This article provides information regarding what will now happen to the operations and business of the UK arm of Silicon Valley Bank (SVB UK) after the sale (the Sale) of SVB UK to HSBC’s ring-fenced UK subsidiary, HSBC UK Bank plc (HSBC).

The Bank of England (the BoE) will apply to put the UK arm of Silicon Valley Bank (SVB UK) into Bank Insolvency, which is a modified version of liquidation under Part 2 of the Banking Act 2009, on Sunday 12 March 2023 unless a buyer can be found for SVB UK’s business and assets.

The situation remains fluid and this represents our advice based on public announcements by the BoE and SVB UK that we are aware of as at 12pm on 12 March 2023.

With an increased number of businesses experiencing financial difficulties given rising inflation, the weaker pound and interest rate increases, debt restructurings are becoming, and are expected to continue to become, more common.

Such restructurings are often achieved by a third-party lender releasing or materially amending all or part of its debt, which would result in taxable income arising to a UK corporate borrower unless a relevant exemption applies.

Overview

When enacting the Bankruptcy Code, Congress sought to strike a balance amid the confluence of different — and often competing — interests held by debtors, secured creditors and various unsecured creditor constituencies (including landlords) through a framework of statutory protections. This has – at times – led to litigation over differing statutory interpretations as well as circuit splits as courts attempt to reconcile underlying policy goals with the less-than-clear language in various of the Code’s provisions.

In a major development that will be welcomed by anyone engaged in pursuing international fraud claims, the Civil Procedure Rules Committee (CPRC) has approved expansions to the gateways for service out of the jurisdiction as set out in Practice Direction 6B (PD 6B), which will come into force this October.

Overview

Overview

Recently, in Shady Bird Lending, LLC v. The Source Hotel, LLC (In re The Source Hotel, LLC), Case No. 8:21-cv-00824-FLA (C.D. Ca. June 8, 2022), the Central District of California District Court adopted the majority view that a non-income producing property could be a “single asset real estate,” or SARE, debtor. The district court held that a hotel, which was not yet producing income, met the definition of a SARE.

Background

In this week’s update: an updated checklist for managing an electronic signing on a corporate or commercial transaction, the FCA and AIM are to bring an end to temporary relaxations introduced due to Covid-19 and the court orders a listed company to be wound up on “just and equitable grounds.

Overview

In Highland Capital Mgmt. v. Dondero (In re Highland Capital Mgmt.), Case No. 21-03007-sgj (Bankr. N.D. Tex. 2021), the U.S. Bankruptcy Court for the Northern District of Texas held that a debtor could not be compelled to abide by an arbitration clause in an agreement that was rejected pursuant to Section 365 of the Bankruptcy Code.

Background

Overview

In Hilal K. Homaidan v. Sallie Mae, Inc., Navient Solutions, LLC, Navient Credit Finance Corporation, Case No. 20-1981 (2d Cir. 2021), the Second Circuit affirmed the opinion of the U.S. Bankruptcy Court for the Eastern District of New York, which held that private student loans are not excepted from discharge under Section 523(a)(8)(A)(ii) of the Bankruptcy Code, which excepts from discharge “an obligation to repay funds received as an educational benefit, scholarship, or stipend.” 11 U.S.C. § 523(a)(8)(A)(ii).

Background