The liquidators of Lehman Brothers Australia are appealing a landmark Federal Court decision that found it liable for losses suffered by a number of local councils and charity groups.
On 19 April 2013, the Federal Court of Australia handed down its judgment in Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356. The Court enforced a foreign award against a company in liquidation, in the latest evidence of Australia’s pro-arbitration environment.
Background
Over the last several years, the number of Chapter 15 filings has continued to grow. One of the most prominent of these bankruptcy filings is the Vitro S.A.B. de C.V. case. When last we reported on theVitro case, the Texas bankruptcy court administering the Chapter 15 case had denied recognition to the Mexican restructuring plan of Vitro because the plan provided third party releases to non-debtors. See Vitro, S.A.B.: Bankruptcy Court Refuses to Recognize Mexican Concurso That Releases Claims Against Non-Debtors” (November 2012).
Last Fall, the United States Court of Appeals for the Second Circuit issued a decision in the Charter Communications bankruptcy case which will create additional significant challenges for those seeking to appeal confirmation of plans of reorganization that have been implemented. See 691 F.3d 476. Upon implementation (or “substantial consummation”) of the plan, the Second Circuit presumes that the appeal of such plan is equitably moot. Appellants bear the burden of overcoming that presumption.
When does the selection of a technically correct venue become “unjust”? This was the core question Judge Shelley Chapman was required to grapple with when Patriot Coal and almost 100 of its affiliates filed for bankruptcy in New York this past summer. Should it matter that Patriot Coal created the New York subsidiaries, that permitted a New York court filing, about a month prior to the actual bankruptcy filing?
In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 686 F.3d 372, the United States Court of Appeals for the Seventh Circuit held that a debtor-licensor’s rejection of an executory trademark license does not terminate the licensee’s right to use the trademark. The decision creates a circuit-level split that may invite Supreme Court review. However, no final resolution is likely soon. The Supreme Court declined to hear the case, denying a petition for a writ of certiorari in December of 2012.
In the current economic climate, contactor insolvency is an increasing concern for all participants in the construction industry.
The issue is currently receiving close attention from the NSW Government who commissioned an independent report following a spate of contractor insolvency events in 2012 (including Reed Constructions Australia Pty Ltd, St Hilliers Construction Pty Ltd, Southern Cross Constructions (NSW) Pty Ltd and Hastie Group Limited).
Foreign companies are frequently used to hold assets or other investments in Hong Kong. Some of these foreign companies are not registered under Part XI of the Companies Ordinance (“CO”) (“Unregistered Companies”). There are various reasons for not registering foreign companies in Hong Kong, including confidentiality and tax benefits. However, there may be some drawbacks to this approach.
Chapter 15 of the Bankruptcy Code provides a procedure to obtain recognition of a foreign bankruptcy, insolvency or debt adjustment proceeding (a “foreign proceeding”) in the United States. Chapter 15 draws a distinction between a “foreign main proceeding” (i.e., a foreign proceeding pending in a country where the debtor has the center of its main interests) and a “foreign nonmain proceeding” (i.e., a foreign proceeding pending where the debtor has “an establishment”).
Section 546(e) of the Bankruptcy Code is a “safe harbor” provision which restricts a debtor’s ability to recover or “clawback” what would otherwise be “avoidable” payments made to creditors. In the recent case of Lightfoot v. MXEnergy Elec., Inc., 690 F.3d 352 (5th Cir. 2012), the Fifth U.S.