The book with this title, shortly introduced here, is a remarkable contribution to the understanding of large cross-border restructuring and insolvency cases. No doubt it will be a valuable tool for experts in this area, not only for the topics covered as well as for the colleagues of the authors delivering it. Its background lies in the International Insolvency Institute (iii), which itself started in 2000. III established, in 2012, a NextGen Leadership Program. It’s aim was to create an engaging, informative, and valuable environment for younger professionals and academics in the field of insolvency and restructuring. The program would provide carefully (by III members) selected, outstanding young professionals to meet with a large group of the most experienced professionals in the world in the insolvency area, ie the members of the III. NextGens were seen (and recently in June 2023 at III 23rd annual conference in Amsterdam have presented themselves) as the best and the brightest younger insolvency practitioners and academics in the world. Just for sake of history: my presentation at the inaugural NextGen meeting in 2012 was titled ‘Is the European Insolvency Regulation Ready for a Cross-border Rescue Culture?’. The first traces of harmonising European insolvency law were touched upon, which resulted in a very vivid debate, with active and smart participants, in an engaging location (Court de Cassation, Paris).
With this book, the NextGens (currently some 180 active members) mark their 10th anniversary and they do so with a remembrance of thirteen iconic international insolvency cases that has marked the insolvency practice and five ‘key developments and emerging themes’ in different regions in the world: Europe, US, UK, Latin America and Asia. Where the past decade has witnessed important developments in international insolvency law and influential cross-border restructurings, the editors wish to provide a deeper understanding of these developments and underlying cases. And that’s what they exactly do.
The case studies selected provide insights in various practical elements of modern-day international insolvency law. The first case presented is Nortel. Canadian Judge Newbould (who sat on the case) writes about the joint trial held simultaneously in Toronto, Ontario and Wilmington, Delaware, stating that the judges ‘shall be entitled to communicate with each other during or after any joint hearing, with or without counsel present, for the purposes of (1) determining whether consistent rulings can be made by both Courts; (2) coordinating the terms upon of the Courts’ respective rulings; and (3) addressing any other procedural or administrative matters.’ He goes on to explain ‘… how both judges have communicated with each other in accordance with the Protocol with a view to determining whether consistent rulings can be made by both Courts’. This is all very instructive for judges of European courts, still rather timid is playing an active role in cross-border cases. The total costs of the Nortel saga exceeded US$2 billion. The picture that follows is apt. He then shows a Dutch tile, with an image of a cow being pulled by a jack/farmer by the horns on one side and by a jack/farmer by the tail on the other side. In the middle under the cow is a lawyer milking the cow. The tile says (in Dutch): ‘Die pleit om een koe geeft er een toe,’ and Newbould, rightly concludes: ‘Or, how creditors fight over the cow and the professionals milk it! In the Dutch culture a traditional well know antique tile wisdom (‘tegeltjeswijsheid’)!
Other cases are displayed with just as much detail: Agrokor (including advisors from Croatia, Germany, UK and the Netherlands), Abengoa, Noble Group, Stoneway Capital, Vitro (Mexico-US controversies), Virgin UK and Australia (Virgin Atlantic, the first ever use of the UK Part 26A restructuring plan procedure), LATAM (which included ADR-procedures and a four courts cross-border protocol), Aero, Constellation (including an interesting COMI analysis and interpretation) and Steinhoff.
The descriptions of these cases are extensive, with diagrams or corporate structure charts, including involved jurisdictions, pre- and post-restructuring corporate structure, background, operational or financial troubles, first day relief measures. The specific jargon, legal expression (including the obvious abbreviations) is explained with verve. Most also offer an insight into the underlying strategy of a debtor or other parties involved. The coordination of legal actions and the meticulous planning to be followed also make some cases a page-turner. One or more of the authors in such a case was clearly involved. Its presentation is fairly accurate, which is no sinecure for large cases (formerly: reams of paper, now: many data files). Some cases are still hot, as they are yet unresolved. In all, the authors give the designation case study a new meaning.
The second part of the book then provides an overview of key developments and emerging themes in insolvency law around the world. The authors for the chapter on Europe they bow their weary heads, where the European Commission with its proposal of December 2022 regarding harmonisation of certain elements of member states’ national insolvency law has not given itself time to perform thorough and in-depth study and analysis. They cross their fingers, hoping that harmonisations do not lead to a deterioration of existing systems, rather than a step in the direction of furthering a rescue culture. Other geographic areas are described. The US (signalling the rise of Ad Hoc Creditors’ Committees and discussing the ‘DIP with Equity Features’), UK (struggling, for instance, with imposing modifications to executory contracts and unexpired leases on dissenting creditors and first signs of unaligned inconsistencies between procedures achieving the same objective, Latin America (covering Argentina, Brazil, Colombia, Mexico and Venezuela), and Asia (China, Hong Kong, Japan and Singapore).
I consider the book an asset, especially for the (coming) specialist lawyer, who also gets the opportunity of his law firm to study these cases, for judges to learn from the carefully planned and applied steps in a rather knotty restructuring and for academics, who only but can admire the tension that (teamwork in) practice must produce to bring complex matters to a successful conclusion. In a next edition (III and NextGen celebrating their 25th and 12.5 years of existence?) it would be welcome how the authors / editors can discern trends and developments in these large cases. These would certainly be of use to inform and alert policymakers and legislators.
Sebastiaan van den Berg, Lynette Janssen, Iván J. Romo, Cross Border Restructuring & Insolvency 2012-2022, series Law of Business and Finance, Vol. 24, Wolters Kluwer 2023. ISBN 9789013173062.
Note: this book I received free of charge from the publisher with the request to announce it or to review it on my blog at www.bobwessels.nl.