Europe—On 12 September 2012, the European Commission issued a proposal for an EU regulation which would confer upon the European Central Bank ("ECB") supervisory responsibility for all banks operating in the Eurozone.
The controversial proposal will transfer to the ECB a broad
range of supervisory powers currently performed by national
regulators, including far-reaching supervisory powers over Eurozone
banks. This has caused concern among non-Eurozone member states
that "back-door" supervisory powers will be exercised by
the ECB in relation to non-Eurozone banks—particularly
with respect to operations such banks conduct within the Eurozone.
For investors, the proposals will likely change the dynamic of
opportunities to acquire or sell bank assets in the Eurozone. The
ECB's supervisory board responsible for exercising the
oversight mandate will comprise representatives from EU member
states and will be monitored by the Chair of the European Banking
Authority and a member of the European Commission. Accordingly,
bank mergers and acquisitions activity will be subject to scrutiny
by a broader group of stakeholders than the relevant member state
regulator. The target date for implementation of the new
supervisory regime is 1 January 2013 (in line with the target date
for implementation of the Basel III proposals in the EU). However,
in recognition of the time it will take to prepare for the
supervision of banks across 17 nations, it is currently anticipated
that the ECB will not assume in full the tasks conferred upon it
until 1 January 2014.
The UK—In a pair of recent cases involving
challenges to noteholder resolutions by minority investors whose
rights were affected by majority noteholders' binding
decisions, the UK High Court for the first time attempted to
establish the limits of acceptable practice in the context of
consent solicitations. In Azevedo v Imcopa
[2012] EWHC 1849 (Comm), the High Court as a matter of first
impression directly considered the validity under English law of a
"consent payment"—a payment of cash or other
consideration by the issuer to noteholders in exchange for
noteholder consent to amend the existing terms of the notes. The
Court held that consent payments are valid if openly disclosed and
offered to all noteholders on an equal basis prior to any
noteholder meeting. In Assénagon Asset Management S.A. v
Irish Bank Resolution Corporation Limited (formerly Anglo Irish
Bank Corporation Limited) [2012] EWHC 2090 (Ch), the High
Court ruled that an "exit consent"—a deemed
acceptance of a resolution issued in connection with an exchange
offer—that was approved by an extraordinary resolution of
noteholders was oppressive and unfair to minority noteholders
because, among other things, it was unlawful for the majority to
vote in favour of a resolution which effectively expropriated the
minority's rights for nominal consideration. A more detailed
discussion of the rulings can be found at
http://www.jonesday.com/two_recent_cases/.
Italy—On 3 August 2012, the Italian
Parliament approved Italian law decree No. 83 of
22 June 2012 (the "Decree") on a final
basis. The decree introduces significant amendments to the Italian
Insolvency Act designed to reform the bankruptcy system by
increasing its efficiency and facilitating the reorganization of
distressed debtors. The general framework and key principles
originally contained in the Decree remain unchanged, but in giving
final approval to the amendments, Italian legislators have refined
certain procedural elements and clarified other key aspects of the
reforms. These changes include amendments to the automatic stay
procedures in cases where an insolvency petition is filed solely to
forestall a debtor's insolvency, new rules and procedures to
govern voting on a plan of reorganization and new rules designed to
encourage interim financing. Additional information concerning the
reforms can be found in the 20 July 2012 edition of
EuroResource.
Germany—On 12 September 2012, Germany's
Federal Constitutional Court ruled that Germany could proceed with
its contribution to the European Stability Mechanism
("ESM"), subject to certain
conditions. The court rejected several applications for
interim injunctions blocking Germany's President from signing
laws approving the Treaty Establishing the European Stability
Mechanism (the "ESM Treaty") and the Treaty on Stability,
Coordination and Governance in the Economic and Monetary Union (the
"Fiscal Compact"). By signing both laws—which
were passed by the German Bundestag and the Bundesrat in June
2012—President Gauck fulfilled a precondition for the
German ratification of the ESM Treaty and the Fiscal Compact.
Although the court denied the applications for provisional relief,
it held that the ESM Treaty may be ratified only if the court is
provided with assurance under international law that:
(i) Germany's liability is limited to its share of
approximately €190 billion in the authorized capital stock
of the ESM, and that the ESM Treaty will not be construed to
establish greater German payment obligations without the consent of
the German parliament; and (ii) the provisions of the Treaty
concerning the inviolability of the documents of the ESM and the
professional secrecy of all persons working for the ESM do not
prevent disclosure of such information to the Bundestag and the
Bundesrat. The ruling clears the way for the establishment of the
ESM.
Newsworthy
Jones Day is advising OrthoHelix Surgical Designs, Inc.
("OrthoHelix") in connection with the $135 million
acquisition of OrthoHelix by Tornier N.V. ("Tornier"), a
global medical device company headquartered in Amsterdam, The
Netherlands focused on providing surgical solutions to orthopaedic
extremity specialists. OrthoHelix, based in Medina, Ohio,
U.S., is a medical device company developing a comprehensive line
of implants and instruments for use in small bone reconstructive
surgery. The addition of OrthoHelix is expected to more than double
Tornier's lower extremity revenue and allow Tornier to increase
its focus on foot and ankle surgeons. OrthoHelix will continue to
operate under the OrthoHelix name and retain all of its product
brand names in the market, and customers will continue to be served
by OrthoHelix and its distribution partners. Central operations of
the OrthoHelix business, as well as the company's 80 dedicated
employees, will remain based in the U.S.
Jones Day is advising mobile telecom operator KPN Group
Belgium SA before Belgium's Constitutional Court in its
challenge to a law imposing an €180 million fee for the
renewal of licenses to operate a 2G mobile network. KPN
and other 2G mobile operators seek annulment of the law, which was
passed by Parliament in 2010 as a result of the Belgian
government's disagreement with a Court of Appeal ruling against
the telecom regulator's process for renewing the licenses.
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