Most or all creditors who lend to farmers will be familiar with the Farm Debt Mediation Act, S.C. 1997, c. 21 (the “FDMA”) and the need to serve a notice under the FDMA before taking action against a farmer. However, there are some details of how the FDMA operates that may not be as well-known. This piece will highlight some of those details.
“An appeal”, explained one of my law school professors as he stretched out his arms, “is like taking off in a plane. Unless you understand the rules of physics, you won’t get the plane off the ground, no matter what grade of jet fuel is in the tank.”
Court appointed receivers commonly assume control over all of a debtor’s property. In assuming that control, the receiver may collect various pieces of the debtor’s leased equipment, and include that equipment in a sale of the debtor’s assets. Further, the court order appointing the receiver will typically grant the receiver a priority charge over all such equipment for its fees, including the fees of its counsel, and any borrowings it may make in the course of the receivership.
One of the most vexing commercial insolvency issues is the competition between creditors with security on environmentally troubled property and environmental authorities looking for deep pockets to fix the environmental problems. From a creditor’s point of view, a recent Alberta decision is a potential respite from environmental obligations being imposed on creditors of the owners of environmentally troubled property.
In the event of bankruptcy, creditors are entitled to disclosure of the bookkeeping of the estate under certain conditions. In its decision dated 8 April 2016 (ECLI:NL:HR:2016:612), the Dutch Supreme Court ruled that this right is limited and depends on the purpose of the disclosure. Creditors are not entitled to disclosure if the purpose is to retrieve information to support their claim against a third party.
Al sinds 2004 schrijft de MiFID richtlijn voor dat dat beleggingsondernemingen financiële instrumenten (waaronder verhandelbare derivaten) veilig en bankruptcy remote moeten aanhouden voor hun cliënten. In 2005 bleek waarom: bij het faillissement van Van der Hoop Bankiers bleek dat beleggers geen aanspraak meer hadden op hun derivaten, maar concurrent schuldeiser van de bank waren geworden.
De Minister van Justitie beloofde daarop met wettelijke bescherming te komen. Die is er nu.
Geen afgescheiden vermogen
In a recent judgment, the Dutch Supreme Court ruled that in the event of a bankruptcy whereby the bankruptcy receiver has wrongfully collected receivables which were pledged to a secured creditor and the total value of the assets of the bankrupt estate was insufficient to pay all debts, the bankruptcy receiver was allowed to recover its salary from the proceeds of that wrongful collection with priority over the claim of that secured creditor.
On 5 February 2016, the Dutch Supreme Court (“Supreme Court“) ruled (ECLI:NL:HR:2016:199) that an estate claim (boedelvordering) based on damage suffered by a pledge holder, caused by the wrongful collection of claims encumbered by a right of pledge by a bankruptcy trustee, does not have priority over the estate claim relating to the remuneration of the trustee.
De wetsvoorstellen civielrechtelijk bestuursverbod en herziening strafbaarstelling faillissementsfraude behoren tot het Wetgevingsprogramma Herijking Faillissementsrecht en zijn gericht op fraudebestrijding. De verwachting was dat beide wetsvoorstellen op 1 januari 2016 in werking zouden treden, maar dit is niet gehaald.
On 2 December 2015 the draft bill on modernization of bankruptcy proceedings entered into public consultation. The bill is part of the Dutch legislative programme to improve and modernize bankruptcy law, known as Wetgevingsprogramma Herijking faillissementsrecht in the Netherlands.