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ARTICLE · 29 MAY 2017

Scheming and restructuring to protect creditors

Corrs Chambers Westgarth
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This case highlights the Court's willingness to assist with the restructuring of companies to the benefit of creditors.

AustraliaInsolvency/Bankruptcy/Re-Structuring
David Abernethy
David Abernethy
Jade Rowarth
Jade Rowarth
Jason Salman
Jason Salman
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This week's TGIF considers the case of In the matter of Boart Longyear Limited [2017] NSWSC 537 in which the NSW Supreme Court made orders to assist with the restructuring of a group of companies to the ultimate benefit of creditors.

BACKGROUND

A group of companies in financial difficulty sought the Court's approval of two interdependent creditors' schemes of arrangement which would effect a restructuring of the group's financial affairs. The group had operations both in Australia and the US.

The creditors' schemes were largely supported by the companies' creditors. However, one of the group's key US creditors (a significant holder of senior secured notes) indicated that it would seek to block the restructure, as it considered it could procure more favourable terms. Accordingly, there was a risk that the US creditor would seek to bring proceedings in both Australia and the US to jeopardise the proposed schemes. Especially in circumstances where the company not

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