Summer 2024 Editor: Melanie Willems IN THIS ISSUE “Seething on a jet plane” - conditions precedent and time of the essence in commercial contracts by Jack Spence 03 09 11 24 Diamonds aren’t forever: who is vicariously responsible when they have been stolen?

On May 16th, the DOL released interim final rules (the “Final Rules”) and an amendment to Prohibited Transaction Exemption 2006-06 (the “Amendment to PTE”), effective July 16, 2024, amending the DOL’s Abandoned Plan Program (the “APP”) to allow Chapter 7 bankruptcy trustees to use the APP to terminate, wind up, and distribute assets from a bankrupt company’s retirement plan.

The Aldrich Pump Texas Two-Step bankruptcy may have survived dismissal at the bankruptcy court level, but now the asbestos claimants have appealed to the Fourth Circuit following Judge Whitley's approval of their motion for direct appeal.1

The Fifth Circuit recently issued an opinion that increases the marketability of estate assets often viewed as untouchable. In In re S. Coast Supply Co. ("South Coast"), 91 F.4th 376 (5th Cir. 2024), the Fifth Circuit held that a bankruptcy "preference" action may be sold to a third party under section 363 of the Bankruptcy Code even if the buyer is not an estate fiduciary and does not represent the bankruptcy estate. A preference action is an "avoidance" claim arising under section 547 of the Bankruptcy Code.

This morning, after much anticipation, the Supreme Court has released its judgment in Yan v Mainzeal Property Construction Limited (in liq) [2023] NZSC 113, largely upholding the Court of Appeal's decision, and awarding damages of $39.8m against the directors collectively, with specified limits for certain directors. The decision signals that a strong emphasis on 'creditor protection' is now embedded in New Zealand company law.

In recent years much ink has been spilled opining on the so called 'Quincecare' duty of care, and the limits of it (see links to our recent insolvency law updates covering the topic below). The judgment in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 was a first instance decision on Steyn J, in which he found that a bank has a duty not to execute a payment instruction given by an agent of its customer without making inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.

The manufacturing sector in Germany is currently being hit hard. The reasons are massive increases in material prices and energy costs due to the indirect consequences of the Corona pandemic, disrupted supply chains and the Ukraine war. As a consequence of the economic crisis and insolvency of an important customer, Berner GmbH, based in Osnabrück, decided to continue its restructuring course within the framework of a petition filed on 23.03.2023 with the competent Osnabrück Local Court for the initiation of insolvency proceedings in self -administration.

Das produzierende Gewerbe in Deutschland wird derzeit erheblich in Mitleidenschaft gezogen. Grund sind massive Materialpreis- und Energiekostenerhöhungen aufgrund der mittelbaren Folgen der Corona-Pandemie, gestörten Lieferketten und dem Ukrainekrieg. Als Folge der Wirtschaftskrise sowie der Insolvenz eines bedeutenden Kunden hat sich auch die in Osnabrück ansässige Berner GmbH entschieden, ihren Restrukturierungskurs im Rahmen eines am 23.03.2023 beim zuständigen Amtsgericht in Osnabrück gestellten Antrages auf Einleitung eines Insolvenzverfahrens in Eigenverwaltung fortzusetzen.

Mit Entscheidung des BGH vom 27. Oktober 2022 (IX ZR 145/21) hat dieser die insolvenzrechtliche Streitigkeit zum Verwertungsrecht des Insolvenzverwalters entschieden. Ausweislich der Entscheidung erstreckt sich das Verwertungsrecht des Insolvenzverwalters nach § 166 InsO nicht auf sonstige Rechte, wie insbesondere verpfändete Gesellschaftsanteile oder abgetretene oder verpfändete IP-Rechte erstreckt. Der BGH lehnt eine analoge Anwendung ausdrücklich ab.

Keine Regelungslücke

Our last newsletter commented on high inflation, dwindling business confidence and international supply chain issues. Those factors continue to influence the economic outlook, with some businesses unable to survive the strengthening head winds impacting the economy. The consumer price index increased 7.2 percent in the 12 months to December 2022, remaining stubbornly high despite significant movements in the official cash rate to 4.5%, up significantly from the 0.25% it was sitting at in October 2021. ANZ's economic forecast warns that a "policy induced recession is looming".