One law firm around the world One law firm around the world Informal Workouts as a Means for Addressing Legal Shortcomings 1 Forum for Asian Insolvency Reform Seoul – 10 November 2003

2 The need for a global solution  The Ammanati insolvency in 1302  The Herstatt insolvency in 1974  The lessons

Workouts may offer a global solution International provisions of Bankruptcy laws deal with cross-border assets of one single entity but do not deal with group of companies Example: the EU Regulation of 29 May 2000 on International Insolvency

The « Enron » example A unique filing in New- York for all US entities A filing in London for Enron Europe

The Sisas insolvency Sisas Italy Sisas Lux Pantochim (B)

Another advantage The absence of stigma

How to implement a workout? Set up a task force to assess the difficulties (lawyers, auditors, etc.) Convening all or the major creditors to obtain a “stay”

Pool of creditors One single estate Different committees

Negotiation and implementation of the plan Social plan Sale of assets Debt/equity swaps Focus on profitable activities

The risks Process rests on consent If not controled, individual actions may lead to the « grab-rule » and to liquidation.

The challenges Lawmaker promotion of workouts But beyond what the law can do: “A fire remains a fire” And hope: “the earth hardens after the rain