Austrian law recognises pledges (Pfandrechte), security transfers (Sicherungsübereignungen) and security assignments (Sicherungszession).
On May 29, 2012, the United States Supreme Court issued its decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. ___ (2012), which affirmed that secured creditors have the right to use their claims to credit bid in auctions of their collateral conducted under bankruptcy reorganization plans. The decision is a victory for secured lenders because these credit bid rights ensure that, in the context of a collateral sale, secured lenders will be able to use their claims to purchase their collateral if they are not being repaid in full.
According to article 11 of Poland’s Bankruptcy and reorganisation law as of 28 Feb-ruary 2003 (Journal of laws 2009, No. 175, position 1361, as amended), a debtor who is a legal person (including, in particular, a limited liability company) is considered to be insolvent when the value of its liabilities exceeds the value of its assets, even if the debtor continues to pay its liabilities (balance sheet insolvency).
Litigation arising from the Tousa, Inc. fraudulent transfer claims has been working its way through the legal system since 2009, and the recent decision issued by the 11th Circuit Court of Appeals (the “11th Circuit”), has significant ramifications for any party holding debt, whether that debt is secured, unsecured, original issue or purchased on the secondary market. Regardless of the type of debt, or its source, Tousa illustrates that lenders must heighten their due diligence efforts to protect themselves from the risk of a lawsuit alleging fraudulent transfer liability.
As of January 1, 2012, the Slovak Act on Bankruptcy and Restructuring (Act No. 7/2005 Coll.) has been amended to introduce a statutory subordination of claims of related credi-tors (Section 95(3) of the Slovak Bankruptcy Act). The Amendment affects the ability of creditors to obtain satisfaction from companies in bankruptcy by classifying claims by “related” parties as subordinate to other claims.
Bankruptcy Rule changes, effective December 1, 2011, require mortgage holders and servicers to include additional documentation supporting proofs of claim filed in individual debtor cases. Mortgage holders and servicers must follow these rules or face sanctions and potential loss of the right to present the omitted documentation as evidence in subsequent proceedings.
On January 19, 2012, the Seventh Circuit in In re River East Plaza, LLC, (No. 11-3263), held in favor of a secured lender further strengthening the rights of secured creditors in bankruptcy cases.
One of the primary objectives of the reformed Austrian Insolvency Act ("IO"), which entered into force on 1 July 2010, has been to increase the number of successful corporate reorganisations and to facilitate the continuation of business operations during financial crises. After the initiation of insolvency proceedings, the creditors of an insolvent debtor shall not be entitled to revoke or terminate contracts that are essential for continuing the debtor’s business operations.
Coherent and clear rules for restructuring proceedings
On September 6, 2011, a bankruptcy court approved an agreement between bankrupt bookseller Borders Group, Inc. (“Borders”) and Next Jump, Inc., (“Next Jump”) regarding Next Jump’s alleged trademark infringement and unauthorized use of Borders’ customer information. Next Jump stipulated that it will not communicate with persons on Borders’ customer list, and that it would remove the Borders name and marks from websites that Next Jump owns or operates.
The Second Circuit Court of Appeals Protects Payments Made by Enron to Redeem Commercial Paper Prior to Maturity as “Settlement Payments" Under the Bankruptcy Code's Safe Harbor Provisions.