Four years after New York grocery chain Tops’ exit from Chapter 11, U.S. Bankruptcy Judge Robert Drain ruled that the Tops’ Chapter 11 trustee may proceed with litigation against certain private equity investors. The trustee alleged that the investors drove the company into bankruptcy by paying themselves more than $375 million in dividends while neglecting to address Tops’ unfunded pension liabilities.
This week’s TGIF considers a recent case where a court ordered that a company’s winding up be stayed, with a view to being terminated, pending payment of the liquidator’s remuneration.
Key takeaways
“… [B]ecause Congress has not clearly abrogated the solvent-debtor exception,” the U.S. Court of Appeals for the Fifth Circuit held that a reorganized solvent debtor had to “pay what it promised now that it is financially capable.” In re Ultra Petroleum Corp., 2022 WL 8025329, *1, (5th Cir. Oct. 14, 2022) (2-1). Moreover, “given [the debtor’s ] solvency, post-petition interest is to be calculated according to the agreed-upon … contractual default rate …,” not the “much lower Federal Judgment Rate …,” held the court. Id.
This week’s, TGIF considers the Court of Appeal’s decision in Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [2022] WASCA 132, handed down on 4 November 2022 in favour of the Commonwealth Bank of Australia Ltd and Lloyds Banking Group (Financiers).
Key takeaways
This week’s TGIF considers Hundy (liquidator), in the matter of 3 Property Group 13 Pty Ltd (in liquidation) [2022] FCA 1216, in which the Federal Court of Australia granted leave under rule 2.13(1) of the Federal Court (Corporations) Rules 2000 (Cth) (FCCR) for intervening parties to be h
In a recent decision handed down in Gold Valley Iron Pty Ltd (in liq) v OPS Screening & Crushing Equipment Pty Ltd [2022] WASCA 134, Liquidators succeeded in establishing an ‘equipment lease with an option to purchase’ clause as being a security interest under the Personal Property Securities Act 2009 which needed to be registered by the owner.
Key takeaways
The “connections” of the chairman (“W”) of the debtor’s investment bank (“S”) to his family’s foundations do “not give rise to an actual, active conflict of any kind,” held a bankruptcy judge in the Southern District of New York on Oct. 17, 2022. In re SAS A.B., 2022 WL 10189110, *3 (Bankr. S.D.N.Y. Oct. 17, 2022). According to the court, it “is only through strained speculation [by the U.S. Trustee] that a potential issue can even be posited.” Accord, In re Harold & Williams Dev. Co., 977 F.2d 906 (4th Cir.
This week’s TGIF examines the decision in Re Farley Bay (in liq) [2022] VSC 604, where an insolvency proceeding was successfully transferred to the Federal Circuit and Family Court despite the Supreme Court of Victoria considering the Applicant’s ultimate proprietary claims to be ‘weak’.
Key takeaways
“…[B]ecause Congress has not clearly abrogated the solvent-debtor exception,” the U.S. Court of Appeals for the Fifth Circuit held that a reorganized solvent debtor had to “pay what it promised now that it is financially capable.” In re Ultra Petroleum Corp., 2022 WL 8025329, *1, (5th Cir. Oct. 14, 2022) (2-1). Moreover, “given [the debtor’s ] solvency, post-petition interest is to be calculated according to the agreed-upon … contractual default rate …,” not the “much lower Federal Judgment Rate . . .,” held the court. Id.
This week’s TGIF considers a recent case in which the Federal Court of Australia upheld a liquidator’s decision to reject a proof of debt for damages relating to a failed sale of commercial property.
Key takeaways