Summary

The recent judgment of the Supreme Court in the joined cases of Rubin and another v Eurofinance SA and others and New Cap Reinsurance Corporation (in liquidation) and another v A E Grant and others [2012] UKSC 46, issued on 24 October 2012, established that judgments avoiding pre-bankruptcy transactions (“avoidance judgments”) made by non-EU foreign courts (including U.S. bankruptcy courts) have no special enforceability status in England and Wales compared to ordinary judgments.

On August 2, 2012, the United States Court of Appeals for the Fifth Circuit held that a requirements contract for electricity is a forward contract for purposes of section 546(e) of the Bankruptcy Code and, therefore, settlement payments made under the contract are exempt from avoidance as preferences. Claude Lightfoot v.

On September 25, 2012, Judge D. Michael Lynn for the United States Bankruptcy Court of the Northern District of Texas held that a “tail provision” for professional fees rendered prepetition survived – and was not cut off by – the debtor’s bankruptcy filing.  In re Texas Rangers Baseball Partners, Case No. 10-43400-DML, 2012 WL 4464550 (Bankr. N.D. Tex. Sept. 25, 2012).

Background

Introduction

This article looks at some of the issues a lender should consider when a borrower or security provider is incorporated or has substantial assets outside England and Wales.  The lender needs to know how this will affect its security and remedies, and the possible impact of insolvency procedures in relevant jurisdictions.

On August 28, 2012, the United States District Court for the Northern District of Texas vacated a series of bankruptcy court rulings that had blocked Vitro SAB’s noteholders from filing involuntary bankruptcy petitions against Vitro’s non-debtor subsidiary guarantors.  In a decision authored by Chief Judge Sidney A.

I. Summary

On August 2, 2012, the United States Court of Appeals for the Fifth Circuit held that a requirements contract for the supply of electricity constituted a “forward contract” under the Bankruptcy Code and, therefore, was exempt from preference avoidance actions.  The Fifth Circuit held that the contract in this case met the plain language definition of a “forward contract,” notwithstanding the fact that it lacked fixed quantity and delivery date terms.  Lightfoot v. MXEnergy Elec., Inc. (In re MBS Mgmt. Servs., Inc.), 2012 WL 3125167 (5th Cir. Aug. 2, 2012).

Since the passage of the Indian Gaming Regulatory Act in 1988, casinos owned by Native American tribes have proliferated across tribal lands and have generated billions of dollars in revenue annually.  While casinos such as Mohegan Sun and Foxwoods are among the largest and well-known tribal casinos, over 60 exist in the State of California, where many dozen small properties have sprung up throughout the state in recent years, in some cases built in part with the proceeds of high-yield bond debt.  This recent growth spurt juxtaposed with the prolonged downturn in consumer spending

On August 31, 2012, the United States Court of Appeals for the Second Circuit published its first decision expressly adopting an abuse of discretion standard for reviewing equitable mootness determinations by district courts. In In re Charter Communications, Inc., the Second Circuit followed the Third and Tenth Circuits, while also reaffirming the Second Circuit’s rebuttable presumption of equitable mootness upon substantial consummation of a debtor’s plan.