Restructuring & Insolvency

De Brauw advised Unigel on its USD 860 million reorganisation. Due to the reorganisation, the Unigel Group's leverage reduced by approximately 50% and certain creditors acquired 50% of the equity interests in the Unigel Group.

De Brauw advises Hefei Gotion on its investment agreement with Ebusco N.V., as part of Ebusco N.V.'s rights offering.

De Brauw Blackstone Westbroek advises on the successful restructuring of HEMA's capital structure. De Brauw advised HEMA on the implementation of a complex and multi-jurisdictional debt restructuring and recapitalisation process. This process was successfully completed on 19 October 2020. As a result, HEMA's existing bond debt of €750 million was more than halved to €300 million and its liquidity position greatly improved with an additional bond financing of €42 million. With a solid balance sheet and a profitable operation, HEMA can now fully concentrate on its future. De Brauw and HEMA have been working on the restructuring of HEMA's capital structure since 2019. On 15 June 2020, after extensive negotiations, HEMA reached an agreement with its banks and a group of noteholders holding approximately 62% of the €600 million senior secured notes and more than 50% of the €150 million senior notes, to reduce its debt in a controlled manner to safeguard the future of the company. The restructuring was implemented through court proceedings in three jurisdictions: a scheme of arrangement in England, a Chapter 15 proceeding in the United States and security enforcement proceedings in the Netherlands. The recapitalisation was achieved through a number of debt-for-equity swaps. The existing debt structure, including NY law and UK law governed publicly traded notes and bank financing, added particular complexity to the transaction. The transaction required a multi-expertise and cross-jurisdictional approach. De Brauw worked with counsel in the Netherlands, the United Kingdom, the United States, Belgium and Luxembourg. Involved practice groups included finance & restructuring, corporate advisory, capital markets, competition, employment and employment benefits, tax, M&A and financial regulatory. As lead counsel, De Brauw worked as part of an integrated team with Slaughter and May and Cravath, Swaine & Moore. Goldman Sachs International acted as financial adviser. The De Brauw team was led by restructuring partner Ferdinand Hengst.Finance & Restructuring: Ferdinand Hengst, Reinout Vriesendorp, Niek Biegman, Tristan Peters, Laurens Peters, Sebastian Hinse, Gilles Becker, Thijs Elseman, Roos de Blécourt, Chris Noordam, Kirsten Lagerweij, Laurens van de Ven and Hafida FaroukTax: Wiebe Dijkstra, Joppe de Bruijn, Pim Siemons, Dana Horvath and Maarten van der WeijdenLitigation: Reinout Vriesendorp, Berto Winters, Charissa Veldman, Hylke ten Bruggencate, Mick Gerrits, Dennis de Feij, Geert Lokhorst, Malte Malycha, Rein Ferwerda and Jeroen van der SchrieckCorporate advisory: Mark Rebergen, René van Tricht, Peter Nolten, Daan Gieben and Tijmen van de Leemkolk Employment: Janneke van der Kroon, Barbara Kloppert and Rik van Haeringen M&A: Arne Grimme, Heather Giannandrea, Chaggai Kon and Sasja Uijldert FMR: Mariken van Loopik and Tjalling Waterbolk Competition and state aid: Maikel van Wissen

Developed in the US since 2016 and now a relatively common phenomenon in the US, liability management exercises (LMEs) are making their way into European debt structures. LMEs allow borrowers to access liquidity and reduce their debt burden through contractual permissions rather than in-court or extrajudicial restructuring processes. While these exercises can help companies attract new financing, they also may have implications for creditors and lead to "creditor-on-creditor violence", where different creditor groups act strategically to protect their interests, often at the expense of others.

In previous articles, we looked at several key aspects of the Dutch restructuring scheme (known as the "WHOA"), including: how the scheme operates; the ban on appealing lower court decisions; combining WHOA and US plans; and how the scheme works in practice. In other jurisdictions, insolvency proceedings similar to the WHOA are increasingly used to settle mass damages claims. A recent noteworthy example concerns Purdue Pharma, which initiated Chapter 11 proceedings to restructure its debts, consisting for a large part of mass damages claims arising from its role in the opioid crises. The WHOA may also have this potential to be used as an instrument to settle mass damages claims.

On 13 February 2024, the Amsterdam Court of Appeal ruled that the statutory ban on filing appeals against decisions by courts of first instance in Dutch WHOA proceedings meets the requirements set out in the EU Insolvency Regulation. According to the Court of Appeal, this regulation does not give parties a stand-alone right to have their case re-evaluated by a second fact-finding court. Parties looking to have a first-instance WHOA decision overturned may only do so under specific circumstances allowing them to override the statutory appeal ban.