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Book Review: Restructuring and Workouts: Strategies for Maximising Value , edited by Ben Larkin. (Global Law Publishing, London, 2nd ed., 2013)

Book Review: Restructuring and Workouts: Strategies for Maximising Value , edited by Ben Larkin.... BOOK REVIEW Ben Larkin (ed.), Restructuring and Workouts: Strategies for Maximising Value, Global Law Publishing, London, 2nd ed., 2013, 280 pp. BY BOB WESSELS, EMERITUS PROFESSOR OF INTERNATIONAL INSOLVENCY LAW, UNIVERSITY OF LEIDEN SCHOOL OF LAW* The first edition of the book Restructuring and Workouts: Strategies for Maximising Value, I have reviewed in European Company Law 6, No. 3 (2009), pp. 145­146. Here follow some words on the second edition. The editor, Ben Larkin, has early this year switched firm and is now a partner at the global law firm Jones Day. The second edition is timely as Europe is nearing the end of a period of some six years of economic downturn, during which many countries have enacted (or are considering to enact) new legislation in which the key word is: rescue of viable business. Compared to the first edition, some changes have been made, e.g., chapters on insolvency and rescue law in Russia and Spain are new, whilst ­ remarkably ­ the US chapter has not found its way to the second edition. Let me just highlight some of the contributions. In the article `The restructuring and workout environment in Europe', Gudgeon and Joshi present a number of recent trends, such as the growing diversity in creditors interests, as hedge funds and purchasers of claims indeed have different interests compared to unsecured creditors. Another aspect that is touched upon is the growing importance of out-of-court consensual restructurings. Insolvency lawyers indeed should develop their skills in contract negotiating outside the shadow of insolvency law. `Insolvency, restructuring and economic development : the World Bank Group and insolvency systems' from Martinez, Menezes and Uttamchandani, demonstrate that specific research indeed shows that between 2008 and 2011 sixty reforms of insolvency systems worldwide (increasing gradually year-on-year) have/are taking place. They provide seven lessons from experience in developing and transition countries. They also submit, quite rightly: Although the concept of corporate rescue as means of maximising enterprise value and preserving jobs is gaining support among industrial nations and in developing countries, many jurisdictions continue to rely on outmoded laws to address the problems of modern corporate financial distress and insolvency. . . . Today's environment requires statutes that can flexibly accommodate a wide range of business solutions that make economic sense and rationalise debt to actual enterprise value. Moreover, the spreading of constituent elements on an insolvency system across numerous laws, rather than in a single code, inhibits certainty and transparency. In their suggestions to go forward, these authors too stress the importance of our- of-court negotiations as well as the introduction of `innovative out-of-court tools', such as a pre-insolvency mediation regime (such as mandate ad hoc in France) or the introduction of specialized courts or debt tribunals. In other chapters, obvious topics are explained such as Debt-for-equity swaps (Clowry), Workouts and restructuring: pre-packs at an operational level (Shaw), Valuation of distressed businesses (Beveridge, Hemming, Smith), Schemes of arrangement (Augustin, Batten) and Workouts of structured vehicles (Bowers, Soden, Wormleighton). An interesting topic underlines the skills practitioners need to succeed in the area of preinsolvency. In `Stakeholder management', Fietta provides an alternative perspective on the restructuring process: how to deal with all these diverging interests, or: how to find common ground between stakeholders with conflicting agendas. From the perspective of the debtorcompany, a restructuring process then is organized in five phases. This managerial type of approach is an interesting read for those with a legal background. Several chapters in the book provide practical tools to maximize value in restructuring situations, and the market will still undoubtedly provide opportunities for their use. Internet: http://www.bobwessels.nl; e-mail: bwessels@bobwessels.nl. `Book Review'. European Company Law 11, no. 4 (2014): 223­224. © 2014 Kluwer Law International BV, The Netherlands http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Company Law Kluwer Law International

Book Review: Restructuring and Workouts: Strategies for Maximising Value , edited by Ben Larkin. (Global Law Publishing, London, 2nd ed., 2013)

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European Company Law , Volume 11 (4) – Aug 1, 2014
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Kluwer Law International
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1572-4999
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Abstract

BOOK REVIEW Ben Larkin (ed.), Restructuring and Workouts: Strategies for Maximising Value, Global Law Publishing, London, 2nd ed., 2013, 280 pp. BY BOB WESSELS, EMERITUS PROFESSOR OF INTERNATIONAL INSOLVENCY LAW, UNIVERSITY OF LEIDEN SCHOOL OF LAW* The first edition of the book Restructuring and Workouts: Strategies for Maximising Value, I have reviewed in European Company Law 6, No. 3 (2009), pp. 145­146. Here follow some words on the second edition. The editor, Ben Larkin, has early this year switched firm and is now a partner at the global law firm Jones Day. The second edition is timely as Europe is nearing the end of a period of some six years of economic downturn, during which many countries have enacted (or are considering to enact) new legislation in which the key word is: rescue of viable business. Compared to the first edition, some changes have been made, e.g., chapters on insolvency and rescue law in Russia and Spain are new, whilst ­ remarkably ­ the US chapter has not found its way to the second edition. Let me just highlight some of the contributions. In the article `The restructuring and workout environment in Europe', Gudgeon and Joshi present a number of recent trends, such as the growing diversity in creditors interests, as hedge funds and purchasers of claims indeed have different interests compared to unsecured creditors. Another aspect that is touched upon is the growing importance of out-of-court consensual restructurings. Insolvency lawyers indeed should develop their skills in contract negotiating outside the shadow of insolvency law. `Insolvency, restructuring and economic development : the World Bank Group and insolvency systems' from Martinez, Menezes and Uttamchandani, demonstrate that specific research indeed shows that between 2008 and 2011 sixty reforms of insolvency systems worldwide (increasing gradually year-on-year) have/are taking place. They provide seven lessons from experience in developing and transition countries. They also submit, quite rightly: Although the concept of corporate rescue as means of maximising enterprise value and preserving jobs is gaining support among industrial nations and in developing countries, many jurisdictions continue to rely on outmoded laws to address the problems of modern corporate financial distress and insolvency. . . . Today's environment requires statutes that can flexibly accommodate a wide range of business solutions that make economic sense and rationalise debt to actual enterprise value. Moreover, the spreading of constituent elements on an insolvency system across numerous laws, rather than in a single code, inhibits certainty and transparency. In their suggestions to go forward, these authors too stress the importance of our- of-court negotiations as well as the introduction of `innovative out-of-court tools', such as a pre-insolvency mediation regime (such as mandate ad hoc in France) or the introduction of specialized courts or debt tribunals. In other chapters, obvious topics are explained such as Debt-for-equity swaps (Clowry), Workouts and restructuring: pre-packs at an operational level (Shaw), Valuation of distressed businesses (Beveridge, Hemming, Smith), Schemes of arrangement (Augustin, Batten) and Workouts of structured vehicles (Bowers, Soden, Wormleighton). An interesting topic underlines the skills practitioners need to succeed in the area of preinsolvency. In `Stakeholder management', Fietta provides an alternative perspective on the restructuring process: how to deal with all these diverging interests, or: how to find common ground between stakeholders with conflicting agendas. From the perspective of the debtorcompany, a restructuring process then is organized in five phases. This managerial type of approach is an interesting read for those with a legal background. Several chapters in the book provide practical tools to maximize value in restructuring situations, and the market will still undoubtedly provide opportunities for their use. Internet: http://www.bobwessels.nl; e-mail: bwessels@bobwessels.nl. `Book Review'. European Company Law 11, no. 4 (2014): 223­224. © 2014 Kluwer Law International BV, The Netherlands

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European Company Law – Kluwer Law International

Published: Aug 1, 2014

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