On Monday 26 June 2017, after three years of substantial losses and hobbled by a deadly air bag scandal, Japanese auto supplier Takata Corp. filed for bankruptcy protection. This represents one of the most spectacular bankruptcy filings in the automotive industry since the cases of Delphi (2005), and GM and Chrysler (2009).
From ‘Liquidators’ to ‘Practitioners in the Field of Restructuring’: Sea Change or Cosmetic Maquillage?
The Proposal for a Directive on Preventive Restructuring Frameworks (November 2016) introduced a new figure in the insolvency and restructuring arena: the practitioner in the field of restructuring or PIFOR.
This note highlights the key similarities and differences between these professionals and (i) the ‘insolvency practitioners’ as defined by the 2015 EU Regulation on Cross-Border Insolvency Proceedings (recast) and (ii) the ‘liquidators’ as defined by the 2000 version of that regulation.
This note assumes that the key objective of the proposed directive is to achieve greater substantive harmonization of substantive insolvency practices and laws between the Member States. It therefore tests whether this assumption is valid with reference to the newly introduced notion of PIFOR.
It concludes, however, that the proposal fall short of the mark, since the new definition of PIFOR is unlikely to be interpreted in the same way across all the Member States.
In addition to that, this note highlights other issues associated with the proposed notion of PIFOR: (i) the uncertainty associated with the definition and its scope, and (ii) the possible relaxation of professional and ethical standards as a result of the competition between IPs and PIFORs.
On November 7, 2014 O.W. Bunker, the parent company of a global network of traders and physical suppliers of fuel bunkers, filed for bankruptcy protection in Denmark upon the discovery of a massive fraud and unsupervised trading which resulted in losses of about US$275 million. This forced nearly all of its subsidiaries to file for bankruptcy in their respective countries of incorporation. Shortly thereafter, a co-operation agreement was reached between O.W. Bunker and ING Bank, as the assignee of a number of debts due to the parent company.