Hogan Lovells

The firm advised the Republic of Ecuador on its US$17.4 billion sovereign debt restructuring

History of the practice

A major player in the restructuring market for over 75 years, Hogan Lovells first made waves in the cross-border sector in 1991 with the collapse of London’s BCCI banking group. Acting as counsel to the group’s officeholders across some 70 jurisdictions, the case became a 22-year project that ultimately saw US$7 billion returned to creditors. With limited international law governing cross-border protocol at the time, an English judge commended practitioner in laying out “a worldwide system for regulating international insolvency which the civilised countries of the world had failed to achieve”.

In Europe, the firm has often found itself among the first to test major new legislation – particularly since 2008, as the continent has driven for more flexible regimes. Hogan Lovells partners were some of the first to try out France’s accelerated safeguard proceedings; and the firm also helped to shape recent reforms in Italy.

New York partner Chris Donoho took over as global practice head in January 2019, succeeding London partner Stephen Foster. Partners Richard Wynne and Ronald Silverman head the firm’s US-based restructuring practice; while Tom Astle leads in London, Jonathan Leitch in Hong Kong and Philippe Druon in France. Other names to know include German head of restructuring Heiko Tschauner and Sydney-based Scott Harris, the managing partner of Hogan Lovells in Australia.

Former Delaware bankruptcy judge Kevin Carey joined the firm in October 2019, and has since been appointed president-elect of the American Bankruptcy Institute, with his term set to begin in April 2022.

The firm also has a separate insolvency litigation team made up of 32 partners globally, led by Crispin Rapinet in London and Manon Cordewener in Amsterdam.

Network

Hogan Lovells has full time restructuring and insolvency lawyers in 22 offices across 17 jurisdictions – in the US and Europe, as well as in Australia, China, Dubai, Mexico, Russia, Singapore and South Africa, Hong Kong and Tokyo.

Who uses it?

The firm has forged strong relationships with creditor-side parties in proceedings worldwide, particularly in cases relating to real estate, energy, healthcare and financial institutions. The firm advised unsecured creditor committees in the US leg of the US$9 billion collapse of Spain’s Abengoa and trustees to the UK pension plan of US–Canadian telecoms company Nortel.

Standard Chartered Bank, Santander, Lloyds Banking Group and the “Big Four” accountancy firms have all instructed the firm too – notably PwC as administrators of Lehman Brothers Holdings in the 2017 Waterfall III case in London.

As reflected by the BCCI case, Hogan Lovells also has plenty of experience acting for court-appointed officers in insolvency proceedings.

Historic track record

Besides BCCI, Hogan Lovells’ major triumphs include representing the plan trustees as a member of the official committee of unsecured creditors in the US$2.8 billion collapse of US photography company Eastman Kodak; and advising the senior steering committee on the restructuring of facilities provided to German rig-builder IMO Group – one of the first contested UK schemes of arrangement arising in the wake of the 2008 global financial crisis.

The group also acted on the restructuring of German parking management company APCOA, which was the first time that the governing law of a credit document was changed to enable the debtor to use an English scheme of arrangement.

In Asia, the firm was counsel to the liquidators of Hong Kong electronics conglomerate Akai in the city’s largest corporate collapse to date. The case, which is still running 13 years later, triggered complex litigation regarding the insolvency practitioners’ conduct, ruled upon by Hong Kong’s Court of Final Appeal.

The firm also acted on the US$1.8 billion restructuring of China’s commercial forest plantation operator Sino-Forest Corporation, which marked the first time that a company with the majority of its assets in China restructured under Canada’s Companies’ Creditors Arrangement Act.

And a team led by partner Angela Dimsdale Gill helped Nortel’s biggest single creditor, the UK pension scheme trustee, get better-than-expected returns when a global settlement finally opened the defunct Canadian telecoms company’s US$7.3 billion lockbox in January 2017, after a nine-year dispute between competing bankruptcy estates.

More recently, Hogan Lovells advised super-priority facility lenders in the restructuring of Croatian food conglomerate Agrokor – Europe’s biggest restructuring of 2017–2018. The company emerged as Fortenova Group in April 2019, having restructured about €6 billion in debt.

The firm also advised an ad hoc noteholder committee in the US$1.1 billion restructuring of Ukrainian farm conglomerate Mriya Agro Holding. The case was the first in which foreign creditors took over a Ukrainian company (its previous managers had absconded to Switzerland after a fraud scandal), and included a consensual out-of-court deal, a Cypriot liquidation and 13 Ukrainian bankruptcies. In 2018, the conglomerate finished its three-year restructuring with a sale to a Saudi state-owned investor.

Meanwhile, in Delaware, Hogan Lovells advised Scottish Annuity & Life Insurance Company (SALIC), the Cayman subsidiary of Bermudian reinsurer Scottish Re Group. The two entities and SALIC’s US subsidiary were sold to a creditor in Chapter 11 proceedings, in a case that included a provisional winding-up in Bermuda and ancillary proceedings in the Cayman Islands overseen by the same court-appointed officers.

