Two directors from the UK were disqualified for 12 years each after they used funds from existing clients to payback previous clients. The directors' company entered into loan agreements with existing clients worth around £9.1 million for forex trades, in return for interest and loan repayments. The Insolvency Service later discovered that at least £8.4 million was used to make interest and loan repayments to previous clients.

To anyone practicing bankruptcy law more than a month, the scenario of a lender secured by a lien against real property, as well as an assignment of rents (“AOR”) is pretty standard fare. Default on the debt occurs, threats (and counter threats) are tossed about, notices of foreclosure are filed (and perhaps receivership proceedings were begun), and the borrower files the inevitable bankruptcy proceeding where all is stayed to be dealt with under the watchful eye of the bankruptcy court.

Pension issues in the American Airlines (AMR) bankruptcy¹ have resulted in the Internal Revenue Service (IRS) issuing new final regulations, effective November 8, 2012 (Final Regulations), which broadly impact all debtors facing underfunded pension plan obligations. The Final Regulations provide chapter 11 bankruptcy debtors facing distress terminations of their tax-qualified defined benefit pension plans with the additional option of amending the plans to eliminate accelerated payment options.

The US Supreme Court has ruled in Stern v. Marshall (June 23, 2011) that a bankruptcy court lacks jurisdiction to render final judgment on a bankruptcy estate’s compulsory counterclaim against a creditor arising under common law, despite a statutory grant of jurisdiction.

The SFO has announced that managing director and shareholder of Alta Gas Plc, Peter Brian Bradley, has been ordered to pay £1 million compensation to victims following confiscation proceedings on 26 January 2010. In 2001, Alta Gas Plc went into administrative receivership which resulted in the receivers of the company discovering a sophisticated system of false accounts that enhanced the profitability of the company.