Insolvency, security and restructuring

Introduction

The law on pledges and lien, as well as the legal rules relating to insolvency, are central elements in any economic transaction of significance. Being familiar with these rules is crucially important when determining how to finance acquisitions, and when attempting to avoid bankruptcy.

Bankruptcy involves an ordered settlement of the obligations of an insolvent debtor under the auspices of public institutions. An alternative for creditors can be to let an insolvent or financially distressed company continue operations. Normally, this requires renegotiating the debt portfolio, so called restructuring. This involves a multitude of contractual issues concerning guarantees and pledges, most often of trans-national nature. Solid competence within this field therefore involves knowledge of comparative law.

Course content

1. Law on mortgages

• The principle of legality
• The character of concept of a pledge: Personal credit and immovable credit

• The system of the law
• Contractual security, legal security
• Contractual security in
  • Immovable property
  • Movables
  • Claims
  • Financial instruments
  • Immaterial rights
• Priority issues
• Loyality beteween security holders?
• Realisation of security
• Lex situs

2. Bankruptcy

• The concept of insolvency and the system of the act
• The right of attachment according to the Act relating to creditors rights to satisfaction of claims
• The scope of the right of attachment and its limitation
• The right of attachment in company matters
• The relationship with the Enforcement Act
• The status of contracts in bankruptcy
• Set-off
• Dividends
• Voiding of transactions

3. Restructuring

• The concept of restructuring
• The debt situation, valuation
• Agreements and majority requirements
• Creditor landscape: Banks and bondholders
  • Bondholders
    • Agreed process
    • Security
    • Nordic trustee
    • Negotiations
    • Bondholder meeting and voting rules
    •  
  • Banks
    • Pledges
    • Syndicates
    • Capital requirement

       

• Chapter 11 and scheme of arrangements
• Venue shopping: Need for Norwegian rules?
• Stock exchange and securities rules
  • Market based recapitalization
  • Informational duties to the Stock Exchange
     

4. Selected topics

• Banks as creditors/holders of security and debtors/pledgers
• Consumer credit, mortgages and the social aspect of credit and recovery