The recent Court of Appeal decision inLBI EHF v Raiffeisen Bank International AG [2018] EWCA Civ 719 affirms the wide discretion of the non-Defaulting Party to determine "fair market value" in accordance with the close-out mechanism under paragraph 10(e)(ii) of the standard Global Master Repurchase Agreement (2000 version) ("GMRA").
The Facts
This case involves an application brought by the trustee in the bankruptcy of Harlequin Property SVG Ltd (the "Company"), property developers incorporated under the laws of St. Vincent and the Grenadines ("SVG"). The Company's main asset was a property in SVG, the construction of which was funded by more than 1,900 deposits from individual investors. However, only 116 units were completed.
Lord Bannatyne has issued his opinion in respect the Note of The Provisional/Interim Liquidator of Equal Exchange Trading Limited [2018] CSOH 35 which gives guidance in respect of the role of the court reporter when fixing the remuneration of a liquidator. The full opinion can be viewed here.
Background
The UK's corporate governance regime has been stress-tested in the past decade and in many respects it has done well. However, in response to certain high profile corporate collapses which have caused heavy losses for creditors, in particular individuals and suppliers with little opportunity to protect themselves against losses, and in the spirit of continual improvement, the government has recently launched its "Insolvency and Corporate Governance Consultation".
In the recent decision in LBI EHF v. Raiffeisen Bank International AG [2018] EWCA Civ 719, the Court of Appeal has considered the close-out valuation provisions for "repo" trades entered into under a Global Master Repurchase Agreement (2000 edition). The court refused to limit the wide discretion given to a non-defaulting party to determine fair market value under the GMRA.
The factual background
Following the liquidation of BHS Ltd, the High Court was asked to consider whether a landlord could claim full rent as an administration expense following termination of the CVA.
Background
Wright and another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd concerned three principal insolvency processes applicable to companies under the Insolvency Act 1986:
We closed the first quarter of 2018 following a period of intense scrutiny on the restructuring and insolvency profession. The stress in the retail and dining sectors, the increase in CVAs and the various attendances of stakeholders in the profession before Select Committees has been the forerunner to two consultation papers.
At a time when the actions of directors, both collectively and individually, have received considerable attention in both the academic and public press, the need for directors to understand their duties, and the steps that can be taken to fulfill their obligations and minimise potential liabilities, becomes especially important.
This article considers:
Carillion, the UK’s second largest construction company, entered compulsory liquidation on 15 January 2018, with estimated debts of £1.5bn and a pension deficient of c£800m, following three profit warnings in 2017. The company employs 20,000 people in the UK and 43,000 people worldwide. It is thought that some 30,000 companies may be affected by the liquidation.
Administrators are statutorily entitled to require a receiver to vacate office (paragraph 41 Schedule B1 Insolvency Act 1986 (“Schedule B1”)). In Promontoria (Chestnut) Ltd vCraig and another [2017] EWHC 2405 (Ch) they did just that, taking steps to remove existing receivers not long after their appointment, claiming the action to be in the interests of all the creditors. On the facts, that decision was not only unreasonable but costs were also awarded personally against the administrators.
Brief facts and arguments