In Greb v. Diamond Int’l Corp., 2013 WL 628328 (Cal. Feb. 21, 2013), the California Supreme Court unequivocally and unanimously laid to rest the assertion that dissolved foreign corporations may be sued in California after the time of the statute of limitations provided by the laws under which the foreign corporations were incorporated.
The recent decision of the Federal Court in Carter in the matter of Damilock Pty Ltd (Damilock) highlights the need for liquidators to review current practices when paying priority creditors (e.g. employee entitlements).
Facts
The plaintiffs were appointed as administrators of Damilock on 26 June 2007 and subsequently appointed as liquidators by creditors’ resolution at a meeting on 7 September 2007.
The PPSA (Personal Property Securities Act) will celebrate its first birthday on 30 January 2013.
The PPSA introduced fundamental changes for business structuring arrangements. Assets that are subject to non-arms’ length lease or hire arrangements can be at risk if the entity that has possession of the property under the lease or hire agreement is placed in liquidation or receivership.
What is a PPS lease?
A ‘PPS lease’ is the lease or hire of property for a period (including options):
The Fifth Circuit recently upheld a Texas Bankruptcy Court’s refusal to enforce non-debtor third party releases in the Mexican reorganization proceeding (known as a concursomercantil) of Mexican glass manufacturer Vitro SAB de CV. As a result of this decision, Wall Street and the capital markets will breathe a sigh of relief and will likely continue to extend credit to Mexican corporations with some confidence that guaranties will be enforced.
In a widely followed dispute, the Fifth Circuit Court of Appeals will soon render a decision on the appeal of a Texas Bankruptcy Court’s refusal to recognize non-debtor third party releases in the Mexican reorganization proceeding (concurso mercantil) of Mexican glass manufacturer Vitro SAB de CV. Wall Street and the capital markets will be watching this appeal closely as a reversal of the Bankruptcy Court would likely make lenders and bondholders extremely nervous about extending future credit to Mexican corporations.
In Deephaven Distressed Opportunities Tradings, Ltd. v. 3V Capital Master Fund Ltd., Index No. 600610/08 (Sup. Ct., NY County, Jun. 26, 2012), Judge Melvin L. Schweitzer denied the plaintiffs’ motion for summary judgment on its damages claims. The case arose from a dispute over the trade of distressed claims in the Sea Container, Inc. bankruptcy. Deephaven and 3V Capital executed trade confirmations that would convey “allowed” claims to 3V Capital subject to a negotiated assignment agreement. The parties signed confirmations on three trades, two of which led to this dispute.
In Skov v. U.S. Bank N.A., 2102 WL 2549811 (June 8, 2012), the Court of Appeal reversed the trial court’s decision to sustain a demurrer against plaintiff Andrea Skov’s second amended complaint, holding that she had stated a claim for violation of Civil Code Section 2923.5, which requires a lender to contact a defaulted borrower to discuss alternatives to foreclosure before starting a nonjudicial foreclosure by recording a notice of default.
On June 28, 2012, Stockton, California became the most recent municipality to file for bankruptcy under chapter 9, after having concluded a mandatory mediation process with its creditors. See, In re City of Stockton, California, Case No. 12-32118 (Bankr. E.D. Cal.). Many parties affected by a potential filing by other similarly situated California public entities are seeking to understand the process that precedes a Chapter 9 filing and how to plan for a possible filing.
On May 29, 2012, the Supreme Court ruled 8-0 that a debtor could not confirm a plan over a secured creditor’s objection if the plan provided for the sale of the secured creditor’s collateral free and clear of liens, but did not provide the secured creditor with the option of credit-bidding at the sale. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166, 2012 U.S. LEXIS 3944 (U.S. May 29, 2012). Such a plan, the Supreme Court held, does not meet the statutory requirements for “fair and equitable” treatment of an objecting secured class in 11 U.S.C. § 1129(b)(2)(A).
In the recent matter Wilmington Trust Natl. Assn. v. Vitro Automotriz, Index No. 652303/11 (N.Y. Sup. Dec. 5, 2011), Justice Bernard J. Fried of the Commercial Division addressed the obligations of guarantors of indentured notes. Regardless that the issuer of the notes had declared bankruptcy in Mexico, the guarantors, none of whom were co-debtors, were not relieved of their obligations under the notes.