On February 27, 2018, the Supreme Court issued a significant decision that will increase the exposure of debt and equity investors that receive payments from all kinds of highly leveraged transactions, including leveraged buy-outs and dividend recapitalizations. The unanimous opinion in Merit Management Group, LP v.
Summary: Welcome to the fourth edition of our monthly Myanmar update in 2018. We have distilled the top news items into this summary 'speed read'.
Public Consultations on the Myanmar Insolvency Bill
This article was first published in the Australian Financial Review on Thursday, 22 February.
In the five years to November 2017, AUD1.8 billion of GST revenue was written-off due to phoenixing – where companies are stripped of assets and liquidated, then restarted under a different name leaving creditors out of pocket.
The recent judgment in Phones 4U Ltd (in administration) v EE Ltd [2018] EWHC 49 (Comm) has highlighted the need for care when communicating the reasons for terminating a contract. In this case EE, as a result of failing to identify a repudiatory breach as the grounds for terminating its trading agreement with Phone 4U, was precluded from later pursuing a common law claim for damages.
Background
The Ninth Circuit recently limited