Global Insolvency | Daily News Headlines on Insolvency Developments across the Globe

We are seeing more and more challenges by borrowers to swaps. No big surprise since, with falling interest rates over the past few years, the borrowers are on the wrong end of the transactions. Although swaps are considered independent of the loans, they are often secured by the same collateral and are usually crossdefaulted with the loans, so the obligations that arise from early termination (which can be significant) become part of the collection process and are being fought vigorously by borrowers.

Filed under:

USA, Banking, Derivatives, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Collateral (finance), Limited liability company, Swap (finance), Mortgage loan, Foreclosure, Secured loan

Authors:

Peter S. Clark, II

Location:

USA

Firm:

Reed Smith LLP

Delaware Bankruptcy Court sheds light on the common interest doctrine preventing the waiver of privileged communications

2010-12-01

In re Leslie Controls, Inc., (Bankr. D. Del., Case No. 10-12199, 2010)

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Filed under:

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Waiver, Interest, Work-product doctrine, Attorney-client privilege, Discovery, Liability (financial accounting), Delaware Supreme Court, United States bankruptcy court

Authors:

Brian M. Rostocki

Location:

USA

Firm:

Reed Smith LLP

Trustee’s use of strong-arm powers limited where state ucc gives priority to the lender that perfects its lien post-petition

2010-12-01

Sovereign Bank v Hepner (In re Roser), 613 F.3d 1240 (10th Cir. 2010).

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Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Conflict of laws, Debtor, Collateral (finance), Interest, Secured loan, Title 11 of the US Code, Uniform Commercial Code (USA), Trustee, United States bankruptcy court, Tenth Circuit

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

Omission of plat in a mortgage renders its recording a nullity, provides no notice to the trustee and subjects the mortgage to avoidance

2010-12-01

Wells Fargo Home Mortgage, Inc. v Richardson (In re Brandt), 434 B.R. 493 (W.D. Mich. 2010)

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Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Mortgage loan, Conveyancing, Constructive notice, Wells Fargo, Trustee

Authors:

Brian M. Schenker

Location:

USA

Firm:

Reed Smith LLP

Consideration of a TRAC clause under the UCC and economic realities required to determine if equipment leases are true leases or disguised financing

2010-12-01

Hitchin Post Steak Co v General Electric Capital Corporation (In re HP Distribution, LLP), 436 B.R. 679 (Bankr. D. Kan. 2010)

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The United States Bankruptcy Court for the District of Kansas considered whether commercial vehicle leases that contained Terminal Rental Adjustment Clauses (or TRAC provisions) were true leases under Section 365 of the Bankruptcy Code or, instead, disguised financing transactions. The court held that the TRAC leases were true leases that must be either assumed or assigned pursuant to the terms of Section 365.

Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Interest, Consideration, Liquidation, Bright-line rule, Uniform Commercial Code (USA), United States bankruptcy court

Authors:

Ann E. Pille

Location:

USA

Firm:

Reed Smith LLP

Compensation distributions triggered by events outside the debtor’s control are property of the estate and subject to avoidance

2010-12-01

Parks v. Dittmar (In re Dittmar), 618 F.3d 1199 (10th Cir. 2010)

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