Court refuses application for pre-action disclosure of insurance policy

The High Court has refused an application for pre-action disclosure of the public liability insurance policy of a company that, if litigation were pursued against it, was likely to become insolvent.

Background

Sixth Circuit Determines that an Absolute Assignment of Rents Perfected Under Michigan State Law Takes Property out of a Bankruptcy Estate (In Re Town Center Flats, LLC, Case No. 16-1812 — Decided May 2, 2017)

A draft bill on amendment to the Bankruptcy Code (Act XLIX of 1991 on bankruptcy proceedings and liquidation proceedings) was introduced into the Parliament on 12 April 2017 and is currently under review. If the draft bill was approved and published, the new rules would be applicable to the new liquidation proceedings and to new management liability related lawsuits. Lawmakers would grant a 2-month period to prepare for the changes.

Key areas for change are:

1. Fiduciary security interests would be elevated to the same level as pledge-type security

The recent Amendment on the Czech Insolvency Act (the “Amendment”) enters into force on 1 July 2017.

The Amendment states that a creditor is entitled to be satisfied from its security even when its contingent or future claim (such as bank guarantee) becomes actual after the start of the security provider’s insolvency.

The new Amendment on the Czech Insolvency Act (the “Amendment”) will enter into force on 1 July 2017.

The Amendment introduces a “liquidity gap” test, which will be used when a debtor (entrepreneur) needs to determine whether it is considered insolvent or not. The liquidity gap is the difference between a debtor’s due debts and its readily available funds. A debtor will only be considered insolvent if the liquidity gap is higher than 10% of its overdue debts.

Issue 6 | April 2017 Disputes Digest 2 | Disputes Digest Corporate counsel’s guide to the key cases of 2016 (litigation) Corporate counsel’s guide to the key cases of 2016 (arbitration) Singapore targets effi ciency in investment arbitration proceedings Does the MasterCard class action mark the dawn of a new era in UK litigation?

On March 30, the Third Circuit Court of Appeals filed an opinion regarding whether the filing of a mechanic’s lien after the commencement of a bankruptcy case violates the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, you should be aware of the Third Circuit’s ruling.

Seyfarth Synopsis: A bankruptcy court overseeing an employer’s Chapter 11 bankruptcy proceeding allowed the employer to pay certain unsecured creditors before paying Worker Adjustment And Retraining Notification Act (“WARN”) creditors – workers who had sued the company – monies owed pursuant to a judgment, even though the bulk of the WARN monies owed were for back wages that hold priority over other unsecured claims under the Bankruptcy Code.

Last year we reported on a decision of the Scottish Court of Session which suggested that greater leniency may apply to the interpretation of performance bonds in Scotland than in England (see our earlier Law-Now here). A further decision from the Court of Session issued last month would appear to support this trend.

Fife Council v Royal & Sun Alliance Insurance plc

Administrators can be validly appointed to a company by the holder of a floating charge which was given by the company in breach of a negative pledge in favour of an existing secured creditor and even if, both at the time of the purported creation of that floating charge and on the day of the purported appointment of administrators, the company had no assets which were the subject of the floating charge.