The Pugachev tale

The Supreme Court recently heard arguments in a patent dispute case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC. Although the case has nothing to do with bankruptcy law, its outcome could have a substantial impact on bankruptcy practice and litigation.

October 2017

INSURE

InSure

This month's roundup of developments affecting the insurance industry sees ECON calling on the European Commission to postpone the application date of the IDD, EIOPA issuing final guidelines on complex insurance-based investment products under the IDD and the European Commission releasing a report on consumers' decision-making process in insurance services.

General Update

It is now clear that the Pensions Regulator will take a much tougher approach in future towards employers and scheme funding. The new approach comes after a select committee of MPs looking into the BHS collapse criticised the Regulator for being reactive, slow-moving and reluctant to exercise its powers.

The two key areas where we expect the Regulator to be more aggressive are scheme funding and "moral hazard" powers.

BANKING

ECON votes to adopt draft report on proposed BRRD Insolvency Hierarchy Directive

The Supreme Court two years ago ruled in Baker Botts v. Asarco that bankruptcy professionals entitled to compensation from a debtor’s bankruptcy estate had no statutory right to be compensated for time spent defending against objections to their fee applications.

The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized in bankruptcy as a capital contribution and treated as equity. The case raises important questions about the extent to which the commencement of a proceeding under the U.S.

The Technology and Construction Court in England has refused pre-action disclosure of the insurance policy of a currently solvent insured, notwithstanding that a successful claim would have resulted in the insolvency of the insured.

Factual background

In Millenium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional authority to release claims against non-debtor third parties under the plan.

Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware handed down an important ruling last week that turned aside most of an unusual challenge to the fees and expenses of an indenture trustee in the long-running Nortel chapter 11 case. The dispute has been watched closely by financial institutions that serve as trustees on bond issuances. (Kelley Drye & Warren LLP represented a large creditor in the Nortel case but took no part in the issues discussed here).