An important aspect of the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. §§ 2101–2241 ("PROMESA")—the temporary stay of creditor collection efforts that came into effect upon its enactment—was the subject of a ruling handed down by the U.S. Court of Appeals for the First Circuit. In Peaje Investments LLC v. García-Padilla, 845 F.3d 505 (1st Cir. 2017), the First Circuit affirmed in part and vacated in part a lower court order denying two motions for relief from the PROMESA stay.

Only a handful of courts have had an opportunity to address the ramifications of rejection of a trademark license since the U.S. Court of Appeals for the Seventh Circuit handed down its landmark decision in Sunbeam Prods., Inc. v. Chicago Am. Manuf., LLC, 686 F.3d 372 (7th Cir. 2012), cert. denied, 133 S. Ct. 790 (2012). A bankruptcy appellate panel for the First Circuit recently did so in Mission Prod. Holdings, Inc. v. Tempnology LLC (In re Tempnology LLC), 559 B.R. 809 (B.A.P. 1st Cir. 2016).

Simple retention of title clauses are commonplace and generally effective in contracts for the sale of goods. However, extending their effect to the proceeds of sale of such goods requires careful drafting.

The Court of Appeal has provided some further clarity around the creation and effects of fiduciary obligations in relation to such clauses.[1]

Proceeds of sale clauses

The Residential Tenancies (Amendment) Act 2015 has undoubtedly strengthened the position of tenants and increased the responsibilities and challenges facing receivers appointed by secured lenders over residential investment properties. While the added protections for tenants are to be welcomed, certain provisions of the Act result in relatively onerous obligations on receivers who are already faced with practical difficulties when seeking to deal with and realise the secured asset in accordance with their duties.

In Deutsche Bank Trust Co. Ams. v. Large Private Beneficial Owners (In re Tribune Co. Fraudulent Conveyance Litig.), 818 F.3d 98 (2d Cir. 2016), the U.S. Court of Appeals for the Second Circuit held that the “safe harbor” under section 546(e) of the Bankruptcy Code for settlement payments and for payments made in connection with securities contracts preempted claims under state law by creditors to avoid as fraudulent transfers pre-bankruptcy payments made to shareholders in connection with a leveraged buyout (“LBO”) of the debtor.

On June 13, 2016, the U.S. Supreme Court upheld lower court rulings declaring unconstitutional a 2014 Puerto Rico law, portions of which mirrored chapter 9 of the Bankruptcy Code, that would have allowed the commonwealth’s public instrumentalities to restructure a significant portion of Puerto Rico’s bond debt (widely reported to be as much as $72 billion). In Commonwealth v. Franklin Cal. Tax-Free Tr., 2016 BL 187308 (U.S.

The High Court has reiterated that cross-examination will not generally be permitted on an interlocutory application, or where there is no conflict of fact on the affidavits.

In McCarthy v Murphy,^[1] the defendant mortgagor was not permitted to cross-examine the plaintiff (a receiver) or a bank employee who swore a supporting affidavit.

Background

Two recent judgments have brought further clarity in relation to the rights acquirers of loan portfolios to enforce against borrowers:

In AIB Mortgage Bank -v- O'Toole & anor [2016] IEHC 368 the High Court determined that a bank was not prevented from relying on a mortgage as security for all sums due by the defendants, despite issuing a redemption statement which omitted this fact.

In order to understand this case, it is necessary to set out the chronology of events:

The European Court of Justice has held that a director of an English company can be liable for breach of German company law where insolvency proceedings are opened in Germany.