Cross-Border Restructuring Case Study: Syncreon

In Short

The Situation: Jones Day recently represented a group of secured term loan and revolver lenders in the global restructuring of syncreon Group B.V. ("syncreon")—a leading provider of logistics services with over 14,000 employees across more than 100 facilities located in 20 countries around the world.

The Result: After the English High Court's approval on September 10, 2019, of schemes of arrangement for syncreon's Dutch and English subsidiaries, the United States Bankruptcy Court for the District of Delaware recognized the scheme under chapter 15 of the Bankruptcy Code on September 11, 2019, and the Ontario Superior Court of Justice added the final chapter to the cross-border restructuring when it entered an order recognizing the scheme on September 19, 2019, under the Canadian Companies' Creditors Arrangement Act ("CCAA").

Looking Ahead: Syncreon's reorganization is widely considered to be the first-ever use of an English scheme of arrangement to restructure debt issued by a U.S.-based global enterprise. It would also appear to be the first time that an English scheme has been recognized under the CCAA. More of these kinds of innovative cross-border restructurings can be expected.

Jones Day recently represented a group of secured term loan and revolver lenders ("Ad Hoc Group") in the global restructuring of syncreon. Throughout the restructuring process, Jones Day utilized its worldwide network of offices to seamlessly promote the interests of the Ad Hoc Group and achieve a smooth and successfully restructuring of syncreon.

In the beginning of 2019, prior to the commencement of restructuring negotiations, syncreon had approximately $985 million in funded debt, in the following capital structure:

$680 million in secured term / revolving loan debt ("Secured Loans") $80 million in secured ABL debt ("ABL Debt") $225 million in unsecured notes ("Notes") Given syncreon's multicountry organizational structure, the Secured Loans and Notes were issued and guaranteed by entities in a multitude of countries throughout the world, including the United States, the United Kingdom, the Netherlands, Canada, Germany, Ireland, Hungary, Poland, and the Isle of Man.

In early 2019, the Ad Hoc Group formed to assess syncreon's financial position amid mounting liquidity pressure. Shortly after organizing, the Ad Hoc Group agreed to provide syncreon with a short-term injection of liquidity, and thereafter began negotiating a comprehensive balance sheet...