The financial pressure on the oil and gas industry is well known. Dozens of oil and gas companies have defaulted on credit facilities or filed bankruptcy recently and industry observers expect many more to follow.

Can’t get no satisfaction? Sometimes you can! Would you prefer to have security to cover a debt or the cash in the bank, challenges?

On February 17, the Federal Deposit Insurance Corporation (FDIC) approved a proposal for recordkeeping requirements for FDIC-insured institutions with a large number of deposit accounts to facilitate rapid payment of insured deposits to customers if those institutions were to fail. The proposed rule would apply to insured depository institutions with more than 2 million deposit accounts. Under the proposal, these institutions would generally be required to maintain complete and accurate data on each depositor.

Obtaining Decree

In most circumstances, court proceedings will need to be raised by creditors to recover outstanding sums owed. Depending on the amount due, the action will be a Small Claim (up to and including £3,000) a Summary Cause (over £3,000 and up to and including £5,000) or an Ordinary Action (over £5,000). 

After obtaining a Decree (or judgement in England) there are a number of steps that can be taken, if the debtor does not make payment, to recover the outstanding debt. In Scotland this process is known as “diligence”. 

On January 21, the Federal Deposit Insurance Corporation (FDIC) announced that it was seeking comment on a revised proposed rule that would amend the way small banks are assessed for deposit insurance. The proposed rule would affect banks with less than $10 billion in assets that have been insured by the FDIC for at least five years.

It was anticipated that more radical thoughts would emerge from Lord Justice Jackson’s latest speech last night to the Insolvency Practitioners’ Association on the subject of rolling out more fixed costs, and so it proved.

A federal appeals court in Illinois held that Bank of New York Mellon Corporation and Bank of New York (collectively, “BNYM”) were on “inquiry notice” that Sentinel Management Group, Inc. improperly used customer funds as collateral for a loan prior to the firm’s collapse in August 2007. (Sentinel was an investment management firm registered with the Commodity Futures Trading Commission as a futures commission merchant that claimed it specialized in short-term cash management for hedge funds, individuals, financial institutions and other FCMs.

In the case of Bibby Factors Northwest Limited v HFD Limited and MCD Group Limited the Court of Appeal has ruled that there is ordinarily no duty on a company whose debt has been purchased (the Debtor) to inform the purchasing company (the Funder) of any pre-existing contractual arrangements it has with the company assigning the debt (the Assignor).  If the Funder wants this information it must directly request it.

Implications

Will you be ready for the March 2016 contingent asset submission deadline? Following the publication of the PPF’s draft levy determination for the 2016/17 levy year, we look at what questions you should be asking now to ensure you are prepared for the deadline.

Twenty-one major global banks have already signed a relaunched stay protocol developed by the International Swap Dealers Association and other leading industry organizations in coordination with the Financial Stability Board. The purpose of the protocol is to help ensure the orderly resolution of a troubled bank by having firms voluntarily agree to abide by foreign resolution regimes in connection with cross-border transactions. A prior protocol was signed by 18 major banks in November 2014. The relaunched protocol increases the types of covered financial contracts.