Sponsors

1. INSOL Europe would like to thank the following conference sponsor for their generous support: Sponsors INSOL Europe would also like to thank the following organisation for their support: www.tmpartner.de ConsiglioNazionaledei Dottori Commercialisti e degli EspertiContabili www.cndcec.it

2. Discussion on Chapter VI (European Rescue Plan) Moderator: Daniel Fritz, HERMANN RWS, Frankfurt am Main Anna Maria Pukszto, Salans, Warsaw Jane Marshall, McCann FitzGerald Solicitors, Dublin Mark Broude, Latham & Watkins, New York

3. European Rescue Plan Ana Maria Pukszto Salans Warsaw

4. Rationale for proposing the European Rescue Plan effective restructuring of corporate groups calls for cross-border instruments and a uniform substantive legal framework for the contents of the restructuring (rescue) plan and procedural issues

5. Presentation of the European Rescue Plan • basic distinctive features • applicable law • procedure for the proposal, approval and confirmation of the European Rescue Plan

6. The European Rescue Plan (Plan) – basic distinctive features • personal scope: the integrated restructuring instrument encompassing at least two group companies, as defined in Art. 2 (k) of the draft revised EIR proposed by INSOL Europe (Proposed EIR) • substantive scope: wide array of mechanisms, including debt restructuring, liquidation of assets and changes in the sphere of corporate rights (e.g., share capital and rights attached to the shares) • forum: adopted in themain group proceedings opened pursuant to Art. 43 of the Proposed EIR

7. Personal scope of the Plan (Art. 49.1 of the Proposed EIR) • at least two group companies, as defined in Art. 2 (k) of the Proposed EIR: • a parent company (as defined in Art. 2 (l) of the Proposed EIR) and at least one subsidiary (as defined Art. 2 (m) of the Proposed EIR) or at least two subsidiaries • whose insolvency proceedings (as defined in Art. 2 (b) of the Proposed EIR and listed in Annex A thereto) have been opened

8. Substantive scope (Art. 50 of the Proposed EIR) • open list of provisions of the Plan - wide array of mechanisms allowing for debt restructuring, liquidation of assets and group structure optimization: • typical debt restructuring provisions (e.g. waiver of claims, installments, payment rescheduling) • liquidation of assets (divestment of the business) • transfer of business • changes in the sphere of corporate rights (e.g. share capital modifications, cancellation of rights attached to the shares) • modification or termination of existing legal transactions and rights (e.g. cancellationof security rights, termination of agreements)

9. Forum (Art. 47.1 and 2 of the Proposed EIR) • the court that opened the maingroup proceedings: • the opening of themain group proceedings as a prerequisite for the conduct of proceedings related to the acceptance and confirmation • jurisdiction to open themaingroup proceedings – the court of the member state where the COMI of the ultimate parent company is located (art. 43 of the Proposed EIR)

10. Applicable law • direct application of the Proposed EIR (Art. 47 and subsequent) setting forhthe legal framework for the Plan • law of the member state in which the main group proceedings were opened – selected procedural and substantive issues, e.g.: • convocation of creditors and shareholders, the filing of claims and the order of the acceptance hearing (Art. 52 of the Proposed EIR) • appeal proceedings related to the judgment on the confirmation of the Plan (Art. 56 of the Proposed EIR) • consequences of any failure to observe the provisions of the Plan (Art. 57 of the Proposed EIR)

11. Procedure – milestones • the filing of the Plan • the acceptance hearing • recognition of creditors and determination of class schedule • voting on the plan • confirmation of the Plan

12. The filing of the Plan (Art. 47 of the Proposed EIR) • the Plan may be proposed only atthe level of the ultimate parent company by: • the liquidator of the group • the ultimate parent company (with the request to open insolvency proceedings or pending opening proceedings) • the Plan should be accompanied by: • a draft class schedule placing all known claims in classes • a draft information memorandum to the creditors and “independent” shareholders

13. The setting of the acceptance hearing (Art. 51 of the Proposed EIR) • the court sets the date of the acceptance hearing if it finds the information memorandum adequate • the court convenes creditors and shareholders of group companies included in the Plan and provides them with the information memorandum and class schedule • procedure for filing claims by creditors whose claims were not listed in the class schedule (Art. 52 of the Proposed EIR)?

14. The acceptance hearing (Art. 53 of the Proposed EIR) – in preparation for the voting • the exercise of the right to dispute claims – entitled parties (stakeholders): • companies included in the Plan and their liquidators • the ultimate parent and its liquidator • each “independent” shareholder of any of the company included in the Plan • each creditor • hearing of the creditors and shareholders; • decision of the court on the disputed claims; • establishment of the class schedule for the purposes of the voting.

15. The acceptance hearing (Art. 53 of the Proposed EIR) – voting on the Plan • the classes of creditors who do receive or retain any value under the Plan take part in the voting • the classes of creditors who are not impaired or who receive or retain no value under the Plan are excluded from the voting • majority: the majority of creditors representing in the given class two thirds of the amount of claims • all classes must accept the Plan – if a class dissents the cram-down is available

16. The objection proceedings and confirmation of the Plan (Art. 55 of the Proposed EIR) • the stakeholders (a creditor, an “independent” shareholder, a liquidator of the ultimate parent or the company included in the Plan) may object to the Plan; • the court will confirm the Plan if: •  no stakeholder objected to the Plan • after the hearing the objections are found to be unjustified • the court will not confirm the Plan if: •  the Plan unfairly favors one or more creditors or shareholders • the junior creditor (shareholder) receives any value if, under the Plan, the senior creditor(shareholder) receives no value • the objecting stakeholder will obtain less value than in the absence of the Plan • there is insufficient certainty that the Plan can and will be implemented

17. The European Rescue PlanA Practitioner’s Issues Jane Marshall McCann FitzGerald Solicitors Dublin

18. The European Rescue Plan • Definition of ultimate parent • Mix of Procedures • Timing to start and end • Resumption of local procedures • Fees and expenses

19. Ultimate Parent • Groups with no UP • Need to broaden definition

20. Australia Cayman Islands Cayman Islands Australia Cayman Islands UK Luxembourg Ireland Ireland Delaware Ireland Ireland

21. Australia Cayman Islands Cayman Islands Australia Cayman Islands UK Luxembourg Ireland Ireland Ireland Ireland

22. Australia Cayman Islands Cayman Islands Australia Cayman Islands Delaware

23. Local Procedures • Unwanted local procedures • Article 33 stay of local procedures • In whole or in part • Continuing trading • 3 month initial stay • Discretion of local court

24. Timing • Timing to start • Uncertainty for subsidiary procedures • Multiple court hearings • Timeframe for appeals • Timing to finish – discretion of local courts under article 33

25. Resumption of Local Procedures • What happens locally if plan succeeds? • Plan implemented locally • What happens locally if plan fails? • Can a local rescue procedure resume?

26. Fees and Expenses • Fees and expenses included in the plan • Variety of local norms on fees • Grounds to object to plan • Source of fees if plan fails

27. Recommendations • Amend definition of Ultimate Parent • Give UP court control over timing • Provide for the source of fees

28. Discussion on Chapter VI (European Rescue Plan) Mark Broude Latham & Watkins New York

29. Questions from the floor