Key Point

The High Court has given some guidance on the effect of an order to restore a dissolved company to the register where a secured creditor has rights against that company and there has been a disclaimer by the Crown.

Facts

Is a debtor required to pay default rate interest when it reinstates a loan under a plan of reorganization? According to a recent Eleventh Circuit Court of Appeals decision, In re Sagamore Partners, Ltd., 2015 U.S. App. LEXIS 15382 (Aug. 31, 2015), the answer depends upon the underlying loan documents and applicable non-bankruptcy law.

An important decision was issued last week by the Bankruptcy Court for the District of Delaware in favor of Squire Patton Boggs’ client CCA Bahamas, Inc. (“CCA Bahamas”). The decision provides guidance on when U.S. bankruptcy courts should dismiss cases filed by foreign debtors. See In re Northshore Mainland Services, Inc., et al., Case No. 15-11402 (KJC).

Key point

The Joint special administrators of an investment banking entity succeed in obtaining a direction to allow them to distribute client assets quickly.

Facts

The courts continue to pick away at the “unfinished business rule.” The latest blow came earlier this month when a U.S. district court dismissed a Chapter 7 trustee’s claims against eight law firms who provided services to former clients of Howrey LLP. We are getting close to the point where the unfinished business rule may in fact be finished.

Key point

The Court of Appeal has recently given detailed guidance on what happens to the surpluses available in the insolvency of companies after dealing with an appeal in relation to the so-called Lehman Waterfall Application dealt with in an earlier Update.

Facts

How far do the Bankruptcy Code’s “safe harbor” provisions extend in the commercial mortgage-backed securitization (CMBS) market? Do these safe harbor provisions protect financial institutions that act merely as conduits for CMBS payments? These questions were addressed recently by the Northern District of Illinois District Court, and the court’s decision provides ammunition for CMBS investors in clawback claims brought by a bankruptcy trustee.

Key Point

The ECJ has outlined how the protection afforded to a counterparty by Article 13 of the European Insolvency regulation works where an insolvency officeholder challenges a transaction governed by a law different from the one which applies to the insolvency of the estate generally.

Facts

As we previewed last week, the U.S. Bankruptcy Court for the Southern District of New York recently handed General Motors (“New GM”) an enormous victory that may end up shielding the company from up to $10 billion in successor liability claims.

The bankruptcy court yesterday handed General Motors (New GM) an enormous victory that may end up shielding the company from up to $10 billion in potential legal liabilities. In his 138-page ruling, Bankruptcy Judge Robert Gerber held that a 2009 bankruptcy order allowing the sale of the assets of “old” General Motors (Old GM) to New GM shielded New GM from death and injury claims tied to defective ignition switches in older cars.