A decision this month out of the Bankruptcy Court in Manhattan (SDNY) could have a significant impact on the market for student loan securitizations. Student loan asset-backed securities (SLABS) are unsecured, but market participants typically assume that the underlying student loans are not dischargeable in bankruptcy. A new ruling by the chief judge of the SDNY’s Bankruptcy Court challenges this assumption.

1. INTRODUCTION 

1. In May 2019, the UK Jurisdiction Taskforce ("UKJT"), a subsidiary of the UK's LawTech Delivery Panel, issued a consultation paper on the status of cryptoassets and smart contracts in English private law ("Consultation Paper"). In his foreword to the Consultation Paper, Sir Geoffrey Vos, Chancellor of the High Court of England and Wales (the "Chancellor") commented that "perceived legal uncertainty" was the reason for some lack of confidence amongst market participants and investors in cryptoassets and smart contracts.¹

EMPLOYMENT (news)

Diversity in boards of larger companies

Targets (i.e., at least 30% women) imposed by Dutch law for a more balanced composition of the executive and supervisory boards of ‘large’ companies shall cease to exist as of 2020. A ‘large’ company is a company that meets two of the following requirements: (i) EUR 20 mio balance sheet total; (ii) net turnover of EUR 40 mio; and (iii) 250 employees. This does not, however, mean that diversity is no longer on the agenda of the Dutch Government.

The Supreme Court has again urged the legislature to consider whether the outright prohibition on professional litigation funding and the assignment of bare causes of action continues to be warranted as the ever-increasing cost of litigation is putting access to the courts beyond the reach of many.

While the Court accepted that this is an area in need of careful and considered legislative reform, it warned that unless a real effort is made by the legislature to improve access to justice, it will have "no option" but to step in, "undesirable and all as unregulated change might be."

Claims trading has become increasingly commonplace in today’s bankruptcy cases, typically with little need for policing by the courts.

In December 2017, Congress passed and President Trump signed the Tax Cuts and Job Act of 2017 (TCJA). Effective as of Jan. 1, 2018, the TCJA is a wide-ranging change to the Internal Revenue Code of 1986 (the Tax Code) affecting individual, corporate, and international taxation.

Lost amongst the many commentaries are two changes that have a negative impact on business debtors under the Bankruptcy Code: (1) reduction of the corporate tax rates and (2) elimination of the ability to carry back net operating losses.

Can we learn sufficient lessons from Carillion to avoid construction related insolvency closer to home?

1. PUTTING INSOLVENCY ON THE AGENDA

Following a High Court decision of 1 November 2017 , it seems that the High Court will assess an objection by a secured creditor to a personal insolvency arrangement (PIA) differently depending on whether the creditor is a bank (or other originating lender) or a loan purchaser that is not a bank.

In this regular briefing, we summarise recent cases, developments and trends relevant to the ongoing efforts to resolve the mortgage arrears crisis.

CASELAW

Personal Insolvency

A series of recent cases have shed further light on factors that a Court will take into account when hearing a debtor’s appeal of a secured creditor’s decision to reject a proposed Personal Insolvency Arrangement (PIA) under the Personal Insolvency Act 2012 (the 2012 Act).

On 22 May 2017, the High Court delivered judgment in favour of two homeowners, Paula and Colm Callaghan, allowing a significant write-down of their mortgage debt and rejecting a proposal by their lender, KBC, that the debt should instead be deferred or ‘warehoused’ for future enforcement.

BACKGROUND

The Callaghans had a mortgage with KBC for over €285,000 for their family home which was valued at just €105,000. The mortgage fell into arrears and the Callaghans sought to enter into a personal insolvency arrangement (PIA).