Resolution

1.

A formal decision of a body such as a board of directors, recorded in writing.

2.

Bank resolution.

The special process of resolving the problem of the actual or threatened insolvency of financial firms.

The speed with which value destruction occurs in a failing financial firm means that normal corporate insolvency processes and liquidation are inappropriate for such firms.

As in normal insolvency, losses will be expected for some creditors.

Resolution is the orderly failure of a firm, under the control of the resolution authority.

Contrast with ‘recovery’ in which a financial firm facing difficulties is returned to acceptable financial health without imposing losses on the distressed firm's creditors.

3.

Non-financial firms.

Similar processes for resolving the problem of actual or threatened insolvency of a non-financial firm.

Reverse takeover

"I joined Gala Coral Group, which was a high-leveraged private equity (PE) business.

This was my first group treasurer position supporting the resolution of a defaulted propco structure, the disposal of the Gala Bingo business and PE exit scenarios, including the eventual reverse takeover of Ladbrokes."

Adam Richford FCA FCT, Group Treasurer, Renewi, The Treasurer, August 2018, p17.

See also

• Bailin
• Board resolution
• Default
• Directive
• Exit
• Financial stability
• Insolvency
• Key Attributes
• Leverage
• Liquidation and Payout
• OLA
• Private equity
• Propco
• Purchase and Assumption
• Recovery
• Resolution Authority
• Resolution plan
• Resolution weekend
• Reverse takeover
• RRP

Other links

The Bank of England's approach to resolution