced fewer problems than banks in other countries during this tough time.

Therefore, although facts were already enough to prove that Malta has become a prime location of investment which is also part of the European Union; this study further shows the progress of this country’s financial sector.

If you would like further information please contact jgauci@ksimalta.com or visit their website - www.ksimalta.com.

Israel / Italy cross border co-operation on Leadcom case

uat — Mon, 14 Feb 2011 14:02:30 GMT

BTG Global Network is pleased to announce yet another example of successful co-operation between two of its members.

Ofer Shapira of Shapira & Co (Israel) and Prof. Alessandro Scarso of Studio Legale PLUTA GmbH (Italy) have announced that the sale of assets of Leadcom Integrated Solutions Italy Srl (the Italian subsidiary of Leadcom group) to a group of Italian investors has been completed.

The total deal value of €2.3m represents a significant transaction in the insolvency proceedings of the Leadcom holding company in Israel.

Corporate Restructuring and Insolvency Review 2010

uat — Thu, 27 Jan 2011 09:51:45 GMT

BTG GN member from Ireland Kavanagh Fennell, have prepared in conjunction with www.insolvencyjournal.ie, a review of Corporate Restructuring and Insolvency in Ireland 2010

The review sets out key insolvency events and developments that took place in the corporate restructuring and insolvency market in 2010 as well as insolvency trends and statistics, expert comments and a look forward to what 2011 brings.

Nick Hood, BTG Global Network Executive Director also provides his expert perspective on the International Insolvency Market.

Click here to read the full review

Schemes of Arrangements in Israel

uat — Mon, 24 Jan 2011 16:33:53 GMT

By Ofer Shapira, Adv.
Shapira & Co.
www.oshapira.com

One of the significant changes in Israel's capital market and credit market between 2005 and 2008 was the dramatic increase in the extent of credit-raising through the issue of bonds, especially unsecured ones, to the public. Most of these unsecured corporate bonds were bought by public institutions, including mutual funds, pension funds, study funds, etc., which saw the bonds mainly as a tool to ensure constant interests in higher rates than government bonds.

A substantial part of the amounts raised in this way in Israel was used as "equity" in real-estate projects in other countries, particularly in Europe.

Needless to say that while the public was concentrating on those bonds as an investment vehicle, which would constantly produce income from the issuing companies, apparently it did not give enough weight to the fact that the bonds often represented debts of entities which were far from the base assets (see illustration 1).

Illustration 1 (click to open)

Also, when the business atmosphere in the countries (where the assets were) changed, the cash flow toward the issuing companies decreased or stopped and the issuing companies lost their ability to return their debts. Unfortunately the complicated structure of these concerns has put not only the issuing companies under difficulties but also put the bondholders in a delicate situation: if they initiate liquidation proceedings then in many cases specific loans in the countries can be accelerated and most chances are that the bondholders will lose all their money. If the bondholders do nothing then there is no likelihood that the issuing companies would ever be able to repay their debts.

In fact tens of companies got into such a situation, and that's how the problem became a nationwide crisis. In the peak of this bond crisis in the beginning of 2009 there were approximately 15 Billion Shekels (about 4.5 Billion US$) value of bonds that required such arrangements.

This article outlines few of the most common issues dealt with while working on such creditor's arrangements in Israel.

Priorities between different series of bonds
Many of the companies described below raised their credit in more than one series of bonds. When the issuing companies get into crisis then competition between the different series creates interesting situations.

The "easier" cases are those in which the series were issued by different companies in the group as illustrated in illustration 2. We say "easier" because under law shareholders are always subordinated to creditors of a company, so in case the assets are sold and money is paid back then apparently Series B will be fully repaid, and only then, if anything is left, the leftovers will be paid to the Parent company to be paid to its creditors, that is: Series A.

Illustration 2 (click to open)

But in practice things go different: following the reasons mentioned above, Series B bondholders are not interested in liquidation and therefore they will negotiate an arrangement with the Subsidiary. At the same time, and in order to win a better position Series A bondholders will apply for liquidation of the Parent, take over the Parent and will try to influence the scheme of arrangement negotiated by the Sub (by changing the management of the Subsidiary or otherwise) or object to the arrangement on behalf of the Parent in the course of the approval process required by law.

In one of the cases in which the shareholders objected to an arrangement, the court ruled that a scheme of arrangement would be approved despite the objection of the shareholders (Shtang case). But in few other cases, the result of the tension between the different series led to an arrangement that included the creditors of the Parent company and participation of Series A bondholders in the arrangement by receiving better values than they could get under liquidation of the group.

A more difficult question is raised when the same company issued a few series of bonds with different times of repayment as illustrated in illustration 3. In the regular course of business there is apparently no connection between the repayment of the one series and the repayment of the other. But what happens when it becomes clear that the issuing company will not be able to pay all of its debts and an arrangement is required? The question is asked because under liquidation all unsecured debts are in the same priority and enjoy the same position (pari-passu).

Illustration 3 (click to open)

Should the creditors be classified together as one group for the purpose of a scheme of arrangement? Or should every series be classified as a different group of creditors for the matter of the arrangement? In Israel, as in other countries, the approval of an arrangement requires an approval of at least the majority of the number of creditors who attend the meeting who represent at least 75% of the debt. Combining the two Series together gives the larger series more power.

In one case (Africa Israel case) the court ruled that until a company is actually under liquidation, an arrangement should reflect the different interests of each series. But there is not yet a decision or a law to decide whether different series of unsecured debts could be classified together for the sake of approving a scheme of arrangement offered be the issuing company.

