The Indiana Lawyer Announced on March 31, 2011, that the Fair Finance Co.’s bankruptcy trustee had reached a $371,000 settlement with an Indianapolis attorney who was accused of defaulting on a 2003 loan from the business. The trustee had sued the Indiana attorney and his wife, saying that the couple failed to pay off a $250,000 loan that matured in 2006. Accrued interest had raised the amount owed to over $370,000.

The recent Court of Session case of Tayplan Limited (in administration) v Smith, is particularly interesting as it is a case where the administrator chose to pursue directors for breach of fiduciary duties rather than using any of the more common statutory remedies.

The Facts

Tayplan Limited was a family business with two directors - Mr Smith senior and Mr Smith junior. Mr Smith senior and his wife each held 50% of the shares in the Company.

A Cuyahoga County, Ohio trial court did not abuse its discretion when it appointed a receiver for a “defunct” foreign corporation that the trial court found “persists for the purpose of winding up its affairs in Ohio.”In re: All Cases against Sager Corporation (2010), 188 Ohio App 3d 796, appeal accepted for review (2011), 127 Ohio St. 3d 1503. The Court of Appeals found it undisputed that corporate assets existed after the foreign corporation had been dissolved, “and that these assets may afford insurance coverage to Ohioans injured by exposure to Sager’s products”.

The Insolvency Service ("IS") has published a consultation on proposed reform to the regulation of insolvency practitioners. The consultation responds to various recommendations made last year by the Office of Fair Trading ("OFT") in their study entitled, "The Market for Corporate Insolvency Practitioners".

Section 75 of the Pensions Act 1995 has the potential to mean that, as a result of corporate restructuring (including on employee and TUPE transfers), an employer that participates in a defined benefit occupational pension scheme could have to make a one-off payment (a debt) to the scheme. The debt reflects the difference between the scheme funds that are available and the estimated cost of securing all scheme benefits in the form of annuity policies.

In a decision that demonstrates a considerable degree of common sense, Lord Glennie has confirmed that in certain liquidations one can dispense with the usual requirement for a Reporter to be appointed to consider a liquidator's accounts. The decision forms part of an Opinion issued by Lord Glennie in relation to the winding-up of Park Gardens Investments Limited ("the Company").

On December 23, 2010, the Bankruptcy Appellate Panel of the 6th Circuit, upheld the Eastern District of Kentucky’s Bankruptcy Court’s order that post petition rents, revenues or other funds derived from leased real property is property of the estate under 11 U.S.C. §541 and can be used as cash collateral under 11 U.S.C. §363. However, post petition rents can be used as cash collateral only if the debtor can provide adequate protection for the use of those rents through an existing equity cushion in the property.

In Ransom v. FIA Card Servs., N.A., --- S.Ct. ----, 2011 WL 66438 (U.S. 2011), the United States Supreme Court took up the question of whether a Chapter 13 debtor who owns his or her vehicle outright (“free and clear”) may claim an allowance for car ownership costs and thereby reduce the amount that he or she will repay creditors. In her first opinion, Justice Kagan answered simply—no. The Ransom opinion has been seen as a victory for not only credit card companies like the one involved but other creditors, as well.

The Supreme Court of Kentucky recently held that under Kentucky law, a security interest in a motor vehicle is not deemed perfected unless and until physical notation of the security interest is made on the certificate of title, pursuant to KRS 186A.190.

Since 2003, the procedure for appointing administrators has largely consisted of filing simple forms with a court. What could be easier? A recent case has, however, highlighted the dangers of making errors in the filing process and serves as a timely warning to everyone involved in insolvency and security enforcement work.

In Kaupthing Capital Partners II Master LP Inc, the English courts ruled that an appointment of administrators was invalid as the incorrect form had been used for the appointment.