On May 17, the FDIC issued a proposed rule that would require certain insured depository institutions to submit a contingent resolution plan outlining how they could be separated from their parent structures and wound down in an orderly and timely manner. Institutions with assets greater than $10 billion that are subsidiaries of a holding company with total assets of more than $100 billion would be subject to this proposal.

On April 23, the FDIC published additional Q&As on the Statement of Policy on Qualifications for Failed Bank Acquisitions (“Policy Statement”) issued in September 2009. The Q&As clarify that there is no requirement that investors must have held their ownership for a specific amount of time.

The FDIC voted to extend the safe harbor provided under 12 C.F.R. § 360.6 until September 30, 2010, from the FDIC’s ability, as conservator or receiver, to recover assets securitized or participated out by an insured depository institution. When the safe harbor was initially adopted in 2000, the FDIC provided important protections for securitizations and participations by confirming that, in the event of a bank failure, the FDIC would not try to reclaim loans transferred into such transactions so long as an accounting sale had occurred.

The European Commission has published a report by external consultants (Oxera), Should aid be granted to firms in difficulty, a study on counterfactual scenarios to restructuring state aid? It is intended to inform the Commission of the consequences for intended recipients and their relevant industries if aid is not given, including whether the aid will, in fact, save jobs and economic activity.

The Dáil Public Accounts Committee has issued a report which primarily examined the loss of "Fiduciary" taxes (such as PRSI and PAYE) arising from company insolvency. The Committee concluded that there is a need in Ireland to introduce further measures to reduce the amount of Fiduciary taxes that are lost due to the irresponsible behaviour of directors. There is a need, according to the report, for the introduction of a deterrent which will make directors aware of the negative consequences which could arise for them if they wilfully evade paying the company taxes that are due.

Making a will is regarded by most individuals as a necessary irritant ranking in popularity somewhere below a visit to the dentist or doctor. Following the unprecedented instability in the global financial markets since 2007, “systemic” risk (posed by the potential failure of large or complex cross-border financial institutions) was identified by regulators and legislators as one of the key areas requiring better supervision, in order to prevent a similar crisis in the future.

Last week the Supreme Court overturned Mr Justice McGovern's recent decision in the Linen Supply of Ireland examinership that the current legislation does not permit the repudiation of leases in an examinership. The case has now been remitted back to the High Court to consider whether, in the specific case before it, the leases ought to be repudiated in order for a scheme of arrangement to be formulated.

A recent decision in the U.S. Bankruptcy Court for the Southern District of Florida, In re Tousa,[1] has received widespread attention for its near wholesale rejection of insolvency “savings clauses,” and the resulting order requiring lenders to disgorge hundreds of millions of dollars. The decision raises numerous practical problems for participants in the secondary loan and derivatives markets, and more generally for commercial lenders and borrowers.

Background

Recent attempts by the Zoe Group to seek court protection have raised the profile of examinerships. The main legal test to enter the process is: does the company have a reasonable prospect of survival. But what are the key ingredients for a successful examinership?

On 4 March 2009, the Office of Public Sector Information published the Bank Insolvency (England and Wales) Rules 2009 (the Rules) and accompanying explanatory memorandum. The Rules came into force on 25 February 2009 and give effect in England and Wales to the new bank insolvency procedure under Part 2 of the Banking Act 2009.