On March 22, 2017, the United States Supreme Court held that bankruptcy courts cannot approve a “structured dismissal”—a dismissal with special conditions or that does something other than restoring the “prepetition financial status quo”—providing for distributions that deviate from the Bankruptcy Code’s priority scheme absent the consent of affected creditors. Czyzewski v.Jevic Holding Corp., No. 15-649, 580 U.S. ___ (2017), 2017 WL 1066259, at *3 (Mar. 22, 2017).
On January 17, 2017, the Court of Appeals for the Second Circuit issued its long-anticipated opinion in Marblegate Asset Management, LLC v. Education Management Finance Corp., 1 ruling that Section 316(b) of the Trust Indenture Act of 1939, 15 U.S.C. § 77ppp(b) (the “Act”), prohibits only non-consensual amendments to core payment terms of bond indentures.
On 16 December 2016 an act amending the insolvency laws applicable to financial derivatives transactions passed the Bundesrat (the second chamber of the German legislature). The new law was finalised only six months after the German Federal Court of Justice passed its landmark judgment that held a netting provision based on the German Master Agreement for Financial Derivatives Transactions to be partially ineffective in the event of insolvency.
Recovery and resolution scenarios are still of importance for European institutions. Banks perform functions which are critical for economic activity to take place. They collect funds (deposits and other forms of debt) from private persons and businesses, provide loans for households and businesses, allow savings to be allocated for investment and manage payment systems that are crucial for various sectors of the economy and society as a whole.
The United States Court of Appeals for the Second Circuit recently articulated a standard to determine what claims may be barred against a purchaser of assets "free and clear" of claims pursuant to section 363(f) of the Bankruptcy Code and highlighted procedural due process concerns with respect to enforcement.1 The decision arose out of litigation regarding certain defects, including the well-known "ignition switch defect," affecting certain GM vehicles. GM's successor (which acquired GM's assets in a section 363 sale in 2009) asserted that a "free and clear" provisi
In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, "BGH") has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent that it deviates from section 104 of the German Insolvency Code.
On March 29, 2016, the Second Circuit addressed the breadth and application of the Bankruptcy Code's safe harbor provisions in an opinion that applied to two cases before it. The court analyzed whether: (i) the Bankruptcy Code's safe harbor provisions preempt individual creditors' state law fraudulent conveyance claims; and (ii) the automatic stay bars creditors from asserting such claims while the trustee is actively pursuing similar claims under the Bankruptcy Code. In In re Tribune Co.
Executive Summary The German banking market is on the move. This presents opportunities for foreign investors who would like to enter the German financial market. However, in order to acquire an interest in a German financial institution, i.e. credit or financial services institution, an investor has to comply with a couple of specific regulatory requirements.
On 12 February 2016, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, orBaFin) declared Maple Bank GmbH (“Maple”) as an indemnification case, meaning that the German deposit insurance institutions can compensate the bank’s creditors.
BaFin had previously filed an insolvency petition against Maple, and the insolvency court in Frankfurt am Main opened insolvency proceedings on 11 February 2016. It appointed an insolvency administrator who is now responsible for managing Maple’s affairs.
The District Court for the Central District of California recently held that an assignee that acquired rights to a terminated swap agreement was not a "swap participant" under the Bankruptcy Code and, therefore, could not invoke safe harbors based on that status to foreclose on collateral in the face of the automatic stay. [1] The court ruled that the assignee acquired only a right to collect payment under the swap agreement, not the assignor's rights under the Bankruptcy Code to exercise remedies without first seeking court approval.
Background