CASE SNAPSHOT

CASE SNAPSHOT

In a case of first impression, the Fourth Circuit determined that broker commissions shown to be reasonable and customary parts of settling stock sales constitute "settlement payments" and that the payment of margin interest constitutes "margin payments" under section 546(e) of the Bankruptcy Code such that these types of payments are immune from avoidance and recovery by a bankruptcy trustee.

FACTUAL AND PROCEDURAL BACKGROUND

CASE SNAPSHOT

On April 16, 2013, in Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.),¹ the US Court of Appeals for the Second Circuit issued an important decision informing fundamental concepts of cross-border insolvency law as implemented pursuant to Chapter 15 of the Bankruptcy Code.

CASE SNAPSHOT

Under the 2000 version of the Global Master Repurchase Agreement (the "GMRA"), a standard form agreement produced by The Bond Market Association and the International Securities Market Association, an Event of Default occurs, and all outstanding transactions under the GMRA are accelerated immediately, upon:

Under the Global Master Repurchase Agreement (the "GMRA"), a standard form agreement produced by The Bond Market Association and the International Securities Market Association, all of the events of default (with one exception) require both (i) the occurrence of an event and (ii) service by the non-defaulting party of a default notice on the defaulting party.

This article was first published in The Bankruptcy Strategist

When a traditional nonbanking company files a case under the Bankruptcy Code, a judge is appointed to be the neutral arbiter of disputes that arise between the debtor and its creditors.

Introduction