On 4 June 2015 the Cayman Islands Grand Court ruled in favour of Primeo Fund (Primeo), in the ongoing Representative Proceedings between Primeo and Herald Fund SPC (Herald). The Court had to construe section 37(7)(a) of the Companies Law. Although the Court's detailed reasons are still awaited, it is clear from the Court's decision that section 37(7)(a) does not apply to redeeming investors whose shares have been redeemed prior to the commencement of the liquidation.

On May 21, 2015, the United States Court of Appeals for the Third Circuit, in a 2-1 opinion, recognized a Chapter 11 bankruptcy case could be dismissed through a “structured dismissal” that deviates from the priority scheme set forth in Section 507 of the Bankruptcy Code.1 With its decision, the Third Circuit joined the Second Circuit in rejecting the Fifth Circuit’s per se exclusion on “structured dismissals” that deviate from the Bankruptcy Code’s prio

As the market for so-called “unitranche” credit facilities continues to increase, the Delaware Bankruptcy Court had an opportunity recently to answer positively the question of whether bankruptcy courts will enforce the Agreement Among Lenders (“AAL”) (a form of intercreditor agreement) used in such structures.

Strike off is the procedure of removing a company from the Register of Companies (the Register) following which the company will cease to exist.

Under the Companies (Guernsey) Law, 2008 (the Companies Law), a company may be struck off in one of three situations:

1. if the company is defunct;
2. if the company is defaulting; or
3. if the company itself applies to be voluntarily struck off.

Strike off by the Registrar of Companies

The Registrar of Companies (the Registrar) has the power pursuant to the Companies (Guernsey) Law, 2008 (the Companies Law) to strike off companies which are either defunct or defaulting.

Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15, 2015, two weeks after entering bankruptcy in Brazil. If “recognized” by Bankruptcy Judge Stuart Bernstein, the Chapter 15 petition would, among other things, essentially bind OAS creditors in the United States to the restructuring terms approved by the Brazilian court overseeing OAS’s reorganization.

On March 12, 2015, the United States Court of Appeals for the Eleventh Circuit affirmed the authority of a bankruptcy court to issue non-consensual, non-debtor releases in connection with the confirmation of a plan of reorganization.¹   With this decision, the Eleventh Circuit joined the majority view that such releases are permissible under certain circumstances.

Background

On January 21, 2015, the United States Court of Appeals for the Second Circuit entered an opinion holding that an authorized UCC-3 termination statement is effective, for purposes of Delaware’s Uniform Commercial Code (the “UCC”), to terminate the perfection of the underlying security interest even though the secured lender never intended to extinguish the security interest and mistakenly authorized the filing.¹

Background

On October 17, 2014, the Delaware Supreme Court entered an opinion holding that a UCC-3 termination statement that is authorized by the secured party is effective to terminate the original UCC filing even though the secured party did not actually intend to extinguish the underlying security interest.¹ Because the court determined that the relevant section of Delaware’s Uniform Commercial Code (the “UCC”) is unambiguous and

On October 16, 2014, the United States Court of Appeals for the Fifth Circuit entered an order requiring a real estate lender, First National Bank (the “Lender”), to refund certain mortgage payments it received from Protective Health Management (the “Debtor”), an affiliate of its borrower.¹   Because  the mortgage payments constituted actual fraudulent transfers, the Fifth Circuit held that the Lender could retain the payments only to the extent of  the value of the Debtor’s continued use of the property.²&