Who? Elaine Nolan, partner at Kirkland & Ellis International LLP, London. 

Elaine Nolan

Why is she in the news? The firm represented cinema chain operator Cineworld, whose restructuring plan was approved by the High Court despite a challenge from landlords.

Thoughts on the case: ‘The judgment demonstrates the significant power of the restructuring plan (RP) to bind dissenting classes. While the cross-class cram down mechanism has already been tried and tested in previous RPs, the groundbreaking element of this case consists of the court endorsing the use of the mechanism to allow compromises despite the existence of contractual side letters in which Cineworld had agreed not to seek further compromises from the opposing landlords.

‘This opens a major opportunity for companies to seek further compromises of existing leases (or other contracts) with similar negative covenants through restructuring/insolvency proceedings, subject to safeguards, for example the debtor’s financial deterioration following the initial compromise, fairness, and good faith.

‘In arriving at the above conclusions, the court held that the existence of side letters was not a good reason/proper justification for excluding the opposing landlords from the plans. In fact, exclusion would contravene the pari passu principle, because the opposing landlords would be treated unjustifiably preferentially than in the relevant alternative. In this context, the court also endorsed the plans’ fairness, underlying that fairness is primarily a matter of relative treatment of the creditors between themselves (versus between the company and individual creditors).’

Why become a lawyer? ‘A hunger to find solutions to complex issues and seek to apply this to the commercial world.’ 

Career high: ‘Rescuing many retail and consumer businesses throughout the pandemic and using restructuring processes in complex situations. Also following this period, authoring and co-editing a book on company voluntary arrangements.’

Career low: ‘I am fortunate to work alongside exceptional colleagues and clients, which has made low points in my career quite rare.’

Topics