The effects of the recent fi nancial crisis and the ensuing recession continue to take their toll on municipalities in the United States, which are struggling with reduced revenues at the same time their residents have an increased need for government services.
As the prospects for business survival become ever tougher due to challenging economic conditions, administrators and liquidators are increasingly finding themselves having to justify to the courts whether or not costs should be treated as an expense of the administration or liquidation.
Sums incurred or paid as an expense of an administration or liquidation are, unlike debts incurred before the appointment of the administrator or liquidator, paid in preference to unsecured debts and also before the administrator or liquidator's fees and expenses.
"Does an insurance broker, after procuring an insurance policy for a developer on a construction project, owe a duty to apprise a subcontractor that was later added as an insured under that policy of the insurance company's subsequent insolvency?"
In this issue of first impression in California, the Fourth District Court of Appeals said "no." Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Insurance Services West, Inc. --- Cal.Rptr.3d ----,2012 WL 621346 (Cal.App.4 Dist.).
In the recent case of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 2012 WL 1912197 (May 29, 2012), the Supreme Court in a unanimous 8-0 opinion, delivered by Justice Scalia, held that the Bankruptcy Code statutory scheme mandates that secured creditors must be allowed to credit-bid in 363 sales of assets where the sale is incorporated into a plan of reorganization.
On May 15, 2012, the Eleventh Circuit Court of Appeals issued a fraudulent transfer ruling in TOUSA, Inc.'s chapter 11 case with wide-ranging implications for the financing community. As discussed herein, this decision weakens protections for secured lenders, especially when extending credit to distressed borrowers.
There have been a number of first instance decisions concerning the construction and effect of Section 2 (a) (iii) of the ISDA Master Agreement. The problem has been the conflicts between the various judgments, and in particular, with respect to the interpretation and effect of Section 2 (a) (iii). This has led to uncertainly as to how the Section is intended to operate.
Today, the Financial Services Authority (FSA) published Final Notices for Christchurch Investment Management Limited (Christchurch) and the firm's compliance officer, David Thornberry, for breaches of the FSA's client money rules (CASS rules).
This discussion is being provided to our clients and friends to analyze the challenges presented in this difficult economic environment when an FDICinsured institution experiences a capital difficulty and is directed by the Banking Regulators1 to restore the institution's capital adequacy.2 In the past four years, the FDIC has closed approximately 400 insured institutions—as of January 1, 2012, the FDIC has indicated that there were over 800 banks on its "problem bank list." The difficulties experienced by many of these institutions are summarized in this analysis—
We have seen an increasing number of pre-packs over recent years, how does a pre-pack work?
Numerous municipalities in California and elsewhere are struggling financially. Indeed, Harrisburg, Pennsylvania and Central Falls, Rhode Island have both recently filed for Chapter 9 protection. State governments may have neither the economic reserves nor the political will to bail out troubled cities and counties. These circumstances have raised the focus on Chapter 9 as a tool for reorganizing municipality debt obligations and has deepened the debate between states and their municipalities about the best strategies for addressing a fiscal crisis.