Introduction

In this Banking Reform updater we examine the single resolution mechanism (SRM), which together with the single supervisory mechanism (SSM) (Banking Reform updater 10) forms the key pillars of the EU Banking Union.

What is the SRM?

Declining to follow a 2012 decision, the High Court has ruled that a bankrupt’s unexercised rights to draw his pension did not represent income to which he was entitled within the meaning of the Insolvency Act 1986, and so did not form part of the bankruptcy estate.

Background

The process of repossession will involve complex issues of fact and law. Each one is different depending upon the jurisdiction involved, the approach of the operator and the attitude of the relevant authorities.

Information and planning

1. What is the risk if a counter-party is located in an exiting member state?

What might be the funding risk?

A member state exit is likely to result in increased liquidity problems and less available funding as financial institutions manage their exposure to the Eurozone. Businesses may find that traditional sources of finance (loans, bonds etc) are less easy to obtain or raise.

Intra group funding may also be problematic if there are intra-company loans to subsidiaries located in risk member states and those subsidiaries are having difficulty meeting their payment obligations under such loans.

On November 7, 2014, the City of Detroit’s historic Chapter 9 municipal bankruptcy case culminated with the confirmation of the City’s proposed plan of adjustment (after eight amendments), and the approval of various related settlements. Although little more than a month has passed, a great deal of ink has already been spilled on what the City’s bankruptcy case means, particularly from the viewpoint of the municipality and its citizens.

The Momentive Decisions: Cram-Down Interest Rates and Make-Whole Mania

Again, of interest to all schemes providing defined benefits is the recent settlement in the litigation involving the Lehman Brothers Scheme, where the payment of £184 million, representing costs of the buying-out benefits, has been agreed.

Following a detailed investigation by TPR commencing in 2008, and a legal battle through the hierarchy of courts up to the Supreme Court (SC), members of the Lehman Brothers Pension Scheme will receive their full benefits after a settlement was reached on 18 August 2014.

On Saturday, June 28, Puerto Rico Governor Alejandro Garcia Padilla signed into law the euphemistically-named “Puerto Rico Public Corporation Debt Enforcement and Recovery Act” (the “Act”).

Introduction

On Tuesday 10 June 2014 in the Australian Capital Territory Industrial Magistrates Court, an early mention in the Kenoss Contractors case was heard.  This case includes a prosecution of both an organisation for allegedly failing to meet the primary health and safety duty and an officer for allegedly failing to exercise due diligence under the Work Health and Safety Act 2011 (ACT) which commenced on 1 January 2012.  This case is ostensibly the first prosecution of an officer under the new harmonised WHS laws.