On 1 September 2017, Boart Longyear Limited (Boart), successfully implemented the reconstruction of its US law governed debt using Australian creditor schemes of arrangement (Schemes).
This is a landmark case that will influence Australian corporate reconstructions for years to come.
The case involved approval by the NSW Supreme Court and recognition by the US Bankrupcty Court under Chapter 15 of the US Bankruptcy Code, ensuring cross border effectiveness for the reconstruction.
Highlights
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.
External administrators of companies can now assign any right to sue that is conferred on them by the Corporations Act, for example voidable transaction claims and insolvent trading claims. Previously these were considered rights that could only be utilised by the appointed liquidator and so could not be assigned. Now they can.
When did this start?
- This has already begun. It commenced on 1 March 2017.
What legislation brought this about?
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.
The New South Wales Court of Appeal granted leave to appeal following a finding that certain documents relating to attempts to secure litigation funding were not privileged.
Yesterday, in a unanimous 5-0 decision, the New South Wales Court of Appeal knocked out Justice Brereton’s remuneration decision in Sakr Nominees Pty Ltd [2016] NSWSC 709, the sixth in a series of controversial decisions on insolvency practitioner remuneration.
A recent Western Australian Supreme Court case considered the insolvency of a partnership comprised of corporate members. When a partnership is formally dissolved, the partnership assets are realised by a court-appointed receiver, who will realise and distribute the assets in accordance with the relevant State partnership legislation. Senior Associate, Stefano Calabretta and Lawyer, Brendan May discussion this scenario further.
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.
Termite Resources NL (Termite) had operated the Cairn Hill Mine in South Australia from 2010. As a wholly owned subsidiary of Outback Iron Pty Ltd (Outback), Termite operated the mine as an incorporated joint venture between IMX Resources (IMX) and Taifeng Yuanchuang International Development Co Ltd (Taifeng).