The Supreme Court yesterday ruled that client money held in un-segregated accounts should be treated the same as client money held in segregated accounts, enabling un-segregated account holders to share in the client money pool on the insolvency of a firm with whom the account is held.

It is not uncommon for firms to use standard language in their account agreements that creates liens on Individual Retirement Accounts (IRAs). Two recent federal court decisions, however, suggest that granting such a lien on an IRA may constitute a prohibited transaction that causes these accounts to lose their tax exempt status, which in turn could potentially make IRAs subject to third-party creditor claims. These two decisions could have far-reaching implications for any firm that has used or still uses similar lien-creating language in their account agreements.

Taking the lead from its recent decision in In re River Road Hotel Partners,¹ in In re River East Plaza, LLC,² the Seventh Circuit held that a debtor cannot avoid the lien retention prong of Section 1129(b)(2)(A)(i)³ by transferring an undersecured creditor’s lien to substitute collateral as indubitable equivalence pursuant to Section 1129(b)(2)(A)(iii).

最高人民法院关于适用《中华人民共和国企业破产法》若干问题的规定（一）(09/09/2011)

Overview of Insolvency Rules and Restructuring Procedures Pursuant to Italian Bankruptcy Law

Background
Facts
First instance decision
Court of Appeal decision
Comment

In Rainy Sky S.A and six others v Kookmin Bank [2011] UKSC 50, the Supreme Court provided useful guidance on the role of business common sense in construing a clause in a commercial contract, particularly in circumstances where there are competing plausible constructions, neither of which is clearly preferable on the language used alone.

The facts

The FOS opened last week for the business of being open. It is now subject to the Freedom of Information Act. However, theFOS web page on the point suggests the Service is trying to limit what will no doubt be a flood of requests.

The FOS’ web page sets out a long list of facts and figures it is most frequently asked about, organised into seven categories adopting the Information Commissioner’s model publication scheme for non-departmental public bodies covered by the FoIA.

In re Caribbean Medical Testing Center, Inc. (Bankr. D. Puerto Rico) Case no. 11-06124

In re Hotel Airport Inc. (Bankr. D. Puerto Rico) Case no. 11-06620