The Seventh Circuit Court of Appeal’s recent decision in State Bank of Toulon v. Covey (In re Duckworth)Case Nos. 14-1561 and 1650 (7th Cir. November 21, 2014) illustrates how a banker’s seemingly minor mistake in drafting secured loan documents granting a lien to secure a non-existent obligation can lead to avoidance of a lender’s security interest by the borrower’s bankruptcy trustee.
The High Court ruling in Schroder Exempt Property Unit Trust and another v Birmingham City Council [2014] EWHC 2207 provides helpful clarification on whether or not a landlord is liable to pay business rates on an empty property following the liquidation of a tenant and the subsequent disclaimer of the lease.
Background
On September 9, 2014, the Bankruptcy Court for the Southern District of New York held that certain senior lenders were not entitled to the benefit of their indentures’ make-whole premiums, because they had voluntarily accelerated their notes. As we have reminded our readers several times, careful drafting of what may seem like basic boilerplate provisions is important. Seemingly benign stand-alone provisions may have unintended consequences when linked together in a single agreement.
In earlier posts, we discussed rulings by two bankruptcy courts, one in Delaware and one in Virginia, in which the potential chilling e
Lenders typically have extensive requirements for what inventory will be deemed “eligible” and included in a borrower’s borrowing base for purposes of determining how much the lender is required to lend. One of those typical requirements is that the inventory be owned by the borrower and located at a borrower location in the United States of America, where it will be subject to the Uniform Commercial Code and amenable to an Article 9 security interest.
Bankruptcy Remote? Maybe Not
Whether insurer liable to repay purchasers’ deposits following dissolution of developer/policy interpretation
The recent unanimous decision of the United States Supreme Court (the “Court”) in Clark v. Rameker, 573 U.S. _____ (2014) held that inherited IRAs do not constitute “retirement funds” within the meaning of section 522(b)(3)(C) of the United States Bankruptcy Code. Consequently, inherited IRAs are not exempt from creditor claims in bankruptcy proceedings. The Court’s holding highlights the importance of sound financial and estate planning to protect inherited retirement plan assets from claims of a beneficiary’s creditors.
Background
On 21 October 2013, the financially troubled company Hainan PO Shipping applied for bankruptcy and winding up before the People’s Court of Hainan Yangpu Economic & Development Zone (“Yangpu Court”). The Yangpu Court approved the application on 31 October 2013, and the Court has since nominated the administrators of Hainan PO Shipping.
Sadly, sometimes tragedy strikes, as it did for the Montreal Maine & Atlantic Railway Ltd. in July, 2013, when one of its trains carrying crude oil derailed and exploded, resulting in 47 deaths, significant property and environmental damage, and the bankruptcy of the Railway. The Railway had a business interruption insurance policy, a settlement was reached with the insurer and the question of who was entitled to the multi-million-dollar settlement arose in the bankruptcy. In re Montreal Maine & Atlantic Ltd., 2014 Bankr. LEXIS 1628. 59 Bankr. Ct. Dec. 101 (Bankr. D.