Bank of America N.A. v. Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. 439 B.R. 811 (2010) (U.S. Bankr. Ct., S.D.N.Y.)
The Alberta Court of Appeal recently denied an application by Celtic Exploration Ltd. ("Celtic") for leave to appeal a decision from a Companies’ Creditors Arrangements Act (Canada) ("CCAA") proceeding involving Celtic and SemCAMS ULC ("SemCAMS"). The CCAA court found that the parties’ gas purchase agreement had been suspended as of July 2008, and as a result, Celtic could not set off amounts it owed to SemCAMS after that date against indebtedness arising under the agreement.
In Century Services Inc. v. Canada (Attorney General)1, released just before Christmas 2010, the Supreme Court of Canada overturned the prevailing case law that held that the deemed trust created in favour of the Crown under the Excise Tax Act (ETA) for collected but unremitted amounts of Goods and Services Tax/Harmonized Sales Tax (GST/HST) survived in the context of a Companies' Creditors Arrangement Act (CCAA) reorganization.
On December 21, ISDA announced that it sought and was granted permission to intervene in the Lehman Brothers International Europe case in order to ensure that the arguments reflecting the market's interpretation of Section 2(a)(iii) of the ISDA Master Agreement were made before the court. The court agreed with ISDA that Section 2(a)(iii) is "suspensive" in effect. ISDA Release.
On December 29, 2010, the Honorable Mariana R. Pfaelzer denied a motion by Stichting Pensioenfonds ABP ("Plaintiff") to remand its claims against Countrywide and others to state court. Judge Pfaelzer concluded that the case was sufficiently related to a bankruptcy case to confer federal jurisdiction in light of contractual indemnification obligations of a bankrupt originator, American Home Mortgage Corp., to Countrywide. The Court also concluded that there were no equitable grounds meriting remand.
On November 17th, Lehman Brothers Special Financing Inc. ("LBSF") and its official unsecured creditors' committee filed a joint motion to stay BNY Corporate Trustee Services Limited's ("BNY") appeal for 90 days in the "Dante" matter, pending final settlement of the dispute between LBSF and Perpetual Trustee Company Limited ("Perpetual").
If you were waiting to hear what the English Court of Appeal had to say about the lower court decision in Marine Trade S.A. v. Pioneer Freight Futures Co. Ltd. you’ll be disappointed, as the appeal was dismissed by consent of the parties on October 22, 2010.
On October 12, the FDIC issued a notice of proposed rulemaking for a rule clarifying how the FDIC would treat certain creditor claims under the new liquidation authority, established under the Dodd-Frank Act, for financial companies whose insolvency would pose a significant risk to the financial stability of the United States.
On September 20th, the United States District Court for the Southern District of New York granted BNY Corporate Trustee Services Limited ("BNY") leave to appeal the bankruptcy court's decision in the Lehman "Dante" matter. In its January decision, the bankruptcy court had voided certain document provisions providing for the subordination of a swap counterparty's rights to an early termination payment when the swap counterparty or one of its close affiliates went into bankruptcy. BNY holds the collateral subject to this dispute.
On July 30, 2010 the Italian Parliament passed Law 122/20101 which, among others, improved the restructuring proceedings governed by the Italian Bankruptcy Law2 (“IBL”).
The improvements operate on two fronts of restructuring deals which had proven to be still unclear (and thus risky) despite the recent reform: