The Bankruptcy and Diligence (Scotland) Bill was passed by the Scottish Parliament on 6 June 2024 and a date for it coming into force is awaited.

In its recent opinion in Raymond James & Associates Inc. v. Jalbert (In re German Pellets Louisiana LLC), 23-30040, 2024 WL 339101 (5th Cir. Jan. 30, 2024), the Fifth Circuit held that a confirmed bankruptcy plan enjoined a party from asserting certain indemnification counterclaims against a plan trustee because the party did not file a proof of claim.

Background

Whether a solar system is a “fixture” sounds like a mundane legal issue – but it has significant implications for the residential solar industry and for the financing of residential solar systems. If a system is regarded as a “fixture” of the house to which it is attached, then the enforceability and priority of the finance company’s lien on the system will be subject to applicable real estate law.

If your company is named in a new lawsuit or receives a EEOC charge, part of your review process should include checking to see if the filing complainant or plaintiff has a pending bankruptcy action. If so, the next step is to see if the claimant disclosed their lawsuit or administrative complaint in his or her bankruptcy petition. If not, you may have a successful estoppel argument.

This morning, after much anticipation, the Supreme Court has released its judgment in Yan v Mainzeal Property Construction Limited (in liq) [2023] NZSC 113, largely upholding the Court of Appeal's decision, and awarding damages of $39.8m against the directors collectively, with specified limits for certain directors. The decision signals that a strong emphasis on 'creditor protection' is now embedded in New Zealand company law.

In recent years much ink has been spilled opining on the so called 'Quincecare' duty of care, and the limits of it (see links to our recent insolvency law updates covering the topic below). The judgment in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 was a first instance decision on Steyn J, in which he found that a bank has a duty not to execute a payment instruction given by an agent of its customer without making inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.

With insolvencies expected to increase in the UK’s construction industry this year, as higher interest rates, inflation and an anticipated domestic recession dampen demand for housing and new commercial projects, we are often asked what protections an Employer can put in place in their contract to assist in the event of their contractor going into insolvency.

These issues should be considered at the time of entering into contracts and we have set out below some useful provisions which may assist should an insolvency occur during a project. These are:

For at least the past decade, federal bankruptcy courts have routinely prohibited cannabis businesses from seeking protection under federal bankruptcy law, regardless of whether a cannabis business is legally operating under state law.

Our last newsletter commented on high inflation, dwindling business confidence and international supply chain issues. Those factors continue to influence the economic outlook, with some businesses unable to survive the strengthening head winds impacting the economy. The consumer price index increased 7.2 percent in the 12 months to December 2022, remaining stubbornly high despite significant movements in the official cash rate to 4.5%, up significantly from the 0.25% it was sitting at in October 2021. ANZ's economic forecast warns that a "policy induced recession is looming".

The Director of the Justice Department’s U.S. Trustee Program (USTP), which oversees the administration of bankruptcy cases, is about to change for the first time in nearly 20 years. Clifford White will be stepping down from the role and consumer advocate Tara Twomey will be taking up the mantle.