NextGen Summary continued from page 59 insolvency, stakeholders lacked the usual incentive to compromise. Liam Faulkner and Dr. Oriana Casasola examined how the governing law of an SOE’ s debt shapes the tools available, including whether choosing foreign governing law can be strategically advantageous. Francesca Burigo explored the European state aid dimension: SOE rescue packages must avoid constituting prohibited state aid, constraining governments’ ability to simply bail out distressed entities.
Erik Torjusen offered his own set of principles for SOE restructuring, emphasizing that governments should stay out of both the operation and rescue of SOEs to safeguard against political influence, though the panel debated whether this is genuinely achievable outside a handful of wealthy nations. The discussion also addressed the“ expectation gap”: creditors often assume an SOE will never be allowed to fail, which distorts pricing and risk assessment. Ukraine’ s state road agency, which successfully persuaded creditors to accept a haircut, and national airline carriers were cited as illustrative examples.
Battle of the Brilliant Ideas
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The technical component of the day closed on a lighter note with the“ Battle of the Brilliant Ideas”, in which each panelist championed a single proposed reform to their jurisdiction’ s insolvency framework, with the audience voting for the most persuasive pitch.
Nienke Lillington proposed reforming certain liquidator powers so that they are challenged ex post rather than requiring prospective court sanction, in order to keep costs down and drive efficiency. Richard Woodsworth delivered an incisive critique of Hong Kong’ s scheme process for assessing the“ relevant alternative.” He argued that the current system, in which the debtor appoints the independent valuer, produces reports of limited utility at best and“ a recipe for litigation” at worst. His fix was elegantly simple: have the court appoint the valuer at a preliminary step, ensuring genuine independence, allowing creditor consultation, and front-loading any disputes.
Jason Hufendick championed“ funded-debt-only restructurings” as a way to manage Chapter 11 costs, arguing that the lack of such a mechanism has driven the rise of LMEs, in which companies“ contort themselves” to restructure capital structures outside of court. This sparked a lively debate about whether removing court oversight might be dangerous, particularly from an emerging-markets perspective. Rachel Nicholson made the case for introducing cross-class cram downs to Canada’ s CCAA, noting that the mechanism already exists in U. S. Chapter 11 and the UK’ s Part 26A. She argued it would reduce companies’ reliance on reverse vesting orders while retaining safeguards through valuation and court scrutiny.
The audience voted enthusiastically, and Jason Hufendick ' s suggestion of“ funded-debt-only restructurings” won the most votes though, of course, the restructuring and insolvency industry was the real winner on the day! Looking Ahead The day concluded with the induction of the 2026 NextGen Class, who were presented with their certificates by III Chair Mark Bloom and III President Professor Stephan Madaus, followed by a champagne toast, generously sponsored by Cooley LLP, to commemorate 15 years of the III NextGen Program. Indeed, the
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