The Securities and Exchange Commission brought an action against several individuals and related investment entities (the Wextrust Entities) who allegedly participated in a Ponzi scheme that purportedly defrauded over 1,000 investors of approximately $255 million.

On January 8, Senator Richard Durbin (D-IL), Senator Christopher Dodd (D-CT), Senator Charles Schumer (D-NY) and Representative John Conyers (D-MI) announced an agreement with Citigroup on legislation that would allow homeowners in bankruptcy to alter the terms of their mortgages. Citigroup has agreed to support the "Helping Families Save Their Homes in Bankruptcy Act," introduced by Senator Durbin on January 6, along with a companion bill that was introduced on the same day in the House of Representatives by Representative Conyers.

In the early nineties, Quebec adopted new personal property legislation under the reform of the Civil Code of Quebec (the "CCQ"). However, the CCQ incorporated language and legislation from Quebec's former personal property regime. This combination of old and new legislation has, in some cases, left remnants of formalism surrounding the creation of certain types of hypothecs (security interests). In Positron Technologies Inc.

On November 13, 2008, Lehman Brothers Holdings Inc. and its U.S. affiliates in bankruptcy, including Lehman Brothers Special Financing and Lehman Brothers Commercial Paper (collectively, “Lehman”) filed a motion asking that certain expedited procedures be put in place to allow Lehman to assume, assign or terminate the thousands of executory derivative contracts to which they are a party.

Plaintiff, the trustee of the Chapter 7 estate of Security Asset Capital Corporation (SACC), a corporate debtor, brought an action against the debtor’s officers and directors, alleging that they breached their fiduciary duties by failing to commence Chapter 7 liquidation once SACC became insolvent.

For most lenders, taking security from their borrowers is pretty straightforward: take a general security agreement covering inventory, receivables and all other collateral, add some guarantees, and then look to see if there are any other loose ends that need tying up. But for businesses in regulated industries where some sort of government-issued licence is a threshold requirement, it's not that easy.

In an interpretive statement, the Commodity Futures Trading Commission has taken the position that “cleared-only contracts,” over-the-counter contracts submitted for clearing through a futures commission merchant to a derivatives clearing organization, should be included within the definition of “net equity” for purposes of U.S. Bankruptcy Code provisions applicable to commodity brokers. The CFTC’s interpretation generally would treat cleared-only contracts in the same manner as exchange-traded futures contracts in the event of a futures commission merchant bankruptcy.

In the biggest bank receivership in the history of the United States, the Office of Thrift Supervision seized Washington Mutual Bank on September 25 and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. While details are still emerging, it is at least clear that all deposits were transferred to JPMorgan, as were all loans and Qualified Financial Contracts, which include swaps, options, futures, forwards, repurchase agreements and any other Qualified Financial Contract as defined in 12 U.S.C. Section 1821(e)(8)(D).

On September 7, the U.S. Treasury Department and the Federal Housing Finance Authority (FHFA) placed Fannie Mae and Freddie Mac into conservatorship, and announced (i) Treasury’s entry into a Senior Preferred Stock Purchase Agreement with each Government Sponsored Entity (GSE), (ii) the creation of a Government Sponsored Entity Credit Facility (GSECF), and (iii) the adoption of a GSE Mortgage Backed Securities (MBS) Purchase Program.

For the first time ever in Canada, super-priority rights have been given to employees which will take priority over existing secured creditors.