In a long-running assignment in Singapore, Hogan Lovells has been representing an unsecured working group of banks in the restructuring of struggling water treatment company Hyflux, which entered court protection in May 2018 with more than S$3.2 billion (US$2.37 billion) in debt. But the company’s judicial managers applied to wind it up in June 2021 after failing to secure a rescue deal.

Another long-running matter that Hogan Lovells has a role in is the bankruptcy of industrial fishing group Pacific Andes, where the firm is acting for Madison Pacific as agent to club loan lenders in the group’s US Chapter 11 bankruptcy. Pacific Andes entered liquidation in the British Virgin Islands in 2015, while other parts of the group, which is also known as China Fishery, commenced Chapter 11 proceedings in 2016. The group launched English restructuring plan proceedings and a Singaporean scheme to complement the Chapter 11 plan in the latter half of 2021.

Back in the UK, partner John Tilman acted for the German Federal Tax Office in a dispute with MF Global’s UK subsidiary. In March 2019, the tax office successfully persuaded the English High Court to stay its claim in London so it could pursue a €52 million withholding tax claim against the subsidiary in a German fiscal court.

Recent events

The past year has seen Hogan Lovells add quite a few new faces around the globe – including DLA Piper partner Jonathan Leitch, who joined the firm in Hong Kong in January 2020. It also saw a raft of promotions that month, including for James Maltby in London, who made partner. Astrid Zourli in Paris, Christine Borries in Munich, John Beck in New York and James Hewer in Perth were all promoted to counsel.

Six months later, it added Singapore partner Charlie Clayton-Payne from Harneys, and it hired partner Marion Guertault from Latham & Watkins in Paris. In September 2020, also in Singapore, Hogan Lovells also added partner Nick Williams from K&L Gates in October 2020 – but lost partner Shaun Langhorne to Clifford Chance in May 2020.

Finally, the firm recruited Debevoise & Plimpton partner Kevin Lloyd in February 2021, after losing Los Angeles-based partner Stacey Rosenberg to Sheppard Mullin Richter & Hampton the previous month.

Top cases of the research period

A multi-disciplinary, multinational team led by Silverman and partners Evan Koster, Philip Ehrlich, Dennis Tracey and Michael Hefter advised the Republic of Ecuador on its US$17.4 billion sovereign debt restructuring, which closed in August 2020. The sovereign swapped 10 sets of existing international bonds due to mature between 2022 and 2030 for three new issuances with maturity dates of 2030, 2035 and 2040, and managed to shave US$1.5 billion off its debt pile. The firm helped structure one of the first applications of collective action clauses in sovereign bond restructurings as part of the restructuring, which also saw it defeat challenges brought by creditor funds in New York.

Silverman and Los Angeles partner David Simonds have also been advising the official committee of unsecured creditors in the Chapter 11 restructuring of Australian satellite communications group Speedcast, which secured court-approval to sell itself and 32 international subsidiaries to US private equity firm Centerbridge partners in January 2021. As part of the plan that Hogan lovells helped negotiate, Centerbridge has invested US$500 million into Speedcast, which will be used to repay all its US$285 million debtor-in-possession financing and reduce the group’s senior secured debt.

In Paris, Druon acted for French commercial shipping and offshore group y Bourbon on a €3 billion restructuring of its equity and debt, which closed in February 2021 and included the first-ever judicial takeover by creditors of a French publicly listed company in rehabilitation proceedings. The group is now fully owned by its creditors, including French banking groups Société Générale and Crédit Agricole, and other foreign institutions such as Standard Chartered Bank and China’s ICBCL.

Back on the creditor side, an ad hoc committee of lenders including Deutsche Bank and Gazprombank sought counsel from London partner Alex Kay in the UK restructuring of Ukrainian energy company DTEK. In February 2021, the DEK group agreed heads of terms for a restructuring of its US$2 billion debt pile, and three months later it secured sanction of a pair of schemes – despite objections from Russia’s Sberbank. The schemes were recognised under Chapter 15 in New York.

Tilman and fellow London-based partner Rapinet also led the team advising the administrators of Lehman Brothers Holdings plc on litigation over US$10 billion in subordinated liabilities in a two-week-long trial before the High Court. The court issued a ruling on priority rankings in July 2020, which went to an appeal hearing before the Court of Appeal in October 2021 – a landmark judgment later that month overruled some of the lower court’s findings.

During the research period and beyond, Hogan Lovells has also worked on the restructuring of Chilean airliner LATAM, advising Knighthead Capital Management as a lender in a debtor-in-possession proposal and Spanish energy company Repsol as a creditor. It also acted for PwC as administrators of foreign exchange company Travelex, which completed a restructuring in August 2020 to slash US$294 million of its debt.