A PRACTICAL GUIDE TO RECOVERING ASSETS
CD: Reflecting on the past 12-18 months, what do you consider to be the most significant trends and developments shaping asset recovery processes?
Leeds: We have noticed that an increase in early enforcement has become a key focus for creditors. We have seen creditors take a far more proactive approach to the recovery of assets, particularly where litigation funders are involved. Litigation funders often look for clarity on the recoveries at the end of the proceedings. Because of this, creditors have become more acutely aware of the asset recovery process and recoverability on a claim. Although litigation funding has been prevalent for many years, it is providing better access and tools for insolvency practitioners (IPs).
McDonald: There is an increasing trend toward the use of ‘restructuring light’ or ‘soft wind-downs’ solutions. Stakeholders are seeking solutions that maximise value in tandem with a reduction in administrative costs, particularly as the liquidation process has the stigma of being a time consuming and costly process. This has resulted in a preference to appoint interim receivers to preserve value, whether through a debenture or other agreement or by way of application to the court. Where there is a large corporate structure, with subsidiaries in multiple jurisdictions, solutions often involve a change of control through the appointment of replacement directors to secure the underlying assets, whether through debentures or through the court. Courts in the Caribbean region are certainly showing themselves to be creditor friendly, with an openness to consider alternate enforcement or protection remedies.
Oct-Dec 2018 issue
Grant Thornton