Those thinking that the trials and tribulations of the recession may have passed them by and that, if all else failed, at least the pension was safe, may have to think again following two recent court decisions in which pensions came under attack from creditors and trustees in bankruptcy.
The vexed question of whether a future right to receive a pension can be attached to satisfy a judgment, or can be claimed by a trustee in bankruptcy, has long since troubled the courts.
In a decision further defining when US public policy restricts the relief a court may grant in aid of a foreign restructuring or insolvency proceeding, the Bankruptcy Court in the Chapter 15 case of Vitro, S.A.B. de C.V. v. ACP Master, Ltd. (In re Vitro, S.A.B. de C.V.), Ch. 15 Case No. 11-33335-HDH-15, 2012 WL 2138112 (Bankr. N.D. Tex. Jun. 13, 2012) refused to a enforce a Mexican restructuring plan that novated and extinguished the guaranty obligations of the Mexican debtor’s non-debtor subsidiary guarantors.
Whether a secured creditor has an absolute right to credit bid at a sale under a chapter 11 plan has been the subject of conflicting decisions rendered by the Third, Fifth and Seventh Circuits.1 The United States Supreme Court has resolved these inconsistent rulings with its decision in RadLAX Gateway Hotel, LLC, et al., v. Amalgamated Bank, 2 which affirmed the Seventh Circuit’s holding that a secured creditor has an absolute right to credit bid in a sale under a chapter 11 plan.
An administrator who was sued in relation to contractual liabilities which he entered as administrator of a company was found to have no personal liability for those contracts or for the costs of the litigation.
In the recent case of Wright Hassall LLP v Morris1 the claimant advanced various arguments in an attempt to make the administrator personally liable for a costs order in litigation where the defendant companies were unable to pay. These arguments were rejected.
Section 541(a) of the Bankruptcy Code creates a worldwide estate comprising all of the legal or equitable interests of the debtor, “wherever located,” held by the debtor as of the filing date.1 The Bankruptcy Code’s automatic stay, in turn, applies “to all entities” and protects the debtor’s property and the bankruptcy court’s jurisdiction by barring “any act to obtain possession of property of the estate . . .
The High Court has held that where litigation is commenced against the administrator of a company, arising out of contractual obligations entered into in that capacity, he or she will not be personally liable, despite the insolvent company being unable to meet the resulting liability.(1)
The courts and FOS are now headed down very different paths in their approach to credit crunch losses suffered by clients of regulated firms. While FOS has all but abandoned the general law of causation in its approach to cases of consumer detriment, we have observed how the courts have held again and again that the general law of causation applies to mis-selling claims.
The Supreme Court yesterday ruled that client money held in un-segregated accounts should be treated the same as client money held in segregated accounts, enabling un-segregated account holders to share in the client money pool on the insolvency of a firm with whom the account is held.
Voicing concern about the Rural Utilities Service’s (RUS) oversight of federal loans for rural broadband network projects, six members of the House Energy and Commerce Committee wrote to RUS Administrator and former FCC Commissioner Jonathan Adelstein to request information on a $267 million loan granted by the RUS to Open Range Communications, a regional broadband service provider that filed for Chapter 11 bankruptcy protection last month. The RUS funds approved for Open Range during the administration of President George W.