On 20 October 2017 Registrar Derrett handed down judgment in the case of Thomas v Haederle (unreported), in which she gave reasons for dismissing a bankruptcy petition presented by the debtor (T) in the County Court at Norwich on 4 December 2014, pursuant to s 272 of the Insolvency Act 1986 (IA86), as it then was.
InIn Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy. As a condition to the loan, the lender mandated that the borrower’s operating agreement have certain provisions that require the affirmative vote of an “Independent Manager” and 75% of the members to authorize a bankruptcy.
This interview was conducted by Lucy Trevelyan at LexisNexis. The views expressed by the interviewees are not necessarily those of the proprietor.
Property Analysis: A recent Court of Appeal decision on the payment of service charges, while correct in principal, was wrong on the facts, according to Peter Petts, barrister at Hardwicke Chambers.
Original News
Skelton and others v DBS Homes (Kings Hill) Ltd [2017] EWCA Civ 1139, All ER (D) 196 (Jul)
This article was first published in Insolvency Intelligence 2017 30(6) and is now available on Westlaw.
The Delaware bankruptcy court recently decided that a debtor could not assign a trademark license absent the consent of the licensor. The court concluded that federal trademark law and the terms of the license precluded assignment without consent. Because the debtor could not assign the license under any circumstances (consent was not forthcoming), the court held that cause existed to annul the automatic stay to permit the licensor to “move on with its trademark and its business.”
The High Court confirmed that it is generally not appropriate to present a winding up petition to recover sums due under a construction contract, particularly where those sums are disputed or there is a legitimate cross claim.
A professional negligence claim against trustees in bankruptcy alleging that they had unnecessarily prolonged the bankruptcies and caused the bankrupts’ loss failed. The Trustees had agreed not to take steps in the bankruptcies while Dr Oraki and her husband made repeated applications to set aside the judgment upon which their bankruptcy orders were made and annul their bankruptcies under s 282(1)(a) of the Insolvency Act 1986, which they eventually succeeded in doing.
'B’ appealed an Insolvency Act 1986 (IA 1986) s 279(3) order suspending her discharge from bankruptcy until ‘T’ confirmed B had complied with her IA 1986 duties. B traded through a company, which entered voluntary liquidation in November 2014. B’s personal guarantee of company debt led to a bankruptcy order in February 2015.
This case arose from the ongoing administration of Lehman Brothers International (Europe) (‘LBIE’). The appeal considered the proper ranking of certain subordinated debt in the insolvency ‘waterfall’, among other matters.
Held
The first issue concerned the construction of debt instruments subordinated to amounts ‘payable in the insolvency’. It was held that such amounts included statutory interest and non-provable debts, and accordingly those liabilities must be met before any balance could be used to pay off the subordinated loans.