Corporate Restructuring Summit David Baxter A&L Goodbody 27 September 2012

 Personal Insolvency Bill  Update on key cases in 2012  eircom Restructuring Overview

 Reform of law = condition of Troika bail-out programme  Key features: reform bankruptcy; creation of an Insolvency Service; & 3 non-judicial debt settlement arrangements  Debt Relief Notices: unsecured debt up to €20,000  Debt Settlement Arrangements: unsecured debt; > €20,000  Personal Insolvency Arrangements: unsecured & secured (the latter up to a max of €3m) Personal Insolvency Bill

Change to Bankruptcy regime  Automatic discharge after 3 years  Existing bankruptcies  Bankruptcy tourism:  Will it ease up?  UK courts’ reaction to date

ECB concerns with Bill  “Unprecedented“ reforms…. introduced “without the benefit of an economic impact assessment“  €3m cap too high? Covers debt on: PPRs, buy-to-lets & business debt. Significant uplift in default rates?  Debtor co-operation should expand beyond obligation to secured creditors as regards PPR  Shorter review period of PIA regime

Personal Insolvency Bill – Next Steps  Bill published – June 2012  Committee Stage  Come into law – Q1, 2013?  Insolvency Service

 Ulster Bank v Deane & others [June 2012]: On Demand facilities & Parole Evidence Rule  O’Connors Nenagh Shopping Centre [December 2011]: fraudulent preference & dominant intention to prefer  Treasury Holdings v NAMA [July 2012]: pre-enforcement engagement required? Recent key cases

 Ulster Bank v Roche & Buttimer [March 2012]: enforcement of guarantees & undue influence  Reox Holdings plc [July 2012]: relief for guarantees on upward only rent reviews  Start Mortgages revisited: EBS v Gillespie [June 2012]; McEnery v Sheahan [July 2012]; Woodchester v Reade [August 2012] Recent key cases

 Examinerships:  Mr. Binman [November 2011]: lack of full disclosure  McSweeney Pharmacy Group [December 2011]: better return in a trading receivership?  Atlantic Home Care [June 2012]: re-gearing of leases  Cappoquin Chickens [August 2012]: creditor petition; management functions vested in examiner Recent key cases

 One of the largest financial restructurings in EU in 2012  Options of jurisdiction to restructure  Examinership chosen  Change in ownership  The Group’s debt reduced from €4.08  €2.35 bn eircom Restructuring: overview

Net Debt Profile (€1000m) eircom Group debt profile, pre-restructuring

Q2 - Q Timeline of Restructuring Day 1 29 March Examinership starts 11 June 2012 Day 44 Senior Lenders’ offer accepted Creditors’ meetings Day 50 Interloper bid rejected Feb 2012 Mid- March M&A process Lock-up entered into Day 51 Day 55 Section 24 Hearing Completion Engagement with Stakeholders Co-Comm set-up Waiver put in place

 Key infrastructure asset; strong cash flow; 5,000+ jobs  Use of lock-up by senior lenders; confidence in process  Low creditor approval threshold  Effective implementation by main 3 stakeholders  Significant PR planning eircom: why was Examinership a success?

Examiner in bid to save 566 jobs at linen supply firm The Irish Times Fleming Group thrown a lifeline by High Court Protection now extended to three companies owned by the developer Irish Independent 600 jobs at risk as examiner appointed to waste company Irish Independent Examiner in at loss-making Aer Arran as debts mount Troubled firm must secured fresh investment Irish Independent PR & Examinership

 A pre-negotiated plan works  Payment of pre-petition liabilities justifiable  An out-of-the-money creditor can get nil  The courts tend to back the examiner  The courts like speed eircom Restructuring: take-away points

Dublin: a new, favoured EU restructuring forum? eircom Restructuring: a final thought

Corporate Restructuring Summit David Baxter A&L Goodbody 27 September 2012