Associate Martin Cox considers the recent High Court decision of Peel Port Shareholder Finance Company Ltd v Dornoch Ltd, in which the court declined to exercise its discretion under the Civil Procedure Rules (“CPRs”) to order the pre-action disclosure of an insurance policy held by a solvent insured. The article considers the extent to which the outcome in this case is consistent with the overriding objective that courts dispose of cases justly and at proportionate cost.

In In re Spanish Peaks Holdings II, LLC, Case No. 15-35572 (9th Cir. Sept. 12, 2017), the Ninth Circuit Court of Appeals held that a bankruptcy trustee may use Section 363(f) of the Bankruptcy Code to sell real property free and clear of unexpired leases without affording the non-debtor lessees the right to retain possession of the property.

Senior associate Lucy Gould reviews the recent case of Davis v Jackson [2017] EWHC 698 (Ch), in which the court determined the beneficial interests a separated (but not divorced) married couple each held in a property. The property was owned in joint names but occupied only by the wife, who had solely financed its purchase and the mortgage.

Background

In In re Lehman Bros. Holdings Inc. 855 F.3d 459 (2d Cir. 2017), the United States Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Bros.

Asarco LLC v. Noranda Mining, Inc., 844 F.3d 1201 (10th Cir. 2017). In a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution action, the Tenth Circuit ruled that a mining company, whose liability for a contaminated site had been resolved in a settlement agreement approved by the bankruptcy court, could still seek contribution against other potentially responsible parties (PRPs), claiming that it overpaid its fair share of cleanup costs for the site. Id. at 1208.

On March 22, 2017, the Supreme Court in Czyzewski v. Jevic Holding Corp., 580 U.S. __ (2017) held that a bankruptcy court does not have the power to approve a structured dismissal of a bankruptcy case that violates the Bankruptcy Code’s priority scheme unless the affected parties consent.

Privilege and insolvency

A recent Court of Appeal decision means insolvency practitioners should think twice before instructing solicitors. The case confirmed that whilst there is nothing wrong in principle with solicitors acting for both a trustee in bankruptcy or liquidator and a creditor of the bankrupt or insolvent company, conflicts can arise. Where they do, solicitors may be required to cease acting for the creditor.

In a recent November 17, 2016 opinion, Delaware Trust Co. v. Energy Future Intermediate Holding Company LLC, Case No. 16-1351, the Third Circuit Court of Appeals reversed two lower court opinions by holding that make-whole premiums can be enforceable even if the debt was automatically accelerated by a voluntary bankruptcy filing.

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware refused to enforce a provision in the debtor’s LLC operating agreement requiring a unanimous vote of the debtor’s members to authorize the debtor to file for bankruptcy. In re Intervention Energy Holdings, LLC, et al., 2016 Bankr. LEXIS 2241 (Bankr. D. Del. June 3, 2016).

On May 16, 2016, the United States Supreme Court in Husky International Electronics v. Ritz held that the phrase “actual fraud” under section 523(a)(2)(A) of the Bankruptcy Code may include fraudulent transfer schemes that were effectuated without a false representation. Section 523(a)(2)(A) provides that an individual debtor will not be discharged from certain debts to the extent that those debts were obtained by false pretenses, false representations or actual fraud.