The peak indebtedness rule employed by liquidators to maximise recovery of unfair preference claims is abolished

The Colombian airline Aerovias Nacionales de Colombia S.A. – Avianca (“Avianca”) has made a habit of accessing the structured credit markets by monetizing its expected stream of credit card receivables, filing for U.S. Chapter 11 protection when in distress, and then challenging the structured credit agreements to which it had committed. Recently, Avianca reached a settlement with the lenders to its existing future flow receivables transaction, entered into in December 2017, which will result in a restructured loan facility.

A recent case in the NSW Court of Appeal clarifies the purpose, and limits, of a public examination summons

The PAS Group decision reaffirms the principle that rent incurred during the administration period takes priority in the winding-up payment waterfall

Antqip Hire highlights the importance of drafting a DOCA carefully, and properly communicating to creditors the commercial risks

The case of Antqip Hire was brought by the liquidators of two related entities (Antqip Pty Limited and Antqip Hire Pty Limited).

Orders were sought determining:

A voluntary administrator is often appointed by the company. The directors have a role in selecting the administrator; often the referral will come through one of the company’s advisers, such as the accountant or lawyer.

Supply chain finance products have a well-deserved reputation of being fairly low risk propositions. The majority of facilities are uncommitted, exposures are typically short-term and many counterparties are highly rated and well capitalized.

National Rugby League (NRL) was successful in setting aside a summons for public examination obtained by the liquidator of Newheadspace Pty Limited (Newheadspace). The Court also awarded NRL its costs. The Court found that the creditors’ voluntary winding-up of Newheadspace was an abuse of process, and that the summonses were obtained for an improper purpose.

Over the past several years, non-recourse receivables financing has been embraced by many major financial institutions and non-bank investors in the US market. With its (i) favorable regulatory treatment for regulated institutions, (ii) perceived positive risk/reward profile and (iii) adaptability to recent technological advancements such as distributed ledger technology (i.e., blockchain), non-recourse receivables financing likely will grow increasingly popular in the US market.

In In re Bernard L. Madoff Investment Securities LLC (“Madoff”),1 the United States Court of Appeals for the Second Circuit reaffirmed  its broad and literal interpretation of section 546(e) of the Bankruptcy Code, which provides a  safe harbor for transfers made in connection with a securities contract that might otherwise be  attacked as preferences or fraudulent transfers.