In the English High Court, the joint administrators of four English companies within the former Lehman Brothers group sought directions from the Court in respect of a proposed settlement. The settlement would put to rest substantial inter-company claims including those at issue in the 'Waterfall III' proceedings.

In a second application heard on the same day, Hildyard J considered an application by the administrators of Lehman Brothers Europe Limited (LBEL) for directions that would enable a surplus to be distributed to the sole member of LBEL while LBEL remained in administration. The proposed scheme had material benefits for both shareholders and creditors. The administrators acknowledged that the orders sought were an indirect means of circumventing the Insolvency Act 1986 (UK), which does not expressly provide for directors to make distributions during an administration.

The Court of Appeal has recently dismissed an appeal from the High Court's judgment (discussed in our September 2016 update) setting aside a compromise under Part 14 of the Companies Act 1993 after finding that the challenging creditors, who had voted against the compromise, had been unfairly prejudiced by the decision to call only one meeting of creditors.

In McIntosh v Fisk [2017] NZSC 78, the New Zealand Supreme Court had to consider whether the liquidators of a Ponzi scheme were entitled to recover from an investor a payment that the investor had received shortly before the appointment of the liquidators.

A recent decision by the Ninth Circuit Court of Appeals has fanned the smoldering dispute among courts regarding the scope of asset sales in bankruptcy. In the In re Spanish Peaks Holdings II, LLC decision, the Ninth Circuit affirmed a lower court’s holding that sale of commercial real estate can, in certain circumstances, be free and clear of all liens, claims, encumbrances, and interests, including a leasehold interest. In other words, a tenant of a bankrupt landlord could find itself with no interest in the property following the sale.

On June 25, 2017, Takata’s US arm, TK Holdings Inc.

The case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) concerned the liability of a stockbroking company for failing to investigate fraudulent transactions. 

In Akers & Ors v Samba Financial Group (Rev 1) [2017] UKSC 6, the UK Supreme Court confirmed that British insolvency officers can only void dispositions of a company's assets held on trust in certain circumstances. 

The Supreme Court in McIntosh v Fisk upheld the Court of Appeal decision permitting the liquidators of Ross Asset Management Ltd (RAM) to claw back the fictitious profits paid out to Mr McIntosh.  However the claw back did not apply to the original investment of $500,000.

The majority found that McIntosh had a defence for the $500,000 as he had provided "real and substantial valuable consideration".  Once RAM misappropriated the $500,000 it became indebted to McIntosh for that amount, this equated to the provision of valuable consideration.

This question arose in Queensland recently in Linc Energy Ltd (in liq): Longley & Ors v Chief Executive Dept of Environment & Heritage Protection.  The Supreme Court of Queensland found that the liquidators of Linc Energy were not justified in causing the company not to comply with an environmental protection order that required the company to maintain equipment that the liquidators had disclaimed.