The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision).
The Cayman Islands Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding up petition, pursuant to section 99 of the Companies Law (2020 Revision) (the "Companies Law").
The Legal Issue of Principle
The United States Court of Appeals for the Third Circuit issued an opinion on December 24, 2019, In re Homebanc Mortgage Crop., No. 18-2887, 2019 WL 7161215(3rd Cir. De. 24, 2019) that has significant consequences for participants in repurchases transactions. The court affirmed the lower court judgment, that the securities had been liquidated in good faith.
Facts
Section 546(e) of the Bankruptcy Code is a safe harbor provision that establishes that a trustee or debtor-in-possession may not avoid a transfer “by or to... a financial institution.. in connection with a securities contract” other than under an intentional fraudulent conveyance theory. On December 19, 2019, the Second Circuit in Note Holders v.
In 2007, Philadelphia Entertainment and Development Partners, LP dba Foxwoods Casino Philadelphia (“Plaintiff”) secured a gaming license from Pennsylvania for $50,000,000 with the understanding that it open its casino business within one year. Plaintiff failed to do so and, despite a number of extensions, Pennsylvania cancelled and revoked the gaming license in December 2010. Without a gaming license, Plaintiff found itself in chapter 11 by spring of 2014.
Domestic Procedures
What are the principal insolvency procedures for companies in your jurisdiction? | Liquidation: voluntary and official. Cayman does not have an equivalent to the English concept of the company administration or to the Chapter 11 process in the United States. Schemes of Arrangement/“Soft Touch Liquidations” allow the company to enter into an agreement with its shareholders and/or creditors. |
The Bankruptcy Protector has previously provided a succinct summary of all cases decided post-Jevichere and
In In re FirstEnergy Solutions Corp., 2019 WL 6767004 (6th Cir. Ct. App.), the United States Court of Appeals affirmed in part, reversed in part, and remanded to the bankruptcy court for further consideration, the determination that the bankruptcy court held exclusive and unlimited jurisdiction and therefore could enjoin FERC from taking action regarding energy contracts because under the BJR they were financially burdensome on FES and as such could be rejected.
Facts
The First Circuit Court of Appeals issued an opinion on October 29, 2019, in In re TelexFree, LLC, No. 18-2001, 2019 WL 5558088, at *1 (1st Cir. Oct. 29, 2019) that has significant consequences for ponzi scheme litigation in bankruptcy court.
The TelexFree Ponzi Scheme and Related Bankruptcy Litigation