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High Court finds borrower's security confers floating charge, despite intention of parties to create fixed charge and lender's contractual power to exercise control

The High Court has found that a borrower's debenture granted to a lender in respect of certain internet protocol (IP) addresses was a floating charge.

United Kingdom, Banking, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP
Court of Appeal confirms that the Quincecare duty does not extend to protect creditors

The Court of Appeal has struck out Quincecare duty and dishonest assistance claims brought by the liquidators of a company running a Ponzi scheme against a correspondent bank that operated various accounts for the company.

United Kingdom, Banking, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP
High Court clarifies calculation of Close-out Amount under 2002 ISDA Master Agreement

Lehman Brothers Special Financing Inc. v National Power Corporation & Anor [2018] EWHC 487 (Comm) is a significant case on the calculation of Close-out Amount under the 2002 ISDA Master Agreement.  

Two important points of principle arise from this judgment, which will have general application to transactions governed by the 2002 ISDA Master Agreement:  

United Kingdom, USA, Derivatives, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP
UAE Cabinet Approves Bankruptcy Reforms

The lack of a modern bankruptcy law, and possible criminal prosecution for debt default, has long been a major issue for entrepreneurs in many parts of the Middle East. That may all be about to change in the UAE as the Cabinet has approved a new draft Bankruptcy Law which aims to encourage foreign investment, boost investor confidence and assist SMEs in managing their business operations. That law is expected to be introduced in early 2017.

United Arab Emirates, Banking, Insolvency & Restructuring, Herbert Smith Freehills LLP
Court of Appeal holds that anti-deprivation principle does not apply to provisions relating to the termination of an IP licence on insolvency

The anti-deprivation principle provides that “there cannot be a valid contract that a man’s property shall remain his until his bankruptcy, and, on the happening of that event, go over to someone else, and be taken away from his creditors”.

United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Herbert Smith Freehills LLP, Share (finance), Bankruptcy, Breach of contract, Interest, Joint venture, Court of Appeal of England & Wales
Court of Appeal reverses earlier decision and holds that anti-deprivation principle does not apply to provisions relating to the termination of an IP licence on insolvency

In September 2009 we reported on the first instance decision in Butters and ors v BBC Worldwide Ltd and ors, accessible here in which the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors' access to assets and therefore contrary

United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Media & Entertainment, Herbert Smith Freehills LLP, Share (finance), Joint venture, Subsidiary, Court of Appeal of England & Wales
IP licences and insolvency - deprivation principle held to apply to provisions relating to the termination of an IP licence on insolvency

In Butters and ors v BBC Worldwide Ltd and ors, decided on 20 August 2009, the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors access to assets and therefore contrary to public policy in the light of insolvency laws.

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United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Herbert Smith Freehills LLP, Share (finance), Bankruptcy, Joint venture, Public limited company, Prejudice, Subsidiary