Every passing month seems to bring with it a new set of “market making” events that consistently catapults the deal and debt financing economy in a new direction. Nonetheless, there are certain trends that the JMBM attorneys on the “financing frontlines” see repeatedly, and this fall seemed as good a time as any to convey them. By sharing these points, we hope to better prepare our friends, colleagues and clients for navigating through the current debt and restructuring markets, in preparation for the months and quarters that lie ahead.
Why is this case of interest?
The ongoing litigation between Mr Palmer and Northern Derbyshire Magistrates Court relates to the guilty verdict handed to Mr Palmer who was acting as an administrator and charged with an offence contrary to the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA).
Gawain Moore, Ashley Armitage and Oliver Wheeler discuss the sanctioning by the Business and Property Courts in Leeds of the first creditor-led Part 26A restructuring plan.
The Supreme Court’s decision in BTI v Sequana & Others represents the most significant ruling on the duties of directors of distressed companies of the past 30 years. It is the first occasion on which the Supreme Court has addressed whether company directors owe a duty to consider or act in accordance with the interests of the company’s creditors when the company becomes insolvent, or when it approaches, insolvency (the creditor duty). The judgment is lengthy, but can be boiled down to the following key points.
Originally published in November 2008 on HotelLawBlog.com, then updated in 2010 for our Lenders Handbook for Troubled Hotels, we have updated this article through May 2020 to assist industry friends in dealing with distressed loans provoked by the COVID-19 crisis.
Hotel Lawyers: Lender tips on forbearances, loan modifications, recapitalizations, receiverships, workouts, turnarounds, restructurings, and bankruptcies
CMBS lenders and others use SPEs for expedited remedies
Hotels, resorts, marinas, retail mixed-use, and other hospitality-related assets will likely continue to present challenges to lenders seeking expedited relief from bankruptcy stay provisions available to creditors in “single asset real estate” bankruptcy cases.
A recent High Court case has provided welcome clarity for LPA and fixed charge receivers as to the scope of their duty of good faith and potential conflicts of interest. Walker Morris’ Housing Management & Litigation Partner Karl Anders and Banking, Restructuring and Insolvency Director Owen Ormond explain.
Why is this case of interest?
HMRC has issued a consultation on the announcement in last year’s Budget to introduce legislation to restore HMRC’s position as a secondary preferential creditor in company insolvencies. This may impact upon pension schemes.
(Bankr. S.D. Ind. Dec. 4, 2017)
The bankruptcy court grants the motion to dismiss, finding the defendant’s security interest in the debtor’s assets, including its inventory, has priority over the plaintiff’s reclamation rights. The plaintiff sold goods to the debtor up to the petition date and sought either return of the goods delivered within the reclamation period or recovery of the proceeds from the sale of such goods. Pursuant to 11 U.S.C. § 546(c), the Court finds the reclamation rights are subordinate and the complaint should be dismissed. Opinion below.
(Bankr. E.D. Ky. Nov. 22, 2017)