Investing in Distressed Debt in Europe, Second Edition

Throughout the COVID-19 pandemic, opportunities for distressed-debt investors continued to appear in the European market despite high numbers of state-backed loans and financial injections from EU member states. Such opportunities are set to increase significantly as this financial assistance is gradually withdrawn, and especially in light of the EU Directive 1023/2019 on Preventive Restructuring (the 'Restructuring Directive'), which gives a more central role to distressed creditors who will benefit from more flexible pre-insolvency instruments with a broader scope. This second edition, co-published with TMA Europe, provides an overview of the European distressed-debt market and covers, among other topics:non-performing loans;direct lending; andrestructuring and workouts. It explores these subjects from a pan-European viewpoint and includes a comprehensive analysis of how the Restructuring Directive has been implemented. Chapters have been written by leading experts in the field, supported by consulting editors Ignacio Buil Aldana and Patricia Alvarez Alonso, partners in the restructuring, insolvency and special situations team at the London office of Spanish law firm Cuatrecasas. Whether you are a lawyer in private practice or in-house, a financial adviser or an investor, this practical guide will provide you with invaluable insight and a better understanding of the commercial and legal complexities involved in the European distressed-debt market.

Throughout the COVID-19 pandemic, opportunities for distressed-debt investors continued to appear in the European market despite high numbers of state-backed loans and financial injections from EU member states. Such opportunities are set to increase significantly as this financial assistance is gradually withdrawn, and especially in light of the EU Directive 1023/2019 on Preventive Restructuring (the ‘Restructuring Directive’), which gives a more central role to distressed creditors who will benefit from more flexible pre-insolvency instruments with a broader scope.This second edition, co-published with TMA Europe, provides an overview of the European distressed-debt market and covers, among other topics:non-performing loans;direct lending; andrestructuring and workouts.It explores these subjects from a pan-European viewpoint and includes a comprehensive analysis of how the Restructuring Directive has been implemented. Chapters have been written by leading experts in the field, supported by consulting editors Ignacio Buil Aldana and Patricia Alvarez Alonso, partners in the restructuring, insolvency and special situations team at the London office of Spanish law firm Cuatrecasas.Whether you are a lawyer in private practice or in-house, a financial adviser or an investor, this practical guide will provide you with invaluable insight and a better understanding of the commercial and legal complexities involved in the European distressed-debt market.

ForewordsEva Ringelspacher 7President, TMA EuropeAlan Tilley 8BM&T European Restructuring SolutionsPreface 11Ignacio Buil AldanaPatricia Álvarez AlonsoCuatrecasasPart I. Acquisition of distressed debtAnatomy of an LMA distressed trade transaction and transfer mechanisms under English law 15Elizabeth BilbaoMandel, Katz & Brosnan LLPOverview of distressed trading in selected jurisdictions 35FranceJérémie BismuthNadia HaddadFrançois LépanyAntoine TexierGide Loyrette NouelGermanyDaniel HiemerAlexander MH LängsfeldSacha LürkenKirkland & Ellis International LLPItalyGregorio ConsoliFederica ScialpiChiomentiSpainBeatriz CausapéAdriana SerraCuatrecasasPart II. The European non-performing loan marketThe European non-performing loan market and its policy drivers 65Fernando Mínguez HernándezCuatrecasasAnatomy of the non-performing loan and real-estate owned portfolio market in Spain 81Iñigo Rubio LasarteCuatrecasasPart III. Direct lendingDirect lending – market trends 95Mark FineMcDermott Will & Emery UK LLPLegal structuring of direct lending deals in selected jurisdictionsEngland and Wales 109Elisabeth BaltayAlex GriffithRafael SerranoProskauerFrance 123Jérémie BismuthJean-Gabriel FlandroisNadia HaddadAntoine TexierAkim ZellamiGide Loyrette NouelGermany 133Daniel HeimerAlexander MH LängsfeldSacha LürkenKirkland & Ellis International LLPItaly 145Giorgio CappelliMaurizio FrescaAndrea MartinoAlessandro PappadàMatteo VenutaChiomentiSpain 151Patricia Álvarez AlonsoMaría LéridaCuatrecasasPart IV. Restructuring and workoutsDevelopments in the European legal framework for restructuringFrance 165Jérémie BismuthJean-Gabriel FlandroisNadia HaddadFrançois LépanyAntoine TexierGide Loyrette NouelGermany 191Sacha LürkenKirkland & Ellis International LLPItaly 221Giulia BattagliaAntonio TavellaChiomentiRestructuring plans in Spain 245Ignacio Buil AldanaFrancisco Marzá TornelCuatrecasasThe sale of business units in Spain 261Andrea PerellóFedra ValenciaCuatrecasasRestructuring plans in the United Kingdom 271Daniel StathisKate StephensonKirkland & Ellis International LLPPart V. TaxationStructuring the acquisition and disposal of distressed debt 289Javier CalleRebeca RodríguezCuatrecasasDavid BurkeWilliam FogartyMaples and Calder (Ireland) LLPAbout the authors 311About Globe Law and Business 323