Industry observers have been waiting to see when bank failures arising out of the recent financial crisis would produce a wave of Federal Deposit Insurance Corporation (“FDIC”) litigation similar to that seen in the early 1990s after the savings and loan crisis. With its second suit in recent months, the FDIC has shown that it will aggressively pursue claims against directors and officers in connection with failed depository institutions.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.

In pari delicto is a common law defense against liability in circumstances where the culpability of the plaintiff is at least as great as the culpability of the defendant. The Supreme Court of Pennsylvania clarified Pennsylvania law on this on February 16, 2010, in Official Comm. Of Unsecured Creditors of Allegheny Health, Educ. & Research Found. v.

Many commercial landlords will currently be dealing with issues arising out of their tenants' financial difficulties, in particular the impact of insolvency proceedings. For tenants who are in administration, a moritorium applies, which will prevent a landlord taking action against the tenant without leave from the Court. Generally, the Courts will have a degree of sympathy for landlords, and will afford significant weight to the landlords’ proprietary rights when deciding whether to allow landlords to commence proceedings against a tenant.

The Court of Appeal in Haine v Secretary of State for Business Enterprise & Regulatory Reform has held that where redundancies are made in breach of obligations to carry out collective consultation and the employer then goes into insolvency, a protective award subsequently ordered by an employment tribunal is a debt in the liquidation.

Impact on employers