Constitution and perfection of collateral arrangements
Insolvency aspects of collateral arrangements
Beneficiary of collateral
Remedy for potential conflict with depository
Rights attached to the collateral
Since the entry into force of the Financial Collateral Act of 15 December 2004 (the "Collateral Act") implementing Directive 2002/47/EC on financial collateral arrangements as regards linked systems and credit claims (the "Collateral Directive"), financial collateral arrangements have benefitted from increased flexibility and legal certainty in Belgium.
On 16 September 2011 the Netherlands Supreme Court rendered an important judgment regarding the exercise by a bank of its right to reverse a direct debit (LJN BQ873 SNS Bank/Pasman q.q.). In light of this judgment it can be concluded that, in principle, a bank may exercise its right of reversal not only if the direct debit caused the account to be overdrawn or (if an overdraft facility has been granted) the limit to be exceeded, but also if the bank will, as a result of the debtor/payer's bankruptcy, be unable to recover the claim resulting from the direct debit.
1. Introduction
This newsletter discusses the draft legislative proposal for a Financial Institutions (Special Measures) Act (Wet bijzondere maatregelen financiële ondernemingen; "Intervention Act") that was recently published for consultation along with a draft explanatory memorandum and a document containing specific questions. The draft proposal would broaden the powers of the Dutch Central Bank (De Nederlandsche Bank; "DNB") and the Minister of Finance to intervene at financial institutions that are experiencing "serious problems".
Introduction
The restructuring practice often calls for creative solutions, especially when the stakes are high and the debtor is in serious financial distress. Many restructuring lawyers have at times faced the question of whether it is possible for a debtor to transfer assets to a creditor subject to the condition precedent of the debtor being declared bankrupt.
On March 8 2010 the Amsterdam District Court dismissed an application by the administrators of the Dutch branch of Landsbanki hf to extend the term of the emergency regulations that had been declared applicable to the Dutch branch by the court on October 13 2008.(1) As a result, the regulations ceased to apply on March 13 2010.
Facts
Under Delaware law, do creditors of an insolvent limited liability company have the same standing as creditors of insolvent corporations to pursue derivative claims against directors on behalf of the LLC? Most commentators, and some courts, have assumed that the answer was “yes.” However, the Delaware Court of Chancery in CML V LLC v. Bax, No. 5373-VCL, 2010 WL 4517795 (Del. Ch. Nov. 3, 2010), determined that the plain language of the Delaware Limited Liability Company Act (the LLC Act) denies derivative standing to such creditors.
Section 330 of the Bankruptcy Code provides a statutory framework for compensation of professionals who are paid from the bankruptcy estate. Compensation awarded under section 330 is afforded administrative expense status under section 503(b)(2) and given second priority in the distribution of an estate pursuant to section 507(a)(2) of the Bankruptcy Code.