Second Circuit’s Quebecor bankruptcy decision offers comfort to capital markets participants that certain transactions will qualify for the Section 546(e) safe harbor.

On April 1, 2013, Judge Christopher Klein, Chief Judge of the United States Bankruptcy Court for the Eastern District of California, ruled that the City of Stockton, California, could proceed with its chapter 9 bankruptcy filing. Judge Klein’s decision affirmed Stockton’s status as the largest US city (population 300,000) to have successfully sought bankruptcy protection and proceed with bankruptcy.1 Judge Klein’s comments on the record may also signal that the resolution of Stockton’s chapter 9 will require the impairment of the city’s pension obligations.

Summary and implications

Almost exactly one year on from the Order* coming into force, many people remain unaware that it is no longer possible to appoint an administrative receiver over an overseas incorporated company.

Lenders and indeed insolvency practitioners should be aware that this is the case even when dealing with qualifying floating charges created before 15 September 2003 but alternative strategies, including administration, may be pursued to the same effect.

Administrative receivership