As Andrew Jones and Daniela Miklova report, the recent case of Ristorante Limited t/a Bar Massimo v Zurich Insurance plc [2021] EWHC 2538 is a useful insight into how the Court will interpret the questions and answers in insurers’ proposal forms in coverage disputes. It also shows how insurers can lose potential policy defences through the drafting of proposal form questions going wrong.

It has long been the law that creditors are rarely entitled to contractually prohibit a debtor from filing for bankruptcy, whether such restriction is contained in the debt instruments or in the corporate governance documents. In contrast, governance provisions which condition a bankruptcy filing on the vote or consent of certain equity holders that are unaffiliated with any creditor are frequently enforced. Many equity sponsors, for example, wear two hats: they are both shareholders and lenders to their portfolio companies.

The Court of Appeal raises the bar for insolvent claimants on security for costs

In Nortel Networks, Inc., Case No. 09-0138(KG), Doc. No. 18001 (March 8, 2017), the Delaware Bankruptcy Court ruled on the objections of two noteholders who asked the Court to disallow more than $4.4 million of the $8.1 million of the fees sought by counsel to their indenture trustee. Given the detailed rulings announced by the Court, the decision may establish a number of guidelines by which future fee requests made by an indenture trustee’s professionals will be measured.

Matters Handled by the UCC

“The question that he frames in all but words

Is what to make of a diminished thing.”

                             Robert Frost, “The Oven Bird”

In a significant expansion of the potential risk for distressed claims traders, the Delaware bankruptcy court has recently ruled¹ that traders who engage in insider trading may have their claims subordinated to equity, and that traders who amass claims sufficient to block a plan of reorganization owe fiduciary duties to all other creditors and shareholders during plan negotiations.

On Friday, the Ohio Division of Financial Institutions closed Bramble Savings Bank, headquartered in Milford, Ohio, and appointed the FDIC as receiver for the bank. As receiver, the FDIC entered into a purchase and assumption agreement with Foundation Bank, headquartered in Cincinnati, Ohio, to assume all of the deposits of Bramble Savings Bank.

On Friday, the Office of Thrift Supervision closed Maritime Savings Bank, headquartered in West Allis, Wisconsin, and appointed the FDIC as receiver for the bank.

On Friday, the Georgia Department of Banking and Finance closed Bank of Ellijay, headquartered in Ellijay, Georgia, First Commerce Community Bank, headquartered in Douglasville, Georgia, and The Peoples Bank, headquartered in Winder, Georgia, and appointed the FDIC as receiver for each bank. The failed banks were not affiliated with one another.

On Friday, the New Jersey Department of Banking and Insurance closed ISN Bank, headquartered in Cherry Hill, New Jersey, and appointed the FDIC as receiver for the bank.