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Update: ‘Control’ for UK Sanctions Addressed in Hellard Case

Asset freeze measures enacted by the United Kingdom against designated persons (DPs) can, under certain circumstances, extend to entities “owned or controlled” by DPs. To date, there have been few—and at times partly contradictory—English court cases addressing the “ownership and control” criteria under the UK sanctions regime. The latest judgment in Hellard v OJSC Rossiysky Kredit Bank sought to reconcile the previous guidance provided by the courts in the Mints and Litasco cases.

Russia, United Kingdom, Insolvency & Restructuring, Litigation, Trade & Customs, Morgan, Lewis & Bockius LLP, Anti-money laundering, Office of Financial Sanctions Implementation (UK)
Update: Russia Reintroduces Insolvency Moratorium

An insolvency moratorium first introduced during the COVID-19 pandemic applies to nearly all Russian legal entities, individuals, and sole entrepreneurs, and bans the commencement of insolvency proceedings against Russian obligors.

Russia, Insolvency & Restructuring, Morgan, Lewis & Bockius LLP, Coronavirus
Russia's COVID-19 Response: Moratorium on Bankruptcy and Freeze on Transactions

In response to the coronavirus (COVID-19) pandemic, Russia has changed its bankruptcy laws to provide for a moratorium on bankruptcies and a freeze on certain transactions. While the situation is dynamic, these amendments are relevant for ongoing or potential transactions in Russia, as well as a party’s ability to enforce pledges and other types of security interests or to seek other remedies against Russian companies.

Russia, Insolvency & Restructuring, Litigation, Morgan, Lewis & Bockius LLP, Coronavirus
Exit lenders liable for conversion where distributions contravene credit agreement

Prudential Insurance Company of America v. WestLB AG, 961 N.Y.S. 2d 360 (2012)

CASE SNAPSHOT

USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Credit (finance), Collateral (finance)
Seventh Circuit rules rejection of executory trademark license does not terminate the license, creates a split of authority

Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 686 F.3d 372 (7th Cir. 2012)

CASE SNAPSHOT

In a matter of first impression in the Seventh Circuit, the court held that a chapter 7 trustee’s rejection of an executory contract did not terminate the trademark license contained therein.

FACTUAL BACKGROUND

USA, Insolvency & Restructuring, Litigation, Trademarks, Reed Smith LLP, Bankruptcy, Seventh Circuit
Subtenant retains possessory rights under section 365(h) despite explicit free and clear section 363(f) sale

In re Zota Petroleums, LLC, 482 B.R. 154 (Bankr. E.D. Va. 2012)

CASE SNAPSHOT

USA, Virginia, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP
Determining whether a chapter 11 plan is unconfirmable without a confirmation hearing

In re American Capital Equipment, LLC, 688 F.3d 145 (3d Cir. 2012)

CASE SNAPSHOT

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Discovery, Due process, Leveraged buyout, Secured creditor, United States bankruptcy court, Third Circuit
Substantive consolidation order not automatically retroactive absent language to the contrary

Giuliano v. Shorenstein Company, LLC (In re Sunset Aviation, Inc.), Adv. No. 11- 50965, Bankr. No. 09-10778, 2011 WL 4002429 (Bankr. D. Del. Sept. 7, 2011)  

CASE SNAPSHOT

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Limited liability company, Ex post facto law, United States bankruptcy court, Sixth Circuit, US District Court for District of Delaware
Cross-affiliate netting provision in ISDA swap agreement is not enforceable against the debtor

In re Lehman Brothers Inc., Bankr. Case No. 08-01420 (JMP) (SIPA), 2011 WL 4553015 (Bankr. S.D.N.Y. Oct. 4, 2011)  

CASE SNAPSHOT

USA, Derivatives, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Debt, UBS, International Swaps and Derivatives Association, Lehman Brothers, Title 11 of the US Code, United States bankruptcy court
Split in courts continues—private stock purchase payments not protected by Section 546 safe harbor

Geltzer v. Mooney (In re MacMenamin’s Grill Ltd.), Adv. Case. No. 09-8266, Bankr. Case No. 08-23660, 2011 WL 1549056 (Bankr. S.D.N.Y. Apr. 21, 2011)

CASE SNAPSHOT

USA, New York, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Shareholder, Debtor, Security (finance), Fraud, Safe harbor (law), Writ, Leveraged buyout, Systemic risk, Secured loan, Title 11 of the US Code, Trustee, United States bankruptcy court