UK BlackRock Ruling Provides Clarity on Intraparty Loan Pacts

A recent UK court decision involving BlackRock Inc. provides companies with more clarity about structuring and documenting loan transactions with related entities.

The April 11 ruling from the UK Court of Appeal allowed BlackRock to rely on informal understandings or non-binding arrangements with connected parties when structuring intragroup loans. The decision allows more flexibility to businesses when demonstrating that the arrangements are at arm’s length—the requirement that a company’s internal transactions should be priced the same as those with outside parties.

“By allowing the net to be ‘cast very widely’—confirming that informal understandings or non-binding arrangements might be relied upon—businesses ...