Of all the headlines related to Rangers’ current financial plight one related to the world of sales finance is probably a surprise. However, Rangers’ administrators recently sought the opinion of the Court of Session on the club’s well publicised deal with Ticketus, under which Rangers sold to Ticketus rights to future season ticket sales.  Although the Ticketus deal is not, strictly, an invoice financing Lord Hodge’s opinion touches on several questions directly relevant to sales finance.
 

On April 17, 2012, the Northern Mariana Islands Retirement Fund (the “Fund”) became the first United States public pension fund to seek formal bankruptcy protection. The Fund, which provides retirement benefits to government employees of the Commonwealth of the Northern Mariana Islands (the “Commonwealth”) a U.S. territory, listed $256 million in assets and $1 billion in liabilities and has alleged it will exhaust its claims paying ability by as early as 2014. ”

Clients often raise questions concerning the enforceability of arbitration clauses in bankruptcy proceedings. While this topic has been hotly debated for many years, a recent Ninth Circuit opinion, In re Thorpe Insulation Co., 671 F.3d 1011 (9th Cir. 2012), reminds us that arbitration clauses are not sacrosanct and can be struck down by the court.

The Scottish Government launched a consultation on the question of the reform of Scotland’s bankruptcy law earlier this year, and a lengthy and detailed consultation paper was released.  Those of us who have heard the Accountant in Bankruptcy speak at conferences and the like over recent months eagerly awaited a discussion document which would reflect her guarded admission that things had perhaps swung rather too far in favour of debtors, and the time was right to try to redress that balance by looking towards the impact of debt on creditors.

Leading the Past Week

It has long been understood by buyers of assets of distressed companies that once a sale is authorized pursuant to Section 363 of the Bankruptcy Code, the buyer is absolved of any liabilities which may have encumbered the assets of the previous owner, including causes of actions against them. However, a recent decision from the influential United States District Court for the Southern District of New York saddles buyers with the burden of unknown potential future claims.

This blog is supposed to be about real estate, mostly commercial real estate.  So when one of my Celtic-supporting partners who has been watching avidly every twist and turn of the Rangers saga said I should read the latest court judgement and what it said about property law, I was a little surprised.  But there is quite a lot that is relevant to what we do on a day to day basis.

In an earlier blog I touched upon the belief which exists within certain parts of the market that there is still a way to go in the re-pricing of non-prime assets. Some commentators are predicting that this re-pricing will take place through 2012 and into 2013, the hope being that we will start to see greater activity in the secondary market in the second half of next year.

The Court of Appeal has clarified in the case of Key2law (Surrey) LLP v Gaynor De’Antiquis [2011] EWCA Civ 1567 that administration proceedings do not constitute “insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor” in terms of regulation 8(7) of the TUPE Regulations 2006 and therefore fall outside the scope of regulation 8(7).

In a significant expansion of the potential risk for distressed claims traders, the Delaware bankruptcy court has recently ruled¹ that traders who engage in insider trading may have their claims subordinated to equity, and that traders who amass claims sufficient to block a plan of reorganization owe fiduciary duties to all other creditors and shareholders during plan negotiations.