Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware.
Introduction
The Seventh Circuit Court of Appeals recently handed down a decision with significant implications for landlords contemplating lease termination agreements with distressed tenants. Ruling on a direct appeal in the chapter 11 case In re Great Lakes Quick Lube LP, the court held that a lease termination agreement between a landlord and a financially distressed tenant can be voided as either a fraudulent conveyance or a preferential transfer in the tenant’s subsequent bankruptcy case.
The Seventh Circuit Court of Appeals recently handed down a decision with significant implications for landlords contemplating lease termination agreements with distressed tenants. Ruling on a direct appeal in the chapter 11 case In re Great Lakes Quick Lube LP, the court held that a lease termination agreement between a landlord and a financially distressed tenant can be voided as either a fraudulent conveyance or a preferential transfer in the tenant’s subsequent bankruptcy case.
Bankruptcy and restructuring professionals usually do not need to be political junkies. Amendments to the Bankruptcy Code, and the accompanying machinations of the Congressional legislative process, typically occur at a glacial pace, and such changes nearly always affect future rather than current chapter 11 cases. However, the
Bristol Alliance Nominee No 1 Ltd v Bennett [2013] EWCA Civ 1626; [2013]PLSCS 316 (A/Wear UK Limited)
Background
The case relates to the insolvency of a women’s fashion retailer and their shops in Bristol and Leicester.
The Court of Appeal today overturned existing rules on when administrators have to pay rents falling due before their appointment. The Court ruled that rent payable in advance can be treated as an administration expense such that administrators cannot avoid paying rent payable in advance that falls due before the date on which the administrator is appointed.
IN RE: RIVER WEST PLAZA - CHICAGO, LLC (December 22, 2011)
In the recent English case of Pick v Chief Land Registrar [2011] EWHC 206(Ch), the High Court held that a buyer was entitled to be registered at the Land Registry as the registered proprietor of a property sold by a bankrupt. This was the case, even though the buyer allowed the priority period in which to effect registration to lapse, and the entry of a bankruptcy restriction was made on the title after the date of the transfer, but before the application for registration.
The case of Hull v Campbell serves as a reminder of an outmoded debt recovery procedure that needs to be modernised.