Notice of assignment
Notice of assignment can be given by either the assignee or assignor under the Consumer Credit Act 1974 (CCA).
This was the High Court's finding in Smith v 1st Credit (Finance) Ltd and another. Smith was notified by her credit card company that her credit card debt had been assigned to 1st Credit. 1st Credit wrote to Smith shortly afterwards confirming the assignment and advising how payment could be made. Smith failed to pay and was made bankrupt by 1st Credit which subsequently repossessed and sold Smith's property.
- Historical Background
Unlike the United States, Canada was not created by a unilateral declaration of independence from the colonial occupation of England.
The ISDA Master Agreement1 serves as the basis for the vast majority of overthe- counter derivatives transactions. Two fundamental principles of the ISDA Master Agreement are: (1) upon the default of one party to a swap, the nondefaulting counterparty may terminate the swap, calculate its loss and claim damages; and (2) the obligation of each party to a swap to make payments to the other is subject to the satisfaction of the conditions precedent that no default has occurred with respect to the other party.
In 2008, the Supreme Court of Canada ruled in Saulnier5 that a commercial fishing licence constitutes ‘property’ within the context of the Bankruptcy and Insolvency Act (“BIA”) and the Nova Scotia PPSA6, thereby allowing the trustee in bankruptcy to seize the licence from the bankrupt.
Gym chain Fitness First is the latest high street name to propose a company voluntary arrangement (CVA) to its creditors. The chain currently runs more than 140 clubs in the UK but the arrangement proposes that 67 will be transferred to other operators within six months. Landlords will be reviewing the terms of the proposed CVA carefully.
A CVA is an agreement reached by a corporate debtor with its unsecured creditors. It is generally seen as a quicker and less formal route out of trading difficulties than administration.
The court will unravel a transaction where it appears to have been entered into to place assets beyond the reach of creditors.
This was the case in Ambrose sub nom Garwood v Amborse & Ambrose, where the trustee in bankruptcy of Mr Ambrose applied for declaratory relief and an order for the possession and sale of Mr & Mrs Ambrose's property.
Key points
- The High Court has ruled that, where a tenant goes into administration, rent which is payable in advance and falls due before the commencement of the administration is not recoverable by the landlord as an administration expense
- Landlords must take their place with other unsecured creditors in relation to sums payable before the appointment of administrators, even if they relate to a period during which the administrators had use of the property
Background
According to a recent Delaware bankruptcy court decision, avoidance and disallowance risk travel with a distressed claim. This decision highlights the importance of diligence and the benefits provided by purchasing distressed debt on “distressed” documents.
The debt of a troubled company is trading in the secondary market at a significant discount because the company is highly levered and is at risk of default.
T he LBIE Client Money Judgment on the appeal from the Court of Appeal has been eagerly awaited by creditors and secondary claims trading market participants in order to give clarity to the funds available for the client money pool and to determine which clients will have the benefit of those funds.
The decision has implications for creditors of MF Global UK Limited and all clients of UK financial firms.
BACKGROUND
In a recent edition of Fully Secured (September 29, 2011 – Volume 2, No. 3), the decision of the Ontario Court of Appeal in Re Indalex Limited was discussed, in which the Ontario Court of Appeal held that a statutory deemed trust claim arising out of a pension plan wind-up deficiency ranked in priority to debtor in possession (“DIP”) financing.
There have been several recent developments with respect to this decision since the date of that publication.