Corporate Restructuring and Insolvency: Administration Pursuant to Section 8 of the Insolvency Act 1986: Two Recent Cases of Interest to the US
Mondaq Business Briefing › United Kingdom Law Articles in English (2003)
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Corporate Restructuring and Insolvency: Administration Pursuant to Section 8 of the Insolvency Act 1986: Two Recent Cases of Interest to the US
The Meaning of Insolvency — A Message to US High-Yield Investors and Acquirers of Distressed Debt in Europe
In Re Colt Telecom Group Plc [2002] EWHC 2815, the English Court has sent a clear message to US high-yield investors and acquirers of distressed debt that when considering the meaning of insolvency for the purposes of an English administration, it will not tolerate "shaky, tentative and speculative" arguments as to the financial health of companies.Colt carried out business through its trading subsidiaries. Its business comprised the provision of advance telecommunications services to corporate and government customers across Europe (totalling £2.6 billion as at 30 September 2002). Its assets consisted primarily of cash held by it and investments in its subsidiaries comprising shareholdings in, and long term funding to, those subsidiaries. Its liabilities consisted principally of its indebtedness under 9 series of Notes issued by it between 1996 and 1999. Its business had also bee...See the full content of this document
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