The European High Yield Association (EHYA), which represents banks and investors involved in high risk bond and loan markets, has written to the UK Treasury suggesting three key areas to reform insolvency legislation to improve the 'efficiency and fairness' of corporate restructurings.

The letter suggests changes to help prevent value destruction caused by suppliers and customers terminating contractual relations, speed up resolution of disputes and restrict the influence of creditors and shareholders with no economic interest in the revalued business.

The letter goes on to suggest that the reforms could have benefited the restructurings of British Energy, Eurotunnel, Marconi, Jarvis and Polestar.

Dan Hamilton, head of the White & Case London office's Financial Restructuring & Insolvency group and co-chair of the EHYA's European Insolvency Reform Committee (EIRC) commented that such reform would be well-timed, "There are a number of questions being raised about the UK's current restructuring model. This next round of corporate rescues is going to be vastly more complex given the explosive growth in leveraged lending in Europe since 2001 and in the sheer number, variation and complexity of debt instruments that have emerged since then."

To download the EHYA's letter to HM Treasury, please click here.

The EHYA is a non-profit trade association which represents participants in the European high yield market. It was set up in 2000 to broaden knowledge of non-investment grade debt instruments, develop consensus in standardising the products within the asset class and promote high yield debt securities as a financing choice for European issuers and sponsors. Membership is open to banks, investors, issuers, law firms, accounting firms, financial sponsors and other participants in the European high yield market.

The EIRC was established by the EHYA. Its objectives are: to encourage a better understanding of the law and practice of corporate restructuring across Europe; identify the various obstacles that impede efficient restructurings; and to promote the case for comprehensive reform of European insolvency laws that encourage and facilitate corporate reorganisation and restructuring.

Dan Hamilton leads the Firm's Financial Restructuring & Insolvency Practice in London, which deals with some of the largest and most complex restructuring appointments in the UK. Our global restructuring team is among the most respected in the world, with a global team comprised of some 150 lawyers in 24 countries and was recently ranked in first place with a role on 691 active cases in The Deal's end-of-year bankruptcy league tables, which rank firms by number of active debtor, creditor and other cases. The second-placed firm was credited with 261 cases. The firm also topped the same league table in 2006.