Court holds that distributions made pursuant to priority payment provisions contained in CDO transactions are protected by Section 560 of the Bankruptcy Code

Summary

Pension scheme trustees will generally be concerned to try to ensure that the “safety net” provided by the Pension Protection Fund (PPF) remains potentially available for their scheme.

E’ stato pubblicato sulla Gazzetta Ufficiale n. 59 del 3 maggio 2016 il Decreto Legge recante “Disposizioni urgenti in materia di procedure esecutive e concorsuali nonché a favore degli investitori in banche in liquidazione” (il Decreto). Il Decreto dovrà essere convertito in legge entro il 2 luglio 2016 (60 giorni dalla data di pubblicazione). Di seguito una breve descrizione delle misure più rilevanti.

Una nuova forma di garanzia, il “pegno mobiliare non possessorio”

A law decree providing for urgent measures on guarantees, foreclosure and insolvency proceedings and aiming at restoring damages suffered by investors of banks under liquidation, was published on the Italian Official Gazette n. 59 on 3 May 2016 (the Decree). The Decree must be converted into law by the Italian Parliament by 2 July 2016 (i.e. within 60 days from the date of its publication) to become fully effective.

“Pegno mobiliare non possessorio”, an Italian floating security interest

There have been a number of recent instances, including this year, of quoted companies calling general meetings to seek shareholder approval to remedy dividends that were paid unlawfully. Invariably these have been for non-compliance with a statutory formality rather than because the company did not have sufficient distributable profits to make the dividend.

Why are companies prepared to suffer the embarrassment and expense of going to their shareholders to fix the breach rather than simply doing nothing?

The Court of Appeal has reiterated some important rules for funders involved in debt purchase. Banking Litigation specialist Alasdair Urwin looks at the recent case of Bibby Factors Northwest v HDF and MCD [1].

Buyer beware

This case concerned a factoring agreement, pursuant to which a funder (Bibby) purchased unpaid invoices from another company (the Assignor), including debts owing from the defendant companies (the Customers).

Section 546(e) of the bankruptcy code bars state law constructive fraudulent conveyance claims asserted by creditors seeking to augment recoveries from a bankruptcy estate

Earlier today, the Second Circuit Court of Appeals issued a decision in In re Tribune Company Fraudulent Transfer Litigation, No. 13-3992-cv, holding that the Bankruptcy Code’s safe harbor of Section 546(e) (the Safe Harbor) prohibits clawback claims brought by creditors under state fraudulent transfer laws to the same extent that it prohibits such claims when brought by a debtor.

Overview

In November 2015, the German legislator passed the Resolution Mechanism Act (Abwicklungsmechanismusgesetz, AbwMechG). The law introduces, among other things, Section 46f (5) et seqq. of the German Banking Act (Kreditwesengesetz, KWG), which requires that claims under certain unsecured debt instruments be subordinated to general senior unsecured obligations in an insolvency proceeding involving a German bank.

Freshfields Bruckhaus Deringer Recovery and resolution planning October 2015 1 The Financial Services and the Treasury Bureau of the Hong Kong Government (FSTB) in conjunction with the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC), and the Insurance Authority (IA)1 on 9 October 2015 published a paper entitled An Effective Resolution Regime for Financial Institutions in Hong Kong: Consultation Response and Certain Further Issues (CP3).2 Background Following from the recent global financial crisis, the G20 tasked the Financial Stability Board (FSB) with

In Stevensdrake Ltd v Hunt and others ^[1] the liquidator of Sunbow Limited, Mr Hunt, had brought a claim against Sunbow's former administrators. Mr Hunt entered into a conditional fee agreement (CFA) with the solicitors instructed to pursue the claim (Stevensdrake). The CFA stated "if you [Mr Hunt] win your claim, you pay our basic charges, our disbursements and a success fee". A settlement was agreed but one of the former administrators failed to pay the agreed sum.