On 16 March 2021, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin) declared Greensill Bank AG (Greensill) to be an indemnification case, meaning that German deposit insurance institutions can compensate the bank’s creditors.
BaFin had previously filed an insolvency petition against Greensill, and the insolvency court in Bremen opened insolvency proceedings on 16 March 2021. It appointed an insolvency administrator who is now responsible for managing Greensill’s affairs.
Business Secretary Alok Sharma has announced that the government will be introducing measures to “improve the legal options for companies running into major difficulties. The overriding objective is to help UK companies, which need to undergo a financial rescue or restructuring process, to keep trading. These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends”.1
The temporary amendments to the insolvency laws which are being considered include:
The new EU Directive on preventive restructuring frameworks1 was published in the Official Journal of the European Union on 26 June 2019 and entered into force on 16 July 2019. The objective of the Directive is to harmonize the laws and procedures of EU member states concerning preventive restructurings, insolvency and the discharge of debt.
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.
England has been the jurisdiction of choice for European restructurings. While other jurisdictions have sought to revamp their insolvency law in recent years in an effort to chip away at the English dominance in the restructuring arena, the lure of the tried and tested English legislation and judiciary means that the English system has remained dominant. In the wake of Brexit, will England lose its place as jurisdiction of choice?
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 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.
On 7 November 2014, OW Bunker A/S (“OW”), a global supplier and trader of marine fuel, filed for bankruptcy in Denmark. Further bankruptcies of OW subsidiaries and affiliates swiftly followed, including the bankruptcy of certain U.S. and Singapore-based OW entities.
There have been so many articles written and opinions expressed on the spate of cases on the effect of how netting provisions in over-the-counter ("OTC") derivative contracts work when a counterparty becomes in default, that you would be forgiven for being confused about the current position. Now that the dust has settled (for the time being at least), this article takes stock and seeks to make matters as straightforward as possible.
In re Lehman Brothers Holdings, Inc., Case No. 08-13555 et seq. (JMP)(jointly administered)
In this US decision, the Bankruptcy Court held that the "safe harbour" protections of the US Bankruptcy Code only protect a non-defaulting party's right to liquidate, terminate or accelerate a swap, to offset and to net termination values and payment amounts and to foreclose on collateral, but do not permit the withholding of performance under a swap if the swap is not terminated.