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US firm Davis Polk & Wardwell is representing Aetna in its acquisition of New York Life Insurance. New York Life is being advised by Skadden, Arps, Slate, Meagher & Flom, New York. Aetna has agreed to pay an initial US$1 billion in cash for New York Life, with contractual payments of up to US$300 million if earning targets are met. The Davis Polk & Wardwell lawyers who are working on this deal include corporate partners Lewis Kaden, David Caplan and tax partner Po Sit. In New York, Skadden Arps's team includes mergers and acquisitions partners Jeffrey Tindell and Robert Sullivan. Also in New York are partners Michael Weiner (antitrust), Stuart Levi (IP) and Neil Liff (employment). In Chicago, Louis Freeman is handling the tax issues.

US newsprint company Bowater announced on March 9 it is to pay C$3.5 billion (US$2.4 billion) for Canadian forest products company Avenor. The offer comprises C$2.5 billion in shares and C$1 billion in assumed debt, and sees off rival Abitibi-Consolidated, which also bid for Avenor last month. The deal means Bowater will become the world's largest newsprint producer after Abitibi. Bowater's Canadian counsel is Fraser & Beatty, Toronto, and the lead partner is Jamie Plant. US counsel is Cravath, Swaine & Moore, New York, and the lawyers are coordinated by Allen Finkelson. Local advice is provided by Wyche Burgess Freeman & Parham, in Greenville, South Carolina.

The Saudi Yanbu petrochemical company (Yanpet) has made its first drawing from a US$2.2 billion senior debt facility provided by a group of over 30 international and regional banks. The transaction sets new benchmarks for limited recourse bank financings, achieving a low lending margin and flexible borrowing terms. The principal difficulty in accessing project finance is seen to be the complexity and cost of the transaction. Many jurisdictions simply do not have the legal framework to support the level of contractual certainty or the granting of security at the heart of project financing techniques. The Yanpet project overcame these issues and demonstrated that thoughtful structuring and allocation of traditional risks (eg completion, market volatility, supply and operating risks) can lead to effective execution of even the largest transaction.

The Commission proposed a Directive to eliminate withholding taxes on payments of interest and royalties between associated companies in different member states. Taxes levied at source either by deduction or assessment can involve time-consuming formalities, cash-flow losses and double taxation for companies engaged in cross-border business. The Commission therefore proposed that taxes on payments of interest and royalties should be levied only in the member states where the companies receiving the payments are located. Commissioner Monti says this would remove a 'significant tax handicap' to companies' cross-border operations.

The Supreme Court has confirmed a decision passed by an Appellate Commercial Court in June 1995 In re NL SA v Bull Argentina SA, challenging the validity of agreements entered into among shareholders of Argentine corporations.

In February 1998 amendments to acts regarding the financial sector were proposed. They included the following:

Indonesia offers two options to creditors: bankruptcy and moratorium law. The bankruptcy law is more attractive and designed for their benefit. By Robert N Hornick of Morgan, Lewis & Bockius LLP, New York

After two introductory articles, covering cross-border financing and project financing transactions, the insolvency rules in four of the countries most hard hit by the financial crisis are discussed in detail Does the crisis bring default under MAC clauses? After currency devaluation in Asia, lenders and borrowers are scrutinizing material adverse change (MAC) clauses to determine their respective positions. By Richard M Gray of Milbank, Tweed, Hadley & McCloy, Singapore How to arrange workouts in project financing The crisis in Asia has boosted the existing dangers of failures in project finance transactions. This article outlines the ways to find a solution to failures. By Troy Alexander of White & Case LLP, New York Indonesian bankruptcy law protects creditors Indonesia offers two options to creditors: bankruptcy and moratorium law. The bankruptcy law is more attractive and designed for their benefit. By Robert N Hornick of Morgan, Lewis & Bockius LLP, New York Japan offers debtors and creditors greater options Japan's legal system has a range of alternatives for insolvency proceedings. Bankruptcy is by far the most common. By Naoaki Eguchi and Yoshiaki Muto of Tokyo Aoyama Law Office and Jeremy Pitts of Baker & McKenzie, Toyko Korean insolvency laws protect foreign investors Creditors and shareholders of insolvent Korean companies have three main attractive systems to protect their interests. The courts are showing increasing flexibility. By YS Oh and Keun Byung Lee of Bae, Kim & Lee, Korea New Bankruptcy Act to boost Thai economy Thailand's new Bankruptcy Act should protect insolvent companies while providing incentives to foreign creditors to inject funds to reorganize businesses. By Kitipong Urapeepatanapong, Sawanee Sethsathira and Chirachai Okanurak of Baker & McKenzie, Bangkok Law firms adjust to Asian economic troubles As capital markets, project finance and securities work dry up in Asia some law firms are concerned. Most are compensating by changing the emphasis of the work they offer. Some are even expanding. By Mairi MacLean of Baines Gwinner, London

Philippe Dewast, legal director at Eurotunnel, Calais, talks to Nick Ferguson

Thailand’s new Bankruptcy Act should protect insolvent companies while providing incentives to foreign creditors to inject funds to reorganize businesses. By Kitipong Urapeepatanapong, Sawanee Sethsathira and Chirachai Okanurak of Baker & McKenzie, Bangkok