The European Commission has opened an in-depth investigation into plans to restructure the Royal Mail.

Introduction

In a significant decision that reinforced the U.S. Supreme Court’s prior plurality decision in Marathon, the Court determined that while bankruptcy courts have the statutory authority to hear state-law compulsory counterclaims to a creditor’s proof of claim under section 157(b)(2)(C) of Title 28, Article III of the U.S. Constitution requires such proceedings to be heard by Article III judges where they would not be resolved as part of the claims allowance process.

On 17 May 2011, the GC annulled a Commission decision requiring recovery of state aid from Polish steel producer Technologie Buczek (TB). The case concerned the actions taken by the Polish authorities in implementing a plan to restructure the steel industry. The GC found that the Commission had been correct to find that TB had benefited from a decision by the Polish authorities not to apply for bankruptcy but to allow the company to continue to operate without repaying its debts.

Introduction

In previous issues of TransAtlantic, we reported that the UK Pensions Regulator had issued contribution notices (CNs) and financial support directions (FSDs) against insolvent companies in the Nortel and Lehman Brothers groups. Click here for the June story on Nortel (see page 5); click here for the November story on Lehman (see page 7).

There are essentially three types of insolvency proceeding: liquidation, receivership and administration. Liquidators realise and distribute a company’s assets before dissolving the company. Receivers usually realise certain secured assets to repay certain debts, before appointing a liquidator. However, an administrator’s first objective is to rescue the company as a going concern. It is only if this is not practicable that the administrator can realise and distribute a company’s assets.

The United States Court of Appeals for the Second Circuit (the “Second Circuit”) on February 7, 2011 issued an opinion rejecting the often used gifting doctrine in the context of a plan of reorganization on the one hand, while affirming vote designation for claims not purchased in good faith on the other.In re DBSD N. Am., Inc., __ F.3d __, 2011 WL 350480 (2d Cir. Feb. 7, 2011).

On 16 December 2010, HM Treasury published a revised draft of the Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (SI 2010/2993) (the “Amending Regulations”).  

Our October 2010 DechertOnPoint “FDIC Begins Action on Its Super-Resolution Rules for Covered Financial Companies” discussed how systemi-cally significant non-bank financial companies (“covered financial compa-nies”) may find themselves in unknown territory if the FDIC is appointed re-ceiver for them.