A dispute over whether the Federal Energy Regulatory Commission (“FERC”) can order one of Northern California’s largest natural gas and electric companies – Pacific Gas & Electric Company (“PG&E”) – to reject wholesale power purchase contracts (“PPCs”) will be decided by the United States Bankruptcy Court for the Northern District of California (“Bankruptcy Court”), instead of the United States District Court for the Northern District of California (“District Court”).

Law360

Reprinted with permission from Law360

In a Feb. 20, 2019, opinion in In re Titus,[1] the U.S. Court of Appeals for the Third Circuit, in an opinion authored by Judge Thomas Ambro, announced a new test for calculating damages in fraudulent transfer actions involving tenancy by the entireties transfers.

Facts

With the Court of Appeal’s decision in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd just a few weeks old, it is hardly surprising that people are looking again at the relationship between insolvency law and adjudication, noting that in cases of liquidation where parties have a cross claim, construction law defers to insolvency law.

This was clearly illustrated in Gregg Nowak Ltd v CSS Electrical Distributors Ltd, which came before HHJ Bailey earlier this month.

Background

This was a conjoined appeal alongside Bresco v Lonsdale. In this case, Cannon and Primus had already participated in an adjudication, with the decision of the adjudicator favouring Primus. Primus would later enter into a Company Voluntary Arrangement.

The CVA was made on the basis that, although Primus was insolvent at the time, it would be able to satisfy its creditors if it were able to recover from Cannon and other third parties through litigation and adjudication. This was preferable to liquidation.

Insolvency Set-Off and Construction Contract Adjudications in light of Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (electrical) Ltd; Cannon Corporate Ltd v Primus Build Ltd [2019] EWCA Civ 27

This case concerned both the appeal in Bresco v Lonsdale and Cannon Corporate v Primus Build. The present case comment is only concerned with the former.

Background

Bresco appealed to set aside the order of an injunction from Fraser J. That injunction prevented the continuation of an adjudication in which Bresco and Lonsdale (in liquidation) sought sums from each other in claims and cross-claims.

Introduction

The recent decision of Andrew Burrows QC, sitting as a Judge of the High Court, in Palliser Limited v Fate Limited (In Liquidation) [2019] EWHC 43 (QB), is a useful reminder of the difficulties that can arise where one party (here a tenant) relies on another (its landlord) to take out insurance.

The Facts

In 2010, a fire started at the ground floor restaurant owned and operated by a company called Fate Limited (“Fate”). It was not in dispute that the fire was caused by Fate’s negligence.

Pacific Gas and Electric Company and PG&E Corporation (together “PG&E”) filed for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California on January 29, 2019.

Re SHB Realisation Ltd (formerly BHS Ltd); Wright and another (as joint liquidators of SHB Realisations Ltd (formerly BHS Ltd)) v Prudential Assurance Companies Ltd [2018] EWHC 402 (Ch); [2018] All ER (D) 58 (Mar)

Synopsis

The Bankruptcy Protector

On January 3rd, the United States Court of Appeals for the Tenth Circuit issued an opinion in U.S. v. Parish Chemical Company, in which it addressed the issue of equitable mootness in a non-bankruptcy appeal.

Facts of the Case