The High Court has recently expressed concern that distressed borrowers are being duped into paying money to the anonymous promoters of schemes, which purport to protect them from enforcement by lenders but are actually ‘utterly misguided and spurious’.
There are a number of schemes being promoted at the moment that supposedly protect borrowers in arrears from enforcement by their lender.
In less than a week after its bankruptcy filing, a debtor was able to obtain confirmation of its prepackaged plan of reorganization in the Bankruptcy Court for the Southern District of New York. In allowing the case to be confirmed on a compressed timeframe that was unprecedented for cases filed in the Southern District of New York, the Bankruptcy Court held that the 28-day notice period for confirmation of a chapter 11 plan could run coextensively with the period under which creditor votes on the plan were solicited prior to the commencement of the bankruptcy case.
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 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
Two recent judgments have brought further clarity in relation to the rights acquirers of loan portfolios to enforce against borrowers:
In AIB Mortgage Bank -v- O'Toole & anor [2016] IEHC 368 the High Court determined that a bank was not prevented from relying on a mortgage as security for all sums due by the defendants, despite issuing a redemption statement which omitted this fact.
In order to understand this case, it is necessary to set out the chronology of events:
In its recently issued decision in Husky International Electronics, Inc. v. Ritz, a 7-1 majority of the Supreme Court has clarified that intentionally fraudulent transfers designed to hinder or defraud creditors can fall within the definition of “actual fraud” under Section 523(a)(2)(A) of the Bankruptcy Code and can sometimes result in corresponding liabilities being non-dischargeable in a personal bankruptcy proceeding.1
In a March 29, 2016 decision,1 the United States Court of Appeals for the Second Circuit (the "Court of Appeals") held that creditors are preempted from asserting state law constructive fraudulent conveyance claims by virtue of the Bankruptcy Code's "safe harbors" that, among other things, exempt transfers made in connection with a contract for the purchase, sale or loan of a security (here, in the context of a leveraged buyout ("LBO")), from being clawed back into the bankruptcy estate for distribution to creditors.
Bankruptcy law in Ireland is now, broadly speaking, in line with that of the United Kingdom.
In particular, for bankrupts who cooperate with the bankruptcy process:
- bankruptcy will end in one year; and
- their interest in their family home will re-vest in them after 3 years.
Notably however, the courts will have discretion to extend the period of bankruptcy for up to 15 years for non-cooperative individuals and those who have concealed or transferred assets to the detriment of creditors.
On January 4, 2016, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) deviated from SDNY precedent and held that, despite the absence of clear Congressional intent, the avoidance powers provided for under Section 548 of the Bankruptcy Code can be applied extraterritorially. As a result, a fraudulent transfer of property of a debtor’s estate that occurs outside of the United States can be recovered under Section 550 of the Bankruptcy Code.