The Federal Trade Commission Premerger Notification Office (“PNO”) recently issued updated guidance regarding how the PNO will interpret and apply going forward the exemption for investment rental property set forth in 16 C.F.R. § 802.5 of the regulations promulgated under the Hart-Scott-Rodino Antitrust Improvements (“HSR”) Act. This guidance supersedes all prior informal interpretations and advice issued by the PNO regarding Rule 802.5. Read more

The Offshore Case Digest offers readers a high level summary of the major commercial cases decided in Bermuda, the British Virgin Islands and the Cayman Islands between November 2014 and February 2015. Our goal is to provide a useful reference tool for clients and practitioners who are interested in the development of case law in each jurisdiction.

On 30 March 2015, the Cayman Islands Monetary Authority (“CIMA”) issued the Rule on Cancellation of Licence or Certificate of Registration of Regulated Mutual Funds (the “Rule”), click here for link to the Rule, and Regulatory Procedure for Cancellation of Licences issued pursuant to Section 5 and Certificates of Registration issued pursuant to Sections 4(3) and 4(1)(B) of the Mutual Funds Law (the “Regulatory Procedure”), click here for link to the Regulatory Procedure.

On July 13, 2015, Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York issued a decision recognizing the Brazilian bankruptcy proceedings of OAS S.A. and certain of its affiliates as a foreign main proceeding under chapter 15 of the U.S. Bankruptcy Code. In re OAS S.A., Case No. 15-10937 (SMB), 2015 WL 4197076 (Bankr. S.D.N.Y. July 13, 2015) (the “Decision”).

Despite their many financial challenges, local governments rarely seek solutions in bankruptcy court. In fact, there have been approximately 640 municipal bankruptcies in the U.S. since 1937, when the current law was enacted. As a result, the bankruptcy of the City of Detroit — once the nation’s fourth largest City and symbol of U.S. industrial might, was more than unusual. It was shocking. How could the home of the mighty American automobile industry fail? Astounding as the bankruptcy was, its reasons were apparent and long in coming.

Cayman Islands based investment funds and investment managers are regulated by the Cayman Islands Monetary Authority ("CIMA") under the Mutual Funds Law ("MFL") and Securities Investment Business Law ("SIBL") respectively. The Cayman Islands government has recently proposed amendments to these laws in order to create a Cayman Islands regulatory regime which is consistent with the standards of regulation under the Alternative Investment Fund Manager Directive ("AIFMD").

A trade creditor who supplies goods to a company that files for bankruptcy should seek to enforce certain rights in the Chapter 11 case. For instance, the Bankruptcy Code Section 546(c) preserves a creditor’s right of reclamation under state law. The applicable state law statute concerning reclamation is Uniform Commercial Code Section 2-702. The two statutes together permit a supplier of goods to reclaim goods provided to an insolvent debtor in the ordinary course of the debtor’s business when such goods are identifiable.

Puerto Rico encountered another roadblock in its efforts to resolve its looming debt crisis on July 6, 2015, when the U.S. Court of Appeals for the First Circuit affirmed the decision of the District of Puerto Rico that Puerto Rico’s Debt Enforcement and Recovery Act (the “Recovery Act”) is unconstitutional and permanently enjoined its enforcement.1 The Recovery Act, enacted in June 2014, created a bankruptcy-like regime through which select Puerto Rican public corporations could restructure their debt obligations without unanimous creditor consent.

On July 7, 2015, the United States Court of Appeals for the Seventh Circuit issued a decision affirming the dismissal of a bankruptcy trustee’s Illinois law accounting malpractice claims against the investment funds’ pre-bankruptcy auditor on the grounds of in pari delicto. Peterson v. McGladrey LLP, No. 14-1986, 2015 WL 4092300 (7th Cir. July 7, 2015).

This briefing provides an overview of the British Virgin Islands (“BVI”) restricted purposes company, a vehicle specifically designed for securitizations and other transactions where an insolvency-remote vehicle is required. A key principle underpinning BVI company law is transactional certainty and the protection of third parties. A third party who transacts with a BVI business company can generally be confident of the validity of the transaction and that it will not be set aside as a result of a lack of capacity, power or authority of the company.