The States of Guernsey has announced the recommendations from the consultation carried out on proposed changes to the Companies (Guernsey) Law 2008. This coincides with a judgment from the Royal Court highlighting the timely nature of proposed changes.
The 2008 Law was the result of a wholesale revision and consolidation of the corporate legal framework. Whilst its focus was on corporate law it also encompassed the insolvency regime in Guernsey. The consultation exercise was to determine what, if any, changes may be required now that the 2008 Law had been in place for some time.
Bankruptcy
On March 5, 2012, new rules came into force for credit cooperatives in bankruptcy proceedings; the new rules feature:
This Briefing addresses the usual manner in which solvent voluntary liquidations proceed. The discussion is subject to the particular provisions of the Memorandum and Articles of Association of any company seeking a voluntary liquidation.
Where a company is not a regulated entity, has no liabilities and is able to pay its debts as they come due, a voluntary winding up and dissolution may be commenced by a resolution of directors.
Where it is proposed to appoint a voluntary liquidator, the directors of the company shall:
In its recent decision in Meruelo Maddux Properties, Inc.,1 the Court of Appeals for the Ninth Circuit held that an entity that meets the definition of a “single real estate” debtor under the Bankruptcy Code may not escape the consequences of such designation simply because it is a subsidiary of a group of companies with integrated and intertwined relationships among them. The decision may provide powerful rights not only to lenders to such entities in general, but could significantly enhance the rights of creditors of real estate owning single purpose entities.
The Delaware Bankruptcy Court has confirmed that in multiple-debtor chapter 11 cases, the cramdown rules set forth in section 1129(a)(10) of the Bankruptcy Code must be applied on a per debtor basis as opposed to a per plan basis. See In re JER/Jameson Mezz Borrower II, LLC, No. 11-13338 (MFW), 2011 WL 6749058 (Bankr. D. Del. Dec. 22, 2011) (“Jameson”) and In re Tribune Co., No. 08-13141 (KJC), 2011 WL 5142420 (Bankr. D. Del. Oct. 31, 2011) (“Tribune”).
Introduction
With the continuing development of sophisticated cross-border financial transactions, certain contractual practices have evolved and, with the passage of time, become recognised as standard in the relevant marketplace. Financial centres such as Jersey monitor such developments with a view to implementing policy and/or legislation as may be required or desirable to maintain and enhance the reputation of Jersey as a jurisdiction of choice for such cross-border transactions.
In the last several months, there have been some significant legal developments that could impact acquisition finance. This article will survey some of the more notable ones.
In a case with implications for buyers of assets in a bankruptcy court-ordered sale under section 363(b) of the Bankruptcy Code, the Bankruptcy Court for the Southern District of New York recently issued a decision limiting the ability of manufacturers that are debtors in a bankruptcy case to sell assets free and clear of future liabilities.
It’s been quite a week for important cases on TUPE and its operation in relation to administrations. The Court of Appeal has delivered two judgments which are of considerable importance for those contemplating and structuring transactions out of administration.
The key points to note are that:
Judge James M. Peck of the United States Bank-ruptcy Court for the Southern District of New York on December 8, 2011 issued an opinion on a motion of the Lehman Brothers Inc. (“LBI”) trustee (“Trustee”) to confirm his determination that certain claims relating to settled on delivery-versus-payment “to be announced” (“TBA”) contracts do not qualify as customer claims against the LBI estate and therefore are not entitled to Securities Investor Protection Act (“SIPA”) coverage.
On 31 October 2011, MF Global UK Limited, an insolvent investment broker, became the first investment firm to enter the special administration regime (the “SAR”) created by the Investment Bank Special Administration Regulations 2011 (SI 2011/245).
The SAR was adopted in February 2011 following the collapse of Lehman Brothers and has the advantage over ordinary corporate administration in that it sets special objectives for the administrator and this is the first time the SAR has been used. The SAR sets three objectives for a special administrator: