A case decided last week by the Sixth Circuit illustrates the importance of seeking bankruptcy claim policy amendments when placing D&O coverage. Indian Harbor Ins. Co. v. Zucker (6th Cir. Jun. 20, 2017) involved the application of the insured-vs.-insured exclusion and specifically, whether the policy’s insured-vs.-insured exclusion precluded coverage for a claim brought by a company’s liquidating trust, to which the company’s claims had been assigned by the company as debtor-in-possession after the company filed for bankruptcy.

"The Parent Bank entered into this insurance contract with its eyes wide open and its wallet on its mind."

The Supreme Court of the United States inMidland v. Johnson reversed the Eleventh Circuit Court of Appeals and held that a debt collector that files a proof of claim for debt that is barred by the applicable statute of limitations does not violate the Fair Debt Collection Practices Act (FDCPA) if the face of the proof of claim makes clear that the statute of limitations has run. The Supreme Court refused to accept the debtor's argument that Midland's proof of claim was "false, deceptive, or misleading" under the FDCPA.

In two recent decisions, both the United States Courts of Appeals for the Fourth Circuit (Fourth Circuit) and the Fifth Circuit (Fifth Circuit) concluded that certain orders entered in bankruptcy cases could not be grounds for invocation of res judicata with regard to proofs of claim that are deemed allowed. Both addressed the plain language of Section 502(a) of the United States Bankruptcy Code (the Code) in conjunction with relevant Bankruptcy Rules and Official Forms, and congressional intent.

On March 9, 2017, a bankruptcy court in New York became the latest to weigh in on the developing circuit court split regarding whether modification of mortgages should be permitted under 11 U.S.C.

The United States District Court for the District of Massachusetts (the District Court) recently issued an opinion in the Paul Sagendorph bankruptcy case reversing the Bankruptcy Court's holding that a debtor can force a secured creditor to take title to its collateral in complete satisfaction of the creditor's secured claim.1 In reversing the decision of the Bankruptcy Court, the District Court held that the plain language of Sections 1322(b)(9) and 1325(a)(5)(C)2 does not empower a debtor to force a secured creditor to accept title to its collateral over that creditor's objection.3

The Court of Appeal (CICA) has provided further clarification and guidance to Cayman Islands insolvency professionals on issues ranging from voidable transactions, the scope of liquidators’ powers and legal professional privilege, following the publication this month of a number of decisions that had come before the Court during the November 2016 Court sitting. Set out below is a summary of the Court’s findings in 3 of the CICA decisions which may be relevant to your day to day practice.

Voidable Transactions

In this thoroughly new and groundbreaking case it was held that where a creditor has already filed a winding up petition in respect of a company: (1) not only may the directors of the company parry by themselves applying for the appointment of JPLs; but (2) they may do so even without a shareholder resolution or express provision to do so in the company’s articles of association.

The last decade has exposed the bankruptcy courts across the globe to a large volume of international work, and with that experience in mind, the Judicial Insolvency Network (JIN) held its inaugural meeting in Singapore in late 2016. Its intent was to formulate a set of guidelines (theGuidelines) that would promote cooperation between Courts. Sitting alongside common law and legislative cross-border provisions, the Guidelines are a practical code to enhance some of the most successful cross-border initiatives of recent years.

In an era of increasing complexity in regulation globally, the BVI has carefully built a simple and clear regulatory framework that minimises the legal risk for lenders and financial markets participants dealing with BVI companies.

Legal

The BVI’s regulatory framework is structured to make the legal risk of lending or selling financial assets to a BVI entity lower than almost any other jurisdiction.