Greenwich Solicitors recently completed a substantial multi-site corporate restructuring involving a portfolio of trading businesses operating from multiple locations across England.

The transaction involved the reorganisation of a number of existing operating businesses into a newly established corporate group comprising a holding company (HoldCo) and multiple special purpose vehicle companies (SPVs), with the individual businesses and their associated assets transferred to the relevant SPVs. The matter required the simultaneous coordination of corporate, commercial, commercial property, employment and secured lending workstreams, together with the negotiation and implementation of a substantial suite of interdependent transaction documents.

Structuring the new corporate group

A central feature of the transaction was the creation of a new corporate structure under which HoldCo became the parent company of a number of newly incorporated SPVs. Each relevant trading business was transferred from its existing operating company to the appropriate SPV by way of a Business and Asset Purchase Agreement (BPA). The restructuring therefore required careful consideration not only of the individual business transfers but also of how the SPVs would operate within the wider group following completion.

Greenwich Solicitors advised on the implementation of the new group structure and prepared and coordinated the necessary HoldCo and SPV corporate documentation required to implement the transaction. The corporate approvals also had to correspond precisely with the underlying BPAs, property arrangements, shareholder transactions and financing documentation.

Business and asset transfers

Multiple BPAs were required to deal with the transfer of the respective businesses and their associated assets into the new SPV structure. The business and asset transfers required consideration and coordination of matters including:

• allocation of consideration between goodwill, equipment and other transferring assets;

• completion accounts and payment mechanics;

• treatment of existing liabilities and creditor balances;

• transfer of operational assets;

• employee transfers under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE);

• completion deliverables and corporate authorities; and

• coordination of the individual transfers so that the relevant SPVs could assume operation of the businesses from completion.

Because numerous businesses were being transferred as part of the same overall corporate reorganisation, consistency between the individual BPAs and the wider transaction structure was particularly important. The completion mechanics also needed to ensure that the corporate, property, shareholder and financing workstreams took effect in the correct sequence.

Minority shareholder restructuring

The existing corporate structure included minority shareholders in a number of the Seller companies. As part of the wider restructuring, separate minority shareholder Share Purchase Agreements (SPAs) and Stock Transfer Forms (STFs) were required to reorganise those shareholdings.

This involved coordinating the shareholder transfers with the relevant business disposals, corporate approvals and completion mechanics while ensuring that the legal distinction between the obligations of the Seller companies and those undertaken personally by the individual shareholders was properly maintained.

The shareholder workstream therefore formed an important part of the overall corporate reorganisation rather than operating as a standalone share transfer exercise.

Commercial property workstream

A substantial commercial property workstream ran alongside the corporate transaction.

Different business premises required different legal solutions, including:

• surrenders of existing underleases;

• new underleases;

• licences to underlet;

• landlord and superior landlord consents; and

• associated property and completion documentation.

These arrangements had to be carefully coordinated with the relevant BPAs so that the appropriate occupational arrangements were in place when the underlying businesses transferred to the relevant SPVs.

This was particularly important because the corporate transaction could not be implemented independently from the property arrangements through which the businesses operated. The matter therefore required close coordination between the corporate restructuring and commercial property elements of the transaction.

Loan novations and secured lending

The restructuring also involved existing lending arrangements that needed to be carried across into the new group structure. Greenwich Solicitors advised on and negotiated Loan Novation Deeds, under which relevant existing borrowing obligations were transferred to the appropriate new SPVs. The wider secured lending and security package included:

• debentures;

• corporate guarantee arrangements;

• personal guarantees;

• an Intercreditor Deed governing the relationship between senior and subordinated creditors; and

• subordination arrangements relating to certain shareholder and intra-group liabilities.

A significant aspect of the negotiations concerned achieving an appropriate balance between creditor protection and the commercial requirements of the newly established group. The security arrangements therefore had to provide appropriate protection for the relevant creditor while avoiding unnecessary restrictions on the ordinary operation of HoldCo and the wider group following completion.

This required consideration not only of the immediate security package but also of the practical ability of HoldCo and the SPVs to operate, fund their businesses and manage intra-group arrangements following completion.

One transaction — multiple interdependent workstreams

The complexity of the matter arose not from any single document, but from the requirement for every element of the restructuring to operate together.

The:

HoldCo/SPV structure, BPAs, shareholder SPAs and STFs, TUPE arrangements, commercial property documents, Loan Novation Deeds, debentures, guarantees, intercreditor arrangements and corporate approvals

all had to be coordinated towards a common completion.

For example, the BPAs needed to correspond with the new corporate structure; the property arrangements needed to take effect alongside the relevant business transfers; the loan novations needed to identify the correct incoming borrower SPVs; and the security arrangements had to reflect the resulting corporate structure. At the same time, minority shareholder interests, corporate authorities, creditor arrangements and completion documentation all needed to be aligned.

The transaction therefore required both detailed document negotiation and a clear understanding of the overall legal architecture of the corporate restructuring.

A coordinated corporate and commercial transaction

The matter brought together Greenwich Solicitors’ corporate and commercial, commercial property and secured lending experience, with the different workstreams coordinated through to completion as part of a single transaction.

Our work includes:

• corporate restructurings and reorganisations;

• business and asset acquisitions and disposals;

• shareholder transactions;

• corporate governance and approvals;

• commercial property arrangements;

• secured lending and security documentation;

• loan novations and intercreditor arrangements; and

• transaction management, completion and implementation.

For owner-managed businesses and corporate groups, a restructuring can involve considerably more than the transfer of a business from one company to another. The corporate structure, shareholder interests, property occupation, employees, financing arrangements, existing liabilities and creditor protections may all need to be addressed as part of the same transaction.

Having advisers who can understand and coordinate those different elements can therefore be particularly important in a complex corporate reorganisation.

Corporate restructuring and business acquisition solicitors

Greenwich Solicitors advises businesses, entrepreneurs and investors on corporate reorganisations, business and asset acquisitions and disposals, shareholder transactions, commercial property and secured lending, from initial structuring and negotiation through to completion.

To discuss a proposed business acquisition, disposal or corporate restructuring, contact Greenwich Solicitors to speak with a member of our corporate and commercial team.