The Ninth Circuit recently ruled that a Chapter 11 debtor could not avoid the payment of default interest under a promissory note as a condition to curing and reinstating such promissory note under a Chapter 11 plan. In Pacifica L 51 LLC v. New Investments Inc. (In re New Investments, Inc.), 840 F.3d 1137 (9th Cir. 2016), the Ninth Circuit held that its prior rule of allowing a curing debtor to avoid a contractual post-default interest rate in a loan agreement—as decided in Great Western Bank & Trust v.

Last week the Supreme Court of New South Wales provided another timely reminder to ensure that all security interests are correctly registered on the Personal Property and Securities Register (PPSR) through the decision In the matter of OneSteel Manufacturing Pty Ltd (administrators appointed) [2017] NSWSC 21.

The facts

Alleasing Pty Ltd leased a crushing and screening plant (for approximately $4 million annually in rent) and spare parts for the crusher to OneSteel Manufacturing Pty Limited.

The First Circuit Bankruptcy Appellate Panel recently issued a decision recognizing the rights of trademark licensees when the trademark’s owner files for bankruptcy.

Attributable to Amanda Remus, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel:

The United States Bankruptcy Court for the Southern District of New York today approved the SIPA Trustee's request for an allocation of approximately $342 million in recoveries to the BLMIS Customer Fund and has authorized the SIPA Trustee to proceed with the eighth pro rata interim distribution from the Customer Fund to BLMIS customers with allowed claims.

Failing to register a lessor’s security interest on the PPSR over plant and equipment at leased premises can result in the lessor’s unperfected security interest passing to the administrator of the lessee.

In the recent decision of Flown Pty Ltd v Goldrange Pty Ltd [2016] WASC 419, a lessee’s administrator successfully retained ownership of plant and equipment (which were not fixtures) in the leased premises.

Background

In the recent case of Hadley v BetHQ Pty Ltd [2016] FCA 1263, the debtor company, BetHQ, came to grief when a statutory demand was validly served at the company’s registered office in Brisbane as shown in ASIC records. The premises were a serviced office; however BetHQ had ceased operations at the serviced office and had moved its operations to Victoria.

When a secured creditor appoints a receiver it is usual for them to sign an agreement setting out the terms of the receiver’s appointment, including payment of the receiver’s remuneration, costs and expenses. Appointment documents commonly contain indemnity clauses in which the secured creditor agrees to indemnify the receiver in specified circumstances.

In our previous bulletin we discussed the ‘safe harbour’ model in the Government’s suggested reforms to the current insolvency laws.

This bulletin considers another of the focus questions in the Proposal Paper: the voiding of ipso facto clauses relating to insolvency events.

Background

On 29 April 2016, the Federal Government released a Proposals Paper titled ‘Improving bankruptcy and insolvency laws’.

The Government is proposing these reforms to encourage entrepreneurship and investment. It hopes to reduce the stigma and detriment around failed business ventures, while still balancing the need to protect creditors.

Puerto Rico’s financial woes have recently been front and center in financial news. Although a recent decision by the U.S. Supreme Court curtailed Puerto Rico’s ability to enact its own legislation to address its debt situation, late last month President Obama signed into law legislation designed to allow Puerto Rico to restructure its vast public debt, giving new hope to the Commonwealth’s financially strapped public utilities.