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Fulkoto: do liquidators have a power of sale in Queensland if they are a bare trustee?

Liquidators are commonly appointed to a company where, prior to liquidation the company was a trustee of a trust. Often when the liquidators are appointed, the company has ceased to be the trustee and a replacement trustee has not been appointed.

In these circumstances, the company in liquidation is a bare trustee in relation to the trust assets and the liquidator will assume this role until a replacement trustee is appointed. Often a replacement trustee is not appointed.

Does the liquidator as bare trustee have a power to sell trust assets?

Australia, Insolvency & Restructuring, Litigation, Private Client & Offshore Services, Cooper Grace Ward, Liquidator (law)
Secured creditor unsuccessful in challenging liquidator’s lien

Secured creditors should not allow a liquidator to sell a secured asset without first:

Australia, Insolvency & Restructuring, Litigation, Cooper Grace Ward, Liquidation, Secured creditor, Liquidator (law), Unsecured creditor
Second Circuit in AMR Corp. – “no make-whole” based on plain meaning of indentures and discusses consequences of section 1110 payments

The Bottom Line:

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bond (finance), Default (finance), Title 11 of the US Code, Second Circuit
Stay here – Second Circuit in Residential Capital holds automatic stay can be applied to non-debtors where action has an immediate adverse economic consequence for estate

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USA, Insolvency & Restructuring, Litigation, Real Estate, Kramer Levin Naftalis & Frankel LLP, Debtor, Mortgage-backed security, Federal Housing Finance Agency, Second Circuit, Fourth Circuit
Tarnishing the debtor’s Halo – police power exemption applied to private actions

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USA, Insolvency & Restructuring, Litigation, Telecoms, Kramer Levin Naftalis & Frankel LLP, Fifth Circuit
Giving credit when due -- Supreme Court denied confirmation of Chapter 11 plan that precludes credit bidding

The Bottom Line:

In a unanimous decision (with Justice Kennedy not participating), the Supreme Court issued a decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 2012 WL 1912197 (U.S. May 29, 2012), (“RadLAX”) in which it held that section 1129(b)(2)(A) of the Bankruptcy Code does not permit a debtor to “cram down” a plan of reorganization that provides for the sale of encumbered assets free and clear of liens at auction without permitting the lienholder to credit bid at such auction.

USA, Banking, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Debtor, Secured creditor, Title 11 of the US Code, Seventh Circuit
Seventh Circuit takes the long view in defining insider status for preference actions

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USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Debtor, Limited liability company, US Code, United States bankruptcy court, Seventh Circuit
Post-script – recent Enron “settlement payment” decision has first beneficiary

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USA, New York, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Unsecured debt, Security (finance), Default (finance), Subsidiary, Enron, Second Circuit, United States bankruptcy court, US District Court for the Southern District of New York
Now that’s settled – Second Circuit in Enron exempts redemption of commercial paper

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USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Debtor, Security (finance), Statutory interpretation, Safe harbor (law), Debt, Maturity (finance), Fair market value, Commercial paper, ING Group, Westlaw, Enron, US Code, Trustee, Second Circuit, United States bankruptcy court