What is a proprietary claim? A proprietary claim is a claim to own a specific asset or sum of money.

The continuing saga of the impact of the U.S. Supreme Court’s Stern v.

Introduction

Companies are habitually used as part of a corruption scheme. Such companies often have only a single director, or a small number of directors, and are beneficially owned by the wrong-doers.

Insolvency powers can be effective tools to obtain compensation for victims of fraud or corruption, in the right circumstances.

A state could, for example, apply to Court for a liquidator to be appointed over a company used for corruption.

When an insolvent entity files for bankruptcy, it can be tough to be a creditor. But holding equity — stock in a corporation or a membership interest in an LLC, a limited liability company — can be even worse. Under bankruptcy’s “absolute priority rule,” creditors generally must be paid in full before equity gets anything. That usually means that holders of equity, or claims treated as equity, get nothing.

A recent decision by the Bankruptcy Court for the Southern District of New York may enhance the ability of bankruptcy trustees and creditors committees to challenge allegedly fraudulent transfers that could qualify for protection under the “safe harbor” of section 546(e) of the Bankruptcy Code. 

1. On 11 March 2015, the High Court delivered its decision in Fortress Credit & Anor v Fletcher & Ors [2015] HCA 10.
2. The appellant was Fortress Credit.

1. On 11 March 2015 the High Court delivered its decision in Grant Samuel & Ors v Fletcher & Ors [2015] HCA 8.
2. The appellants were Grant Samuel Corporate Finance Pty Limited and JP Morgan Chase Bank.

Risky Business. When a debtor is a licensee under a trademark license agreement, does it risk losing those license rights when it files bankruptcy? The question had not been answered in a Delaware bankruptcy case until Judge Kevin Gross recently addressed it in the In re Trump Entertainment Resorts, Inc. Chapter 11 case. A lot was riding on the decision, not just for the parties involved but, given how many Chapter 11 cases are filed in Delaware, more generally for other trademark licensees and owners as well.

Winding Down. If a corporation’s board of directors decides that the business needs to be wound down, there are a number of legal paths to consider. Determining the best approach is fact-dependent, and the corporation and its board should get legal advice before making a decision.

The Senate has announced a national inquiry into insolvency in the Australian construction industry (Inquiry).^[1]