On March 29, 2016, the Second Circuit addressed the breadth and application of the Bankruptcy Code's safe harbor provisions in an opinion that applied to two cases before it.  The court analyzed whether: (i) the Bankruptcy Code's safe harbor provisions preempt individual creditors' state law fraudulent conveyance claims; and (ii) the automatic stay bars creditors from asserting such claims while the trustee is actively pursuing similar claims under the Bankruptcy Code.  In In re Tribune Co.

The District Court for the Central District of California recently held that an assignee that acquired rights to a terminated swap agreement was not a "swap participant" under the Bankruptcy Code and, therefore, could not invoke safe harbors based on that status to foreclose on collateral in the face of the automatic stay. ^[1] The court ruled that the assignee acquired only a right to collect payment under the swap agreement, not the assignor's rights under the Bankruptcy Code to exercise remedies without first seeking court approval.

Background

On May 21, 2015, the United States Court of Appeals for the Third Circuit (the "Third Circuit") held that in rare instances a bankruptcy court may approve a "structured dismissal"- that is, a dismissal "that winds up the bankruptcy with certain conditions attached instead of simply dismissing the case and restoring the status quo ante" - that deviates from the Bankruptcy Code's priority scheme. See Official Committee of Unsecured Creditors v. CIT Group/Business Credit Inc. (In re Jevic Holding Corp.), Case No.

In this case, the High Court held that the proceeds of the sale of timber and land under a timber plantation scheme were not held on trust for investors by the scheme operators, with the result that they were available to secured creditors of the scheme in priority to the investors.  In particular, the High Court found that a trust will not arise without clear intention by the parties, and a court will not infer a trust simply because it thinks it is an appropriate means of protecting or creating an interest.  When establishing a managed investment scheme, parties shou

Key points

Justice Black has confirmed in his written reasons for judgment in ReNexus Energy Ltd (subject to deed of company arrangement) [2014] NSWSC 1910 (Nexus) the utility of section 444GA to achieve debt for equity restructures of listed companies.

Aereo, Inc. will be permitted to auction off its live television streaming technology to the highest bidder in accordance with a December 24 order, signed by a New York bankruptcy court judge, approving a deal between Aereo and the broadcast television networks on the sale process.  

This case highlights that the fiduciary duty to avoid conflicts of interest in particular will be strictly adhered to, with questions of fairness or unfairness of the relevant transaction being irrelevant.  Directors are reminded of the need to take great care to manage potential risks when involved in transactions in which they are acting as director of more than one company.  In particular, directors should check the rules in the companies’ constitutions around conflict of interest and if there is any concern, disclose their interest and seek approval of the companie

On October 31, 2014, Bankruptcy Judge Kaplan of the District of New Jersey addressed two issues critically important to intellectual property licensees and purchasers: (i) can a trademark  licensee use section 365(n) of the Bankruptcy Code to keep licensed marks following a  debtor-licensor’s rejection of a license agreement?; and (ii) can a “free and clear” sale of  intellectual property eliminate any rights retained by a licensee? In re Crumbs Bake Shop, Inc., et  al., 2014 WL 5508177 (Bankr. D.N.J. Oct. 31, 2014).

Key points

First occasion where a deed administrator has sought leave under section 444GA of the Corporations Act 2001 (Cth) (theAct) in respect of a publicly listed company. The Court granted leave for 98.2% of each shareholders’ holding in Mirabela Nickel Limited (Mirabela) to be transferred to certain unsecured creditors as part of a broader recapitalisation, under a deed of company arrangement (DOCA), without shareholder approval.  

Earlier this year, we reported on a decision limiting a secured creditor's right to credit bid purchased debt (capping the credit bid at the discounted price paid for the debt) to facilitate an auction in Fisker Automotive Holdings' chapter 11 case.¹ In the weeks that followed, the debtor held a competitive (nineteen-round) auction and ultimately selected Wanxiang America Corporation, rather than the secured creditor, as the w