Case considering whether rent which accrued during an administration was payable in full as an expense of the administration or whether payment was a matter of discretion for the court.
R (on the application of Global Knafaim Leasing Ltd and another) v. Civil Aviation Authority and another
Reversing both the bankruptcy court and the district court, the U.S. Court of Appeals for the Third Circuit held that a trademark licensing agreement had been substantially performed and was therefore not subject to rejection under §365(a) of the Bankruptcy Code. In re Exide Technologies, Case No. 08-1872 (3d Cir., June 1, 2010) (Roth, J.) (Ambro, J., concurring).
KEY POINTS
- A US Bankruptcy Court decision held that loans to a homebuilding company that subsequently filed for bankruptcy constituted a fraudulent transfer.
On October 29, 2009, the California Court of Appeal, Sixth District, in Berg & Berg Enterprises, LLC v. Boyle, et al., unequivocally ruled that, under California law, directors of either an insolvent corporation or a corporation in the more elusively defined “zone of insolvency” do not owe a fiduciary duty of care or loyalty to creditors. In so ruling, California joins Delaware in clarifying directors’ duties when the corporation is insolvent or in the zone of insolvency.
Background
Many of us in the construction industry seem to be hearing the same old bed time story over and over again: A instructs B to do the work; B does the work; A does not pay B; for months the parties dispute the level of payment due; B becomes fed up waiting for payment and takes steps to wind up A.
Is this the most appropriate way to deal with a disputed debt?
The European Commission has proposed measures to protect independent travellers from financial loss if their airline collapses. Current rules provide tourists who book package holidays with protection covering brochure information, rights to cancel without penalty and airline or tour operator insolvency. However, 23% of travellers in the EU now book independently.
The Eastern District of Pennsylvania held that secured creditors do not have a right to credit bid their claim when the sale of a debtor’s assets is conducted under a plan of reorganization.
The bankruptcy court's opinion exemplifies the second guessing that can confront solvency opinion providers and highlights issues that providers should carefully vet with experienced legal counsel.
Structured finance transactions frequently subordinate a swap counterparty’s rights to termination payments upon termination of a swap by reason of counterparty default. Such a provision has recently been upheld by an English court. As the case concerns the insolvency of Lehman Brothers however, the US courts must also make a decision on the same provision.