The Court of Appeals for the Fourth Circuit, in Jaffe v. Samsung Elecs. Co., Ltd.,1 recently held that a U.S. bankruptcy court is not required under principles of comity to blindly apply foreign law to assets located in the U.S. of a foreign debtor whose principal insolvency proceeding is outside the U.S. Instead, bankruptcy courts must balance the interests of the affected U.S. parties with the those of the foreign debtor. In this case, the balancing required the application of U.S. law to the foreign debtor’s U.S. assets, not German law as applied in the foreign proceeding.
The Bankruptcy Court for the Southern District of New York overseeing the Residential Capital (“ResCap”) cases issued an opinion on November 15, 2013 (the “Opinion”)2 allowing the unamortized interest associated with original issue discount (“OID”) that was generated in a fair market value exchange and claimed by ResCap’s junior secured noteholders (the “Holders”). While the OID ruling is only one component of the Opinion,3 it may have far reaching implications, as already evidenced in the pricing of other OID notes that were the product of fair market value exchanges.
Introduction
Judge James M. Peck of the Bankruptcy Court for the Southern District of New York held, on June 25, 2013 (the “Lehman Op.”),1that claims under repurchase transactions (“Repos”) do not qualify as customer claims and therefore are not entitled to the priority or coverage provided for customers’ claims under the Securities Investor Protection Act (“SIPA”).
Introduction
Key Points
The recent case of Re J T Frith Ltd [2012] EWHC 196 (Ch) shows:
- how secured lenders may surrender their security in order to participate in the prescribed part available for unsecured creditors on insolvency; and
- how intercreditor deeds may be worded to allow senior secured creditors to participate in the prescribed part, despite retaining their security.
Background
Summary
The High Court has held in the “Extended Liens” application that a “general lien” granted by a client of Lehman Brothers International (Europe) (“LBIE”) over financial collateral held by LBIE as security for obligations owed by the client to LBIE or any other Lehman entity was a valid floating charge, both in relation to the client’s debts to LBIE and its debts to LBIE’s affiliates.
On 1 November 2012, the High Court gave judgment in favour of the Special Administrators (“SAs”) of MF Global UK Ltd (“MFGUK”), in relation to a claim by MF Global Inc (“MFGI”) arising from certain repo-to-maturity transactions (the “RTM Application”). These transactions concerned the repo of European debt securities by MFGI to MFGUK, which were governed by a Global Master Repurchase Agreement (“GMRA”).
First and foremost here at the Drug and Device Law Blog, we like good, strong defense decisions. If those decisions contain lessons (or reminders) for our everyday practice – so much the better. That’s why we’ve blogged about cases that let us remind you to check publicly available information about plaintiffs, make sure the plaintiff was alive when she filed suit, and search bankruptcy filings to see if plaintiff disclosed her lawsuit. We
This update highlights developments in the administration of MF Global UK (“MFG”) since our last alert dated 15 June 2012.
Estimated outcomes