In a landmark judgment on 9 September 2016, the High Court of Singapore exercised its inherent jurisdiction to grant, on an ex parte basis, interim orders for the recognition of the Hanjin Shipping Co Ltd (Hanjin Shipping) Korean rehabilitation proceedings in Singapore.

This is a follow-up to our previous client update on Swiber Holdings Limited written on 29 July 2016. To view our previous update, please click here.

Counterparties of Swiber Holdings Limited ("Swiber") and its group companies would do well to keep a close tab on any debts outstanding from the group.

Swiber, an SGX-listed company in the oil fields services sector, issued an announcement in the early hours of Thursday 28 July 2016 stating that it filed an application in the Singapore High Court for a voluntary winding up on Wednesday afternoon, together with an application to place the company under provisional liquidation.

On 27 May 2016, South Korea's STX Offshore & Shipbuilding Co. ("STX OS"), once the country's fourth-largest shipbuilding firm by revenue, filed for court-supervised rehabilitation, in the Seoul Central District Court.

Overview

The IMF, in a January 2016 update to its World Economic Outlook, revised its global growth projections for 2016 and 2017 down by 0.2%, citing a decline in emerging markets' growth and lower prices for energy and other commodities.^[1]

With the trough in the global economy set to continue, there is unlikely to be any respite for the marine and trade industries, where counterparty insolvency will become more prevalent. 

The U.S. Court of Appeals for the Seventh Circuit in Chicago has issued a decision with significant implications for licensees of trademarks whose licensors become debtors in bankruptcy. In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, the Court considered whether rejection of a trademark license in bankruptcy deprives the licensee of the right to use the licensed mark.¹ Disagreeing with the holding of the Court of Appeals for the Fourth Circuit in Lubrizol Enterprises, Inc. v.

The Trustee overseeing the liquidation under the Securities Investor Protection Act (“SIPA”) of Lehman Brothers Inc. (“Lehman”) in the U.S. and the Joint Administrator of Lehman Brothers International (Europe) (“LB Europe”) in the U.K. have reached an agreement in principle to resolve $38 billion in asserted claims among Lehman, LB Europe and subsidiaries and affiliates. The agreement is subject to definitive documentation and approval by the Bankruptcy Court in New York and the English High Court. The parties set December 15, 2012 as the deadline to reach a final agreement.

In the Summer 2009 issue of the Legal Canvas, we wrote about the wisdom of filing a UCC financing statement when art work is consigned to a gallery. Specifically, we said that the filing of a financing statement that reflects the consignor’s interest in the work provides protection against the gallery’s creditors. Financing statements take no time to prepare and cost less than $50 to file.

It could be money well spent.

U.S. bankruptcy law permits debtors-in-possession and trustees to sell assets free and clear of claims, liens and other interests. But a federal judge in New York ruled recently that a purchaser does not necessarily buy free and clear when a product manufactured pre-bankruptcy causes injury after a sale closes. Morgan Olson L.L.C. v. Frederico (In re Grumman Olson Indus., Inc.), No. 11 Civ. 2291, 2012 U.S. Dist. LEXIS 44314 (S.D.N.Y. Mar. 29, 2012) (JPO). In this situation, the purchaser can remain liable for injuries caused by the asset purchased from the debtor.

LEHMAN BANKRUPTCY

In re: Lehman Brothers Holdings, Inc., et al., No. 08-13555

On March 6, 2012, Lehman Brothers Holdings Inc. and its affiliated debtors announced that their Modified Third Amended Joint Chapter 11 Plan, which had been confirmed by the United States Bankruptcy Court for the Southern District of New York on December 6, 2011, had become effective. Distributions under the Plan will begin on April 17, 2012.