¹ The Third Circuit also affirmed a judgment that awarded the senior creditor damages for the misapplication of such collateral proceeds in violation of the intercreditor agreement’s turnover provision.

The recent Supreme Court of New South Wales decision of Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd (in liq)¹ clarifies that s 588FF of the Corporations Act permits an assignee of a liquidator’s voidable transaction claim to trace a company’s property or proceeds for the purposes of the assignee’s recovery proceedings.

On March 15, 2022, the Financial Oversight and Management Board for Puerto Rico announced that the Plan of Adjustment for the Commonwealth of Puerto Rico became effecfive, more than four years aher Puerto Rico commenced restructuring proceedings under Title III of the Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”). PROMESA is a bespoke piece of federal legislafion enacted in 2016 to address Puerto Rico’s debt crisis, and incorporates most of chapter 9 of the Bankruptcy Code.

On December 22, 2021, Judge Mary Walrath of the Bankruptcy Court for the District of Delaware held in In re The Hertz Corp. that redemption premiums may potentially qualify as unmatured interest, and that, to the extent that such redemption premiums are unmatured interest on unsecured debt, then creditors would only be entitled to receive the federal judgment rate, not the contractual rate of interest.

On October 29, 2021, Judge Laura Taylor Swain, the presiding judge in the Puerto Rico bankruptcy case, ruled that approximately $2 billion in intragovernmental loan claims were subordinated to bonds issued by the Puerto Rico Highway and Transportation Authority (“HTA”) pursuant to an assignment and security agreement.¹ The Court’s opinion

In Holliday v. Credit Suisse Securities USA LLC, United States District Court for the Southern District of New York ("SDNY") Judge George B. Daniels affirmed the dismissal of state law transfer avoidance claims related to a leveraged securities buyout transaction.

The Section

This was first published in the LexisNexis Insolvency Law Bulletin (Vol. 21, No. 5 & 6).

This article is co-authored by Justin Ward of Litigation Capital Management and Marcel Fernandes of 12 Wentworth Selborne Chambers.

Lenders often require their borrowers to be “special purpose entities” in real estate transactions. This is a way that lenders can mitigate their bankruptcy risk in the event that the borrower or any of its parent entities file for bankruptcy. In addition, since most real estate financing is non-recourse, lenders require that the borrower is a separate, special purpose entity so that no other property or business will impact the property which is the subject of the underlying loan.

(This article was originally published in the Australian Restructuring Insolvency & Turnaround Association Journal, Vol. 33 – March 2021)

A liquidator can be exposed personally in litigation. In this article we discuss the risks to a liquidator associated with litigation by examining some recent cases where liquidators have been ordered to pay costs personally. To mitigate these risks, we provide guidance on litigation strategy for liquidators.