Judgment by Cregan J of 6 October 2014

Overview

This case concerned an application by the official liquidator of RQB Limited (in liquidation) (the Company) pursuant to S280 of Companies Act 1963 to determine the legal status of a floating charge dated 10 September 2008 which entered into by the Company in favour of Danske Bank (the Bank) and which the liquidator believes to be unenforceable.

Background

The "2005 Facility"

In In re MPM Silicones, LLC, Case No. 14-22503 (RDD) (Bankr. S.D.N.Y. Sept. 30, 2014) (Momentive), the court dismissed a senior lien creditors’ suit alleging that the junior lien creditors breached an intercreditor agreement (ICA) with respect to shared collateral by taking and supporting certain actions adverse to the senior lien creditors.

BACKGROUND

In Lewis Brothers Bakeries, Inc. and Chicago Baking Co. v. Interstate Brands Corp. (2014 WL 2535294 (8th Cir. June 6, 2014)), the United States Court of Appeals for the Eighth Circuit, sitting en banc, held that a perpetual, royalty-free, assignable, transferable, exclusive trademark license granted in connection with a substantially consummated asset purchase agreement was not an executory contract that could be assumed or rejected by the licensor-debtor in bankruptcy.

A federal district court has ruled that a distressed debt fund is not a “financial institution” for purposes of the assignment provisions of a loan agreement.

Background

The Court of Appeal delivered judgment on Monday morning in the much anticipated appeal in Jervis & Others v Pillar Denton & Others on the treatment of rent payable under a lease held by a corporate tenant that enters administration. The case involved the Game Administration.

A & F Enterprises, Inc. v. IHOP Franchising LLC (In re A & F Enterprises, Inc.), 2014 WL 494857 (7th Cir. 2014)

Last week the Court of Appeal finished hearing the long awaited and much anticipated appeal in Jervis and another v Pillar Denton Limited (Game Station) on the hotly contested issue of whether rent is payable as an administration expense. Depending on the decision of the appeal judges this case may trigger a dramatic shift in the way that rent arising during administration is currently treated.

Background 

On February 4, 2014, the United States Bankruptcy Court for the District of New Jersey in In re Surma, 2014 WL 413572 (Bankr. D.N.J. Feb. 4, 2014), held that rents were not property of the debtor’s bankruptcy estate because they were subject to an absolute and unconditional assignment of rents in favor of the secured lender. As a result, the court concluded that the debtor may not, through his Chapter 11 plan of reorganization, use or allocate rents.

Background

In the matter of Fuerta Limited, High Court, 22 January 2014

Judge: Mr. Justice Charleton

A recent decision of the High Court has highlighted the interesting area of law that applies when an application is made to wind up a company on the grounds that it is "just and equitable" to do so.

In In reLehman Brothers Inc., two creditors recently made an unsuccessful attempt to infuse Section 510(b) of the Bankruptcy Code with ambiguity and avoid the subordination of their claims.  In re Lehman Brothers, Inc., 2014 WL 288571 (Bankr. S.D.N.Y.