On March 29, 2017, the United Kingdom (UK) delivered notice of its withdrawal from the European Union (EU), triggering the most comprehensive legislative review and revision ever to occur in the UK. This update discusses legislative changes that might affect structured finance. Changes in Law Upon the UK’s withdrawal, EU treaties, directives, directly effective decisions and regulations, and rulings of the European Court of Justice will cease to apply to the UK unless their effect is specifically preserved by English law.
Not uncommonly, a preference complaint fails to adequately allege that the transfers sought to be recovered by the trustee were made “for or on account of an antecedent debt owed by the debtor before such transfer was made”, as required under Section 547(b) of the Bankruptcy Code. Thus, when faced with a complaint to recover alleged preferential transfers, a defendant can proceed in one of two ways: (i) file an answer and raise affirmative defenses, or (ii) move to dismiss under Rule 12(b)(6).
In the recent decision of In re Molycorp, Inc., 562 B.R. 67 (Bankr. D. Del. 2017), Judge Sontchi held that a carve-out provision in a DIP financing order did not act as an absolute limit on the fees and expenses payable to counsel to the creditors committee in a case with a confirmed chapter 11 plan.
In a 33 page decision released March 29, 2017, Judge Sontchi of the Delaware Bankruptcy Court ruled on competing motions to dismiss the remaining claims and counterclaims in an adversary proceeding in the Affirmative Insurance bankruptcy – Adversary Proceeding Case No. 16-50425.
To date, a debt waiver has been frequently used as a tool to successfully restructure German-based companies in financial difficulties.
Serving as an illustration of the principal that a financial restructuring won’t save a business that has ceased to be frequented by customers, RadioShack has filed for bankruptcy for the second time in as many years. The prior case was filed in the Bankruptcy Court for the District of Delaware as case no. 15-10197. This case is also in the Bankruptcy Court for the District of Delaware, and is case no. 17-10506.
On March 2, 2017, Cal Dive Offshore Contractors, Inc. (“Cal Dive” or “Debtor”) filed approximately 136 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code.
On February 28, 2017, Judge Sontchi of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Money Center of America bankruptcy – Bankr. D. Del., Case 14-10603. The Opinion is available here. This Opinion decided two separate, but similar, motions to dismiss filed by 2 entities owned by federally recognized Indian Tribes and sovereign nations (the “Tribes”).
On February 21, 2017, Judge Silverstein of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Outer Harbor Terminal bankruptcy proceeding – Bankr. D. Del., Case 16-10283. The Opinion is available here. This Opinion decided the Debtor’s objection to a claim for breach of contract filed by Kawasaki Kisen Kaisha, Ltd. (“K Line”).
To date, a debt waiver has been frequently used as a tool to successfully restructure German based companies in financial difficulties. A decision of the German Federal Fiscal Court (Bundesfinanzhof) published on February 8, 2017 currently limits such an option, given that it held that one of the main instruments used by tax authorities to grant relief from an otherwise taxable cancellation of debt income (CODI) in the form of the so-called Restructuring Decree (Sanierungserlass) violates fundamental constitutional rights.