On 5 February 2016 the Dutch Supreme Court ruled that the fact that a trustee in bankruptcy unlawfully collected pledged receivables has no consequences for the ranking of his salary. That the trustee in this case would profit from his unlawful behaviour (his salary is the highest ranking claim in a bankruptcy) is undesirable, but not enough reason to change the ranking.

In its 18 December 2015 ABN/Marell judgement, the Dutch Supreme Court held that if secured debt is pledged, the holder of that right of pledge has the authority to enforce not only its own pledge but also the security connected with that pledged secured debt. Such chains of secured debt are not uncommon, but often parties are not aware that they exist. According to this new case law, security down the chain can be used in the enforcement of the primary security.

Legal & Regulatory

BRRD: FCA publishes modification by consent for Article 55 rules

Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims.

De Hoge Raad heeft twee uitspraken gedaan over de houdbaarheid van het overwaarde-arrangement in faillissement. In het kort stelt de Hoge Raad vast dat in geval van faillissement van de kredietnemer, de financiers gebruik kunnen maken van het overwaarde-arrangement, mits de kredietnemer partij is bij het arrangement.

Overwaarde-arrangement

Een aandeelhouder ziet door een faillissement de waarde van de in een vennootschap gehouden aandelen verdampen. Soms maakt de aandeelhouder een derde het verwijt dat deze verantwoordelijk is voor het faillissement en de daardoor voor de aandeelhouder ingetreden schade. Kan die aandeelhouder zijn schade op de derde verhalen? Deze vraag kwam aan de orde in het faillissement van reisorganisatie OAD. De rechtbank Midden-Nederland deed recent uitspraak in een door de aandeelhouder tegen de bank aanhangig gemaakte procedure.

The change provides clarity regarding the pledges over credit rights, restoring pledges as effective and efficient security interests.

Material changes to the Italian bankruptcy law will likely result in increased interest of investors in the distressed market.

The Italian legislators passed significant amendments to the legal framework applicable to debt restructurings and bankruptcy proceedings with law decree No. 82/2015, subsequently converted, with amendments, in law No. 192/2015 (Law 192).

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. The Law Office of Salman M. Al-Sudairi is Latham & Watkins associated office in the Kingdom of Saudi Arabia. In Qatar, Latham & Watkins LLP is licensed by the Qatar Financial Centre Authority.

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. The Law Office of Salman M. Al-Sudairi is Latham & Watkins associated office in the Kingdom of Saudi Arabia. In Qatar, Latham & Watkins LLP is licensed by the Qatar Financial Centre Authority.