Although the concept dates back several decades, in recent years “gifting” plans have become popular vehicles for avoiding the Bankruptcy Code’s absolute priority rule: a portion of the senior creditor’s recovery is “gifted” to a more junior class (skipping intermediate class or classes) to gain the approval of stakeholders whose approval is strategically important, but who would otherwise receive no distribution under a plan. On February 7, 2011, the Second Circuit Court of Appeals in In re DBSD North America, Inc., declared that such a plan violated the absolute priority rule.

With businesses being rationalised and a still uncertain future, many tenants are increasingly looking to exit or reduce their leasehold liabilities. That means lease terminations, which in turn means dilapidations claims - Click here..

Companies with headquarters in such far-flung locales as Dubai, Mumbai and Shanghai are increasingly turning to the same place when hunting for new acquisitions: U.S. bankruptcy courts, Dow Jones Daily Bankruptcy Review reported. Whether it's ritzy resorts or a furniture retail chain, bankruptcy attorneys say the promise of quality assets available at cheap prices and cleansed of burdensome liabilities is luring more foreign companies to courtrooms in places like Manhattan and Wilmington, Del. "You have a process in the U.S.

The Bankruptcy Code sets forth the relative priority of claims against a debtor and the waterfall in which such claims are typically paid. In order for a court to confirm a plan over a dissenting class of creditors – what is commonly called a “cram-down” – the Bankruptcy Code demands that either (i) the dissenting class receives the full value of its claim, or (ii) no classes junior to that class receive any property under the plan on account of their junior claims or interests.

On February 7, 2011, in In re DBSD North America, Inc. (“DBSD”), the United States Court of Appeals for the Second Circuit held it was error for the bankruptcy court to confirm a Chapter 11 plan that provided for a “gift” from the debtor’s undersecured second-lien noteholders to the debtor’s existing equityholder.

In this feature, Christopher Russell and Michael Makridakis of the international law firm Ogier explore recent case law developments in the winding down of open-ended mutual funds in the Caymans. In what circumstances should the court intervene to impose a compulsory liquidation over a company in management wind down? This question has fallen for decision recently by the courts of the Cayman Islands, in a number of first instance decisions, in the context of open-ended mutual funds.

In a case of first impression, Lavie v. Ran (In re Ran), 607 F.3d 1017 (5th Cir. 2010), the Fifth Circuit denied a petition for recognition of an Israeli bankruptcy proceeding under chapter 15 for an individual debtor because it did not qualify as a foreign main or foreign nonmain proceeding. The court found that neither the debtor’s “center of main interest” (“COMI”) nor his “establishment” were located in Israel at the time the petition for recognition was filed.

In a recent decision, CML V, LLC v. Bax, et al., C.A. No 5373-VCL (Del. Ch. Nov. 3, 2010), the Delaware Court of Chancery held that, unlike Delaware corporations, creditors of an insolvent Delaware limited liability company cannot bring derivative actions against the members or managers of the company unless they specifically contract for such rights.

In Century Services Inc. v. Canada (Attorney General)1, released just before Christmas 2010, the Supreme Court of Canada overturned the prevailing case law that held that the deemed trust created in favour of the Crown under the Excise Tax Act (ETA) for collected but unremitted amounts of Goods and Services Tax/Harmonized Sales Tax (GST/HST) survived in the context of a Companies' Creditors Arrangement Act (CCAA) reorganization. The much-anticipated decision now establishes clearly that the Crown's GST/HST deemed trust priority is lost under the CCAA.

Introduction With renewed confidence in the economy and stock prices on the rise, 2011 is likely to usher in a host of mergers and acquisitions. Forbes.com recently proclaimed 2011 as "the year of M&A", projecting a 36% increase in M&A activity from that of 2010.(1) For companies, the predicted frenzy of M&A activity promises not only growth, but also legal risk. Without appropriate pre-acquisition due diligence, a company looking to acquire a strategic advantage may find that it has also acquired liability under the Foreign Corrupt Practices Act or other anti-corruption laws.