Weil, Gotshal & Manges LLP (JD Supra United Kingdom)
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Cross-Class Cram Down in UK Restructuring Plans: Virgin Active
Mr Justice Snowden’s recent judgment sanctioning the Virgin Active restructuring plans is significant for several reasons. Not only is it the first judgment to consider the cram down power of the 2006 Companies Act, but it is only the third instance that the cross-class cram down mechanism has been used. It is also the first time it has been used to cram down classes of dissenting landlords.
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SPACS Come to the U.K.
THE UNITED KINGDOM’S FINANCIAL REGULATOR, THE FINANCIAL CONDUCT AUTHORITY (FCA), RELEASED A CONSULTATION PAPER OUTLINING PROPOSED AMENDMENTS TO ITS LISTING RULES DESIGNED TO ENCOURAGE SPACS TO OBTAIN A STANDARD LISTING ON THE LONDON STOCK EXCHANGE’S MAIN MARKET. The amendments modify some aspects of the FCA’s Listing Rules that have made it practically impossible for SPACs to list in London...
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The Hill Review: key recommendations to reform the UK listing regime
[co-author: Amy Waddington] ON 3 MARCH 2021, THE UK LISTING REVIEW, CHAIRED BY LORD HILL, PUBLISHED ITS REPORT. THE REVIEW WAS LAUNCHED IN NOVEMBER 2020 TO LOOK AT POSSIBLE REFORMS OF THE UK LISTING REGIME. THE REPORT RECOMMENDS SEVERAL CHANGES TO THE CURRENT LISTING REGIME AND A FUNDAMENTAL REVIEW OF THE PROSPECTUS REGIME. The UK Listing Review was launched by the Chancellor as part of a...
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DeepOcean: The UK’s First Cross Class Cram Down Restructuring Plan
On 28 January, the English High Court handed down the first ever judgment sanctioning a restructuring plan under Part 26A of the Companies Act 2006 (“CA 2006”) (“Plan”) invoking the new cross class cram down procedure introduced into UK law in June 2020. Trower J’s judgment in the DeepOcean restructuring has been highly anticipated, and is the first time the court has set out the matters it...
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DAC6: Significantly Limited Scope in the UK post-Brexit
A piece of good news on which to end the year and start the next – the UK Government has published regulations dramatically reducing the scope of DAC6 (the EU Mandatory Disclosure Regime) in the UK as part of the Brexit deal package/post transition arrangements. In short, the effect seems to be that DAC6 will, from today, mostly cease to apply in the UK. This is a surprising development.
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Brexit & Tax Treaties: U.K. Investors May Lose Treaty Benefits With Respect to U.S. Investments
The withdrawal of the United Kingdom (“U.K.”) from the European Union (“E.U.”) may impact certain cross-border organizational structures. We have previously considered some of those U.K. tax impacts in our post “Brexit and Tax: An Uncertain Future”. The points considered in that previous post continue to be relevant to cross-border structures involving the U.K. and some, including, for instance,...
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National Security and Investment Bill - November 2020
ON 11 NOVEMBER 2020 THE UK GOVERNMENT PUBLISHED ITS NATIONAL SECURITY AND INVESTMENT BILL. IF THE BILL IS ENACTED AND COMES INTO FORCE IN SUBSTANTIALLY ITS CURRENT FORM (WHICH SEEMS VERY LIKELY), IT WILL PROVIDE THE GOVERNMENT WITH WIDE-RANGING POWERS TO INTERVENE IN TRANSACTIONS ON NATIONAL SECURITY GROUNDS AND, IN RELATION TO CERTAIN KEY SECTORS, WILL REQUIRE MANDATORY PRE-CLEARANCE. The...
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Paragon Offshore: Judgment on Challenge to 2017 Restructuring and the Limits of the Rule 12.59 Review Jurisdiction
The Insolvency and Companies Court in London handed down judgment on Monday, 19 October 2020 rejecting a shareholder challenge to the 2017 restructuring of Paragon Offshore plc (in liquidation) (the “Company”). The judgment gives helpful guidance on the approach taken by insolvency courts to reviewing, rescinding or varying their orders under rule 12.59 of The Insolvency (England and Wales)...
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Extension on the Temporary Restrictions on Statutory Demands and Winding Up and Other Measures Under the Corporate Insolvency and Governance Act 2020
Yesterday the Department for Business, Energy and Industrial Strategy announced that certain temporary measures put in place under the Corporate Insolvency and Governance Act 2020 (“CIGA”), which came into force on 26 June, will be extended. The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 were laid before the UK Parliament...
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Mini-Budget 2020: Stamp Duty and VAT Announcements
The UK Chancellor announced a number of measures today (8 July 2020) to boost the economy in the wake of the coronavirus lockdown. These included two tax cuts to VAT and stamp duty in an attempt to get the hospitality and housing sectors “bustling again”.
