Two days before Christmas, the Supreme Court of New South Wales delivered a bonus for the general unsecured creditors of the collapsed discount giant Retail Adventures, and confirmed the requirements for deeds of company arrangement.
Deeds of Company Arrangement
Today the High Court of Australia handed down a decision which confirms a liquidator has the green light to disclaim leasehold interests in land (Willmott Growers Group Inc v Willmott Forests Limited (receivers and managers appointed)(in liquidation)).
Due to the way in which the case came before the Courts, the High Court did not consider the application of s568B of the Corporations Act 2001 (Cth) (Act).
This section allows tenants to challenge in Court the liquidator’s disclaimer.
Affiliated Lender Provisions and Debt Buybacks - Unenforceability of Bankruptcy Voting Proxies Expose Flaws in “Market Standard” Provisions
ASIC suspended the Australian Financial Services Licence of LM Investment Management Limited for two years this week for being an externally managed vehicle (voluntary administrators were appointed in March 2013). The practical effect of the suspension will mean that LM Investment Management won’t continue managing its nine funds. ASIC is also investigating the complex structure of the business and their related party transactions with the principal, Peter Drake.
An issue that is often overlooked, but should be considered in the context of large project transactions, is the potential insolvency of contractors and subcontractors. A bankruptcy proceeding involving a key contractor can cause headaches and costly delays, particularly if title to goods or work completed has not been transferred to a project owner. Accordingly, anticipating these types of issues and accounting for them in negotiating construction and supply contracts is an important step in any large project transaction.
In a pro-debtor opinion released on February 26, 2013, the Fifth Circuit Court of Appeals held that a debtor may “artificial impair” claims in a class to obtain an impaired and accepting class of claims as required by section 1129(a)(10) of the Bankruptcy Code. Western Real Estate Equities, L.L.C. v. Village at Camp Bowie I, L.P. (In re Village at Camp Bowie I, L.P.), No. 12-10271, 2013 WL 690497 (5th Cir. Feb. 26, 2013).
Statutory Background to the Artificial Impairment Issue
A recent decision in the protracted litigation by lenders of Extended Stay to recover under guaranties executed by owners of Extended Stay highlights the need for clear and unambiguous drafting in intercreditor agreements.
Most people think of an oil and gas mineral “lease” as, so named, a lease. However, this common thinking is not necessarily accurate, both with respect to state and federal law and in particular in the bankruptcy courts in the United States.
In an important opinion released on November 27, 2012, Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York transferred the Patriot Coal Corporation (Patriot Coal) chapter 11 bankruptcy cases from the Southern District of New York to the Eastern District of Missouri. This decision comes as a surprise to many observers who had expected, based on prior failed attempts to change venue in Enron and other large cases filed in the Southern District of New York, that Judge Chapman would defer to the Debtor’s choice of venue.
The IRS and Treasury recently proposed regulations that, if finalized, would permit an employer in bankruptcy to amend its defined benefit plan to eliminate certain optional forms of benefit, including lump sum payments.