At the Commodity Futures Trading Commission (CFTC) open meeting on April 14, the CFTC unanimously approved proposed amendments to Part 190 of its rules governing bankruptcy proceedings of commodity brokers, including futures commission merchants (FCMs) and derivatives clearing organizations (DCOs). The proposed amendments are intended to comprehensively update Part 190 to reflect current market practices. Among other revisions, the proposed amendments to Part 190 would:

Background

In the 2018 Autumn Budget, the Chancellor announced his intention to reintroduce Crown Preference with effect from 6 April 2020. Due to the attempts to prorogue Parliament and the General Election last year, the necessary legislation was not passed. However, it has now been introduced in the Finance Bill 2020, with the later start date of 1 December 2020.

Cash flow and current and future liquidity are now real concerns for many businesses during this COVID-19 pandemic. Increasingly, the attention of directors and the wider economic ecosystem is turning to consider the issues of approaching insolvency and the duties of directors.

In line with the current approach of the UK Government to support businesses, on Saturday, 28 March, the Business Secretary, Alok Sharma, announced that UK wrongful trading insolvency laws are to temporarily change to help give businesses and directors some "breathing space".

Retentions have been a common feature in the construction industry for over 100 years, yet over the past two years there has been a growing shift in the construction industry’s views on retentions and whether reform of retention as we know it is required. Adele Parsons discusses these recent developments further.

[2019] EWHC 2651 (TCC)

Before ICC Judge Barber In the Insolvency and Companies List

The facts

In an 8-1decision issued on May 20, the Supreme Court held that rejection of an executory trademark license agreement in a bankruptcy of the licensor is merely a breach, and not a termination or rescission, of the agreement. The licensee retains whatever rights it would have had upon a breach of the agreement prior to bankruptcy and can continue to use the trademarks pursuant to its contractual rights under applicable law. Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___, No. 17-1657 (May 20, 2019).

Background

[2019] EWCA Civ 230

This was an appeal by the supplier of a software system against a TCC judgment dismissing its claim and ordering it to pay substantial damages on the counterclaim. The main issue of principle which arose was how to apply a clause imposing liquidated damages for delay in circumstances where the contractor or supplier never achieves completion.

The Court of Appeal has recently considered two appeals in which the interplay between the construction adjudication process and the insolvency regime was considered; Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited (see my blog of 28 September 2018 on the TCC decision) and Cannon Corporate Limited v Primus Build Limited.

[2019] EWCA Civ 27

The Cannon case was heard at the same time as the Bresco appeal, although if searching for it, the case will be found under the Bresco name and reference. Here, there was a lengthy procedural history culminating in Cannon resisting summary judgment of an adjudication decision on the basis that Primus might not be able to repay the sums, because Primus was in a CVA. The Judge at first instance said: