The Land and Conveyancing Law Reform (Amendment) Bill 2019 (the “Bill”) proposes to broaden the factors that the courts can consider in refusing orders for possession sought by lenders.

The Bill has its roots in the Keeping People in their Homes Bill, 2018, introduced by Kevin “Boxer” Moran T.D., as a private member’s bill. However, the Bill does not go as far as Mr Moran’s bill and, for instance, does not require disclosure of the price paid by a purchaser of the loan.

Background

Overall 2018 has produced a number of positive judgments from the perspective of lenders and insolvency practitioners.

In particular, the courts delivered many useful judgments disposing of numerous challenges to the enforceability of loans and security and, also, restricting abuse of the courts’ processes.

Contemptuous McKenzie Friends

Must the legal owner of securitised debt and related security disclose in proceedings it brings that it is a bare trustee for the beneficial owner? In addition, is that trustee obliged to join the beneficial owner as a party to those proceedings?

New York Bankruptcy Judge Sean H. Lane determined that the Australian debtors in a Chapter 15 foreign recognition proceeding satisfied the U.S. property requirements of Section 109(a) of the Bankruptcy Code on the basis of attorney retainers and claims against insiders located in the U.S.

The Second Circuit recently issued its decision on an appeal to the Momentive Performance Materials Inc. (“MPM”) bankruptcy case. Amongst other issues, the Court found that when determining the appropriate interest rate in a Chapter 11 cramdown, courts should consider market factors rather than strictly apply the Till formula. The Court’s decision will benefit secured creditors when a market rate is ascertainable, as they will no longer have to accept below-market take-back debt.

Hogan Lovells partners Chris Donoho and Ron Silverman spoke to DebtWire Radio about current issues concerning cross-border restructurings. They addressed the factors that prompt foreign-based companies to avail themselves of the U.S. Bankruptcy Code in lieu of local insolvency proceedings. They also talked about the hurdles that such companies must overcome to secure a U.S. court’s administration of their Chapter 11 cases.

How does U.S. Chapter 11 law differ from other foreign insolvency regimes around the world?

Bond indentures and loan agreements often include make-whole provisions to provide protection to lenders and investors in the event of debt repayment prior to maturity. Make-whole provisions work to compensate the investor/lender for any future interest lost when the issuer/borrower repays the note prior to a specific date.

Simple retention of title clauses are commonplace and generally effective in contracts for the sale of goods. However, extending their effect to the proceeds of sale of such goods requires careful drafting.

The Court of Appeal has provided some further clarity around the creation and effects of fiduciary obligations in relation to such clauses.[1]

Proceeds of sale clauses

The Residential Tenancies (Amendment) Act 2015 has undoubtedly strengthened the position of tenants and increased the responsibilities and challenges facing receivers appointed by secured lenders over residential investment properties. While the added protections for tenants are to be welcomed, certain provisions of the Act result in relatively onerous obligations on receivers who are already faced with practical difficulties when seeking to deal with and realise the secured asset in accordance with their duties.

The High Court has reiterated that cross-examination will not generally be permitted on an interlocutory application, or where there is no conflict of fact on the affidavits.

In McCarthy v Murphy,^[1] the defendant mortgagor was not permitted to cross-examine the plaintiff (a receiver) or a bank employee who swore a supporting affidavit.

Background