No equipment lessor wants to find itself a creditor of a lessee in a reorganization case under chapter 11 of the U.S. Bankruptcy Code (the Bankruptcy Code). However, when such a situation arises, a lessor is not without recourse – even where the facts give rise to situations not specifically addressed by the Bankruptcy Code.
It is well established that the type of recognition granted by the recognising court under the UNCITRAL Model Law will depend on whether the originating proceedings are ‘foreign main’ or ‘foreign non-main’ proceedings, which in turn hinges on the centre of main interests (COMI) of the insolvent entity.
In a recent application for directions from the High Court, the Office of the Director of Corporate Enforcement (the “ODCE”) brought a motion to compel a liquidator contest an appeal by directors of a restriction order made against them in the High Court.
Section 683 of the Companies Act 2014 (“CA14”) requires the liquidator of an insolvent company to apply for an Order restricting the directors. It does not require liquidator to contest an appeal by directors. The ODCE ultimately withdrew the application and paid costs, but the application raises concerns for all liquidators.
In a decision with sweeping consequences for equipment lessors, the bankruptcy court (SDNY) in Republic Airways held that a liquidated damages provision in a true lease is an unenforceable penalty if it provides for the unconditional transfer of residual value risk or market risk only upon default, without a cognizable connection to any anticipated harm caused by the default itself. Importantly for lessors and lenders alike, the bankruptcy court held that the unconditional guaranties of such obligations in favor of the lessor violated public policy and were unenforceable.
Virtually all bankruptcy courts faced with the question of whether growers or dispensers of cannabis and cannabis products can take advantage of the protections afforded by the federal bankruptcy laws have said, no, they cannot.
R&I Alert Restructuring & Insolvency News January 2019, Issue 1 In This Issue: • Can a junior lien holder obtain discovery from a senior lien holder? 1 • Watch your language.
The sale of gift vouchers and their terms and conditions is largely unregulated in Ireland.
Although there is no specific legislation, gift vouchers provided to consumers are subject to the provisions of general consumer protection legislation, such as the Consumer Protection Act 2007.
Gift vouchers that cover a wide range of traders and retailers such as the “All4One” vouchers come within the definition of “electronic money” in the European Communities (Electronic Money) Regulations 2011 are subject to the provisions of those Regulations.
On August 26, 2018, the UK government issued its response to its consultation on insolvency and corporate governance. The consultation sought views on how the risk of company failure could be reduced by improving the corporate governance and insolvency framework.
For many decades, companies in the business of leasing “over-the-road” vehicles such as trucks, tractors, and trailers, have used terminal rental adjustment clause (TRAC) leases to maximize the value they can provide to their customers. Traditionally speaking, TRAC leases combine the tax advantages of leasing with an option to purchase the equipment at the end of the lease term for a residual amount determined at the inception of the lease. Since 1981, it has been well-settled that TRAC leases constitute “true” leases, and not disguised financing transactions, for federal tax purposes.
Trademark licensing is a driving force in business relationships. One common example is where one business owns a trademark, which it licenses out to other companies who manufacture and sell the products bearing the mark. But, what happens if the trademark owner goes bankrupt? Bankruptcy law gives a debtor the right to “reject” contracts to free itself of obligations, but if a trademark owner/licensor “rejects” a trademark license agreement, how does that affect the trademark licensee?