Firm Articles | Global Insolvency

Courts in New York and Singapore reach opposite conclusions on the validity of interpleader applications arising out of the OW Bunker bankruptcy

10 July 2015

On 7 November 2014, OW Bunker A/S (“OW”), a global supplier and trader of marine fuel, filed for bankruptcy in Denmark. Further bankruptcies of OW subsidiaries and affiliates swiftly followed, including the bankruptcy of certain U.S. and Singapore-based OW entities.

Singapore, USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Injunction

Delaware Supreme Court holds creditors of insolvent LLCs do not have derivative standing

15 March 2012

CML V, LLC v. Bax, et al., 2011 Del. LEXIS 480 (Del. Sept. 2, 2011)

CASE SNAPSHOT

Affirming the decision of the Court of Chancery for the State of Delaware, the Delaware Supreme Court held that, unlike corporate creditors, creditors of a Delaware Limited Liability Company do not have standing to sue the LLC’s officers derivatively on behalf of an insolvent LLC.

FACTUAL BACKGROUND

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Limited liability company, Standing (law), Balance sheet, Internal control, Derivative suit, Court of Chancery, Delaware Supreme Court, Court of equity

Court finds defendants knowingly waived right to jury trial, affirms such waivers must be clear

19 December 2011

Lehman Brothers Holdings, Inc. v. Bethany Holdings Group, LLC, et al., 2011 WL 3427013, (S.D.N.Y. Aug. 5, 2011)

CASE SNAPSHOT

USA, Banking, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Surety, Waiver, Jury trial, Default (finance), Lehman Brothers

In a case of first impression, court grants administrative priority status to post-petition withdrawal liability

19 December 2011

In re Marcal Paper Mills, Inc., No. 09-4574, 650 F.3d 311 (3d Cir., 2011)

CASE SNAPSHOT

USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Reed Smith LLP, Employee Retirement Income Security Act 1974 (USA), Defined benefit pension plan, Third Circuit

Director’s motion to dismiss breach of duty of good faith claim denied

14 September 2011

NHB Assignments, LLC v. General Atlantic, LLC and Braden Kelly (In re PMTS Liquidating Corp., et al.) Case No. 08-11551 (BLS) (Bankr. D. Del. July 1, 2011)

CASE SNAPSHOT

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Breach of contract, Fraud, Fiduciary, Board of directors, Interest, Limited liability company, Liquidation, Good faith, Due diligence, Title 11 of the US Code, Chief executive officer, Trustee

Credit swap agreement ipso facto clause struck

14 September 2011

Lehman Brothers Special Financing, Inc. v. Ballyrock ABS-CDO 2007-1 Limited (In re Lehman Brothers Holdings, Inc.) No. 09-01032 (JMP) (Bankr. S.D.N.Y. May 12, 2011)

CASE SNAPSHOT

USA, New York, Derivatives, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Surety, Debtor, Injunction, Swap (finance), Liquidation, Asset forfeiture, Default (finance), Collateralized debt obligation, Mortgage-backed security, Right to property, Lehman Brothers, US District Court for the Southern District of New York

FAA registration law does not preempt state UCC where partially completed airplanes fail to satisfy FAA definition of “aircraft”

15 June 2011

Mata, et al., v. Eclipse Aerospace, Inc. (In re AE Liquidation, Inc., et al.) Case No. 08-51891, 2011 BL 51047 (Bankr. D. Del. Feb. 28, 2011)

CASE SNAPSHOT

USA, Delaware, Aviation, Insolvency & Restructuring, Litigation, Reed Smith LLP, Federal preemption, Debtor, Breach of contract, Fraud, Liquidation, Aircraft registration, Constructive trust, Federal Aviation Administration, Uniform Commercial Code (USA), Trustee, United States bankruptcy court

Section 2(a)(iii) of the ISDA Master Agreement, similar clauses and insolvency

11 November 2010

There have been so many articles written and opinions expressed on the spate of cases on the effect of how netting provisions in over-the-counter ("OTC") derivative contracts work when a counterparty becomes in default, that you would be forgiven for being confused about the current position. Now that the dust has settled (for the time being at least), this article takes stock and seeks to make matters as straightforward as possible.

United Kingdom, USA, Derivatives, Insolvency & Restructuring, Reed Smith LLP, Bankruptcy, Collateral (finance), Over-the-counter (finance), Debt, Foreclosure, Default (finance), Lehman Brothers

US Bankruptcy Court limits ISDA counterparty rights upon a bankruptcy event of default

25 June 2010

In re Lehman Brothers Holdings, Inc., Case No. 08-13555 et seq. (JMP)(jointly administered)

In this US decision, the Bankruptcy Court held that the "safe harbour" protections of the US Bankruptcy Code only protect a non-defaulting party's right to liquidate, terminate or accelerate a swap, to offset and to net termination values and payment amounts and to foreclose on collateral, but do not permit the withholding of performance under a swap if the swap is not terminated.