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Landmark Lehman Subordinated Debt Ruling
The High Court in London gave judgment on Friday, 3 July 2020 on the relative ranking of over $10 billion of subordinated liabilities in the administrations of two entities in the Lehman Brothers group. The judgment covers a series of important issues for restructurings and insolvencies, including: the provability and relative ranking of regulatory subordinated debts, the effect of partial...
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The New Restructuring Plan – In Depth
The new UK legislation for companies in financial difficulty represents a fundamental shift in approach to restructuring in Europe and adds an important new tool to the UK restructuring framework. The availability of a plan proposed under the new Part 26A of the Companies Act 2006 (a “Restructuring Plan”) will undoubtedly change how many distressed companies seek to address their financial...
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UK Corporate Insolvency and Governance Bill: Highlights
On Wednesday 20 May, the Government published the highly anticipated Corporate Insolvency and Governance Bill (the “CIGB”). It legislates for the landmark changes to the UK’s corporate insolvency regime and the temporary suspension of the statutory provisions on wrongful trading announced by the Business Secretary on 28 March 2020 (see Weil’s European Restructuring Watch update of 30 March 2020).
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Premier Oil Scheme – Scottish Sanction Judgment
On Wednesday 29 April the Outer House of the Court of Session in Edinburgh issued an opinion sanctioning two schemes of arrangement proposed by Premier Oil Plc and Premier Oil UK Limited (together, Premier Oil) (the Schemes). The Court addressed multiple grounds of challenge and did so without hearing live evidence, despite disputes of fact between the parties. The purpose of the proposed...
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COVID-19 Impact on Corporate Tax Residence and Substance: HMRC Issues Guidance
Subsequent to our alert on the possible impact of COVID-19 on UK corporate tax residence and substance, on 8 April 2020 the UK tax authority, HM Revenue & Customs, (“HMRC”) published guidance on its approach to corporate tax residence and permanent establishments (“PE”) in light of the COVID-19 pandemic (the “Guidance”) (see INTM120185 / INTM261010). In the Guidance HMRC specifically...
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COVID-19 Alert: Impact on Corporate Tax Residence and Substance: Investment Funds and Multinationals
Snapshot - Travel restrictions and social distancing measures imposed as a result of the crisis mean that non-UK companies are at risk of becoming tax resident in the UK or breaching substance requirements if board meetings are held or decisions taken without careful forethought. This could have long term consequences. - Similar issues were encountered, albeit on a significantly smaller...
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Brave New World: HMRC Implements Temporary Electronic Submission for Stamp Duty Applications
On 25 March 2020, HMRC announced that stock transfer forms and other transfer instruments should no longer be posted to the HMRC Stamp Office, due to COVID-19 measures. Effective immediately, all documents for stamping should be submitted electronically, together with scans of the instruments to be stamped and details of the transaction and electronic payment. This includes stock transfer forms,
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Coronavirus (COVID-19): UK Tax-Related Considerations for Business
As the global outbreak of the novel coronavirus pandemic (COVID-19) continues, businesses should consider both the risk of unexpected tax consequences from disruptions and opportunities to avail of government support for business implemented through the tax system. Emergency measures to address both the spread and the economic consequences are rapidly evolving. Extensive tax reliefs and grants...
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Cryptoassets: The UK tax net widens
HMRC have recently revised their guidance on the UK tax treatment of cryptocurrencies for individuals; specifically, in relation to “exchange tokens” held by individuals who are not domiciled in the UK for UK tax purposes. For these purposes, HMRC use the term “exchange tokens” to include more familiar cryptocurrencies such as Bitcoin, as well as other “tokens” which are intended to be used as a...
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CMA Signals More Interventionist Approach to UK Competition Enforcement
As the UK’s expected departure from the European Union approaches – currently scheduled for October 31 – the UK Competition and Markets Authority (CMA) has been developing a tougher and more interventionist approach to competition enforcement. Low thresholds for merger review likely to capture more transactions - The CMA’s thresholds for review are set relatively low and enable it to...
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Entrepreneurs’ Relief – FA 2019 Changes
This year’s Finance Act consolidated various changes to the Entrepreneurs’ Relief (“ER”) regime. There are two key changes that may be of particular relevance to corporate acquisitions: 1. new (additional) economic ownership tests that must be satisfied in order for an individual holding shares in a company to benefit from ER; and 2. a new option to elect to crystallise a gain, and claim ER
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Changing the Insolvency Waterfall – HMRC to Become a Preferential Creditor Again
The recent budget flagged the re-introduction of preferential creditor status for the UK tax authority (HMRC) in insolvencies in certain limited circumstances.
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Ordinary share capital: HMRC shares its views
For UK tax purposes, it is often necessary to determine whether shares constitute ordinary share capital (OSC). For instance, this might be necessary when considering, amongst others...