Conflict of Interests between Bondholders
Another legal question is asked with respect to the procedure of approving a scheme of arrangement: What happens when an investor holds securities from both series described below? (see Illustration 4). Can he still vote in both meetings? On one hand, the voting power given to the bondholders as part of their "package of rights" is meant to allow the bondholders to reach the best decision for the group (i.e. the same series of bonds); allowing such bondholder to vote means he could use his vote to influence the decision of one meeting to the opposite interest of all other bondholders in that series. On the other hand, maybe the title in the bonds includes also a free voting power including voting in any way and for any reason, including in contrary to his group's interest.

Illustration 4 (click to open)

The case law in Israel has not yet said the last word on this issue, but at least in one of the cases the court disqualified the vote that was done under conflict of interests and approved the decision of the other bondholders disregarding the vote of the "affected" bondholders.

Anticipated Breach as a Cause for Liquidation
Two competing factors of insolvency: balance and cash flow. What happens when the two collide with each other?

What happens when a company has enough cash to temporarily go on with its business but its balance sheet shows clearly that the company will not be able to cover its debts in the future?

This is the case illustrated in illustration 5: A Company raised money in Shekels in July 2007 and used the money as equity for real estate investments in England. At that time the NIS 870M were about GBP 100M (GBP1 = NIS 8.7). By January 2009 the rate of the British Pound fell to GBP1 = NIS 5.5. The Company had gone into default with its specific lenders, and it looked like it had no source to repay the bonds.

Illustration 5 (click to open)

Can Series B apply for bankruptcy when the debt is far from being due?

In one case the court held that the company had enough time to raise more money and therefore the court refused to an insolvency motion submitted by a secured creditor (Proficiency). The court might also take into consideration the public interest of allowing the company to continue its business.

Under Israeli contract law a claim based on anticipated breach requires evidence showing clearly that the breach is clear (unlike mere suspicions of the creditor).

On the other hand – companies whose business is based on real property will find it difficult to convince the court they could find secret sources to fill in the gap of the missing finance. In many cases the bonds' terms also allow the bondholders to demand an immediate repayment in case of a material adverse change in the ability of the bondholders' ability to collect their debt. The use of such term might lead such company into liquidation or an arrangement with its bondholders.

As we see, schemes of arrangements often require a large degree of creativity and combination between law and business. No doubt that good ideas implemented successfully in schemes of arrangements in Israel could be used in other countries. Experienced insolvency practitioners are the right people to lead such arrangements everywhere.

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BGN Becomes BTG Global Network

uat — Wed, 19 Jan 2011 10:27:23 GMT

Begbies Traynor Group, the specialist professional services consultancy, today announces that the Begbies Global Network (BGN), its premier global network of professionals working with struggling or declining businesses, has changed its name to the BTG Global Network, bringing it in line with the other BTG branded services within the Group.

Nick Hood, Executive Chairman, BTG Global Network, said:

“Five years on from its foundation as BGN, BTG Global Network has become a powerhouse in international insolvency and restructuring, with close to 150 members and associates in 108 countries all around the world and a total resource of well over 8,000 professional and support staff.”

“Given the increasingly global nature of our business and growing client demands for international restructuring and insolvency expertise, we are confident that this streamlining of our corporate identity will further enhance the international profile of the BTG Global Network. Its consistency with our well known and respected Group brand will materially improve the prospects of winning major global assignments and strengthen the resonance of the brand with our important referrer base.”

BTG Global Network Member, Csaba Holdings Wins Major Municipality Insolvency in Hungary

uat — Tue, 18 Jan 2011 09:20:18 GMT

We are delighted to report that the head of one of the very first members of BTG GN, Laszlo Csia has been appointed to represent a major creditor owed over Eur2m in a ground breaking case in Hungary, the insolvency of the city of Esztergom, the largest municipality there to fail so far. We look forward to bringing you more news as this assignment progresses.

At the same time, Laszlo has had a major article of the Hungarian bankruptcy law in the authoritative business newspaper Vilaggazdasag and is also lecturing on a post graduate course for insolvency practitioners at the University of Economics about cross border insolvency. This confirms Laszlo’s position as Hungary’s leading expert on local and international insolvency issues.

BTG GN Chairman, Nick Hood commented: “We congratulate Laszlo on winning such an important assignment and on the success of his efforts to improve public awareness of insolvency issues at a time when the Hungarian economy struggles to shake off the effects of the global recession”.

BTG Global Network Continues to Grow

uat — Mon, 10 Jan 2011 12:46:30 GMT

BTG Global Network are pleased to announce the joining of a new member in Egypt.

Vision Consulting Group are a professional group of Accountants, Tax & Legal Consultants based in Cairo. During the past two decades they have acquired wide-range of experiences through serving significant number of multi-national and national companies.

For more information please contact Waleed Hilal at wh@vision-consulting-group.net or Marwah Nassar at mn@vision-group-consulting-group.net .

BTG GN Executive Chairman Nick Hood comments “We are delighted to have secured such a high quality firm as Vision Consulting Group as the BTG GN representative in the increasingly important market in Egypt, where there is much work to do in restructuring key sectors, notably leisure and tourism which has been adversely affected by the global recession. This is also a jurisdiction where a number of key network clients, such as Barclays and The African Development Bank are active.

I am sure you will all join me in extending a warm welcome to our newest addition to the BTG GN family.”