EuroResource--Deals and Debt

Recent Developments

Italy--Parliament recalled to study potential course of action in anticipation of increasing defaults and bank stress. On August 3, the Italian premier told the Italian Parliament that in the eyes of market
operators, Italy has failed to actually tackle the hot topics relating to a potential Italian credit default and banks' stress. It is anticipated that a potential ad hoc law aimed at answering the markets' needs for reforms will be passed by the Parliament (and not by means of a Government-issued extraordinary law decree) in relation to the remaining five months of the current year and should include the ancellation of around EUR 14-15 billion expenses. In any case, all actions will be finalized after the meetings to be held with trade unions and entrepreneur associations in the next weeks.

Luxembourg--Interedil and Centre of Main Interests. Advocate General Juliane Kokott opines on the impact that the relocation of an Italian company to the UK has on its COMI and the factors that stablish
COMI at a place other than a company's registered office. Real property and agreements of the company in another member state are not sufficient to rebut the presumption that COMI is located at the lace of a company's registered office.

UK--The UK Insolvency Service proposal to enlarge rights of unsecured or junior creditors by, among other things, requiring administrators to give creditors at least three days' notice of a proposed sale of the debtor's assets to a connected party, was criticized by many members of the insolvency professional community. The proposal is intended to permit the junior creditors to seek an injunction preventing or delaying the proposed sale. Of course, such creditors would bear the burden of establishing entitlement to the injunction. The proposal stems from concerns that the pre-packaged deals lack transparency and deprive junior creditors of meaningful participation in the insolvency process, trusting instead in the valuation and sale process conducted by the administrator, but leaving as an open question whether the pre-packaged sale enables seniors to appropriate value beyond their claims. The critics laud the pre-packaged process as a mainstay of preserving going concern value of a troubled company and fear that the proposal, if it becomes law, will frustrate the speed and efficacy of pre-packaged administrations and permit or encourage abuse by junior creditors when such creditors may not have a feasible going concern alternative. Developments in this area should interest value funds that increasingly participate as investors in troubled UK companies, because they are capable of committing substantial capital that may indeed provide a feasible going concern alternative to the administrator's proposed prepacked deal. This issue is not over, and we expect more to come.


JUVE, the leading legal publication in Germany, chose the acquisition of VAC Vacuumschmelze GmbH & Co KG (VAC) by Jones Day client OM Group, Inc. (NYSE: OMG) as its "Deal of the Month" for July 2011. OM Group acquired VAC from One Equity Partners, a private equity arm of JPMorgan Chase & Co., for €700 million, or approximately $1 billion. In its coverage of the transaction, JUVE noted its complex financing structure and the rapid timetable on which the negotiations took place. It also noted that Jones Day’s involvement in the VAC deal, which is likely to be one of the year’s largest private equity transactions in Germany, followed the Firm’s role advising Goldman Sachs, Cerberus, and Credit Suisse on their sale of the Wittur Group to Triton Partners, one of the largest private equity deals in Europe last year.

The 2011 edition of Chambers Europe: Europe’s Leading Lawyers for Business includes 63 Jones Day lawyers, six of whom scored top honors in the "Band 1" category, along with 47 regional and local Jones Day practices. Based solely on interviews with lawyers and clients, the Chambers Europe rankings look at a broad range of qualities, including legal ability, professional conduct, client service, commercial awareness, diligence, and commitment to the client, to provide an independent assessment of counsel throughout the region.

European Distress Team Members

Corinne Ball

Victor Kammel
Christian Staps

Paul Bromfield
Kay Morley
Michael Pabst
Sion Richards
Andrew Rotenberg
Michael Rutstein
Adam Scarrott
Luke Johnson

Victor Casarrubios
Luis Muñoz
Richard Puttré
Fernando Lillo

Marco Lombardi
Francesco Squerzoni

Sandra Kamper
Ansgar Rempp
Olaf Benning

New York
Paul Leake
Veerle Roovers

Laurent Assaya

San Francisco
Tobias Keller