The Court of Chancery issues a liberal ruling on creditor derivative standing and more obsequies for the “zone of insolvency.” 

The United States bankruptcy judge overseeing the liquidation of MF Global Inc., approved the trustee’s proposal to pay  all unsecured general creditors $461 million. Once paid, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims.

The New York State Attorney General settled a lawsuit against Ernst & Young related to its involvement in the financial statement preparation of Lehman Brothers Holding, Inc. The NY AG had alleged that the auditing firm had countenanced Lehman’s inclusion of certain repurchase transactions as sales and not as financings, which permitted the firm to remove “tens of billions of dollars” of securities from its balance sheet. According to the NY AG, the repo transactions—known as “Repo 105”—“served no legitimate purpose.

The trustee for the liquidation of MF Global Inc. is seeking permission from the bankruptcy judge overseeing the firm’s dissolution to make a distribution of US $461 million to unsecured general creditors. If approved, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims. To date, the trustee has distributed 100 percent of approved claims of MF Global’s customers (totaling US $6.7 billion), and 100 percent of approved secured, priority and administrative claims.

It is trite to observe that issues related to the insolvency of a company are not arbitrable. However, the generality of this broad proposition can be misleading. In this the first of two articles on the arbitrability of claims, we look at how a court may approach a winding up petition in the face of a claim that the purported debt on which the petition is based relates to a dispute that is to be arbitrated.

On January 14, 2015, Target Corporation ("Target US") announced the exit of substantially all of its Canadian operations less than two years after opening its first Canadian stores in a strategic push to operate at least one store in every province of Canada. The following day, on January 15, the Ontario Superior Court of Justice (Commercial List) in Toronto (the "Court") granted Target Canada Co.

Introduction

Six trade associations representing non-dealer swap market participants sent a letter to the Financial Stability Board on November 4, urging the FSB to reconsider its initiative to promote contractual waivers of default rights under industry-standard derivative master agreements. The letter, signed by the Managed Funds Association, the Alternative Investment Management Association Limited, the American Council of Life Insurers, the Association of Institutional Investors, the Commodity Customer Coalition and the Commodity Markets Council, responds to comments made by the FSB in the cons

The US Bankruptcy Court for the Central District of California (the "Court") recently upheld the validity of a commercial lease provision by which a debtor/tenant waived its rights to seek relief from forfeiture (i.e., termination) of the lease under California law. As a result, the debtor/tenant had no right in the bankruptcy case to assume the lease. In re Art and Architecture Books of the 21st Century, Case No. 2:13-bk-14135-RK (September 18, 2014).

The court provides guidance on liability if a subsidiary goes bankrupt because of the misconduct and careless management of its parent company.

Over the last few years, employees have increasingly sought to hold the parent companies of their employers liable for the subsidiaries’ actions by trying to demonstrate that the parent entity is the employee’s co-employer, i.e., that the employee has two employers: the company that hired him or her and its parent company.

To demonstrate this co-employment situation, the employee must prove either that