On March 22, 2017, the Supreme Court, in Czyzewski et al., v. Jevic Holding Corp., et al., confirmed that the Bankruptcy Code does not permit “priority skipping” in Chapter 11 structured dismissals. In doing so, the Court held that, although the Code does not explicitly provide what, if any, priority rules apply to the distribution of estate assets in a Chapter 11 structured dismissal, “[a] distribution scheme in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the . . .
Background
Any disposition of a company's property made after the commencement of its winding up, without the approval of the liquidator, is void. In a 2001 case (Re Industrial Services Company (Dublin) Ltd [2001] 2 I.R.118), the High Court held that the transfer by an account bank of monies from an in-credit account of a company in liquidation to third parties constituted a disposition and the bank could be liable to repay the value of such transfers despite not being aware of the winding up order for the Company.
William Fry understands that, on 30 January 2017, having regard for the recent implementation of the Solvency II regime, EIOPA's Board of Supervisors adopted a decision (the "Decision") which will replace EIOPA's General Protocol relating to the collaboration of the insurance supervisory authorities of the Member States of the European Union (March 2008 Edition).
We understand that the Decision with replace the General Protocol as of 1 May 2017 (and will be available on EIOPA's website shortly).
In the interim, the General Protocol (March 2008 Edition) continues to apply.
Reversing the lower courts, the Third Circuit Court of Appeals has today held that, under New York law (which governs 95% of all indentures), the early repayment of indenture notes in Chapter 11 is an optional redemption requiring the payment of make-whole notwithstanding the automatic acceleration of the notes due to the Chapter 11 filing. Delaware Trust Co. v. Energy Future Intermediate Holding Company LLC (In re Energy Future Holdings Corp.), Case No. 16-1251 (5th Cir. Nov. 17, 2016).
The Court of Appeal has overturned a High Court ruling from 2015 that a former director of a car dealership was personally liable to a customer who paid the company for three vehicles in the weeks prior to the company's liquidation where the cars were ultimately not delivered to the customer due to the company's liquidation.
Background
A declaration sought by the Liquidator of an insolvent company that certain payments made to a director constituted fraudulent preference has been refused by the High Court in FF Couriers Limited & Companies Acts: Keane -v- Day & ors [2016] IEHC
Prior to May 19, 2016, enforcing security against a financially-troubled O&G borrower in Alberta was a difficult proposition because the Alberta Energy Regulator (AER) had promulgated regulations to the effect that it would not license acquirers of producing wells unless potential environmental liabilities for the costs of abandonment, remediation and reclamation for non-producing wells were covered, either by the acquirer assuming the liabilities or posting the necessary R&R bonding.
Yesterday, Energy XXI Ltd. became the latest domestic oil and gas company to pursue a more deleveraged balance sheet via Chapter 11 restructuring. This does not come as a surprise to those following the company – for much of the last three months Energy XXI’s stock has been trading at less than $1.00 per share. According to the press release issued by the company, the filing comes after the company reached agreement with more than 63% of second lien note holders on the material terms of the restructuring.
A recent decision of the Court of Appeal has seemingly halted a trend towards leniency in the High Court in applications for the restriction and disqualification of directors of insolvent companies, particularly where the company has been struck off the register of companies for failing to file annual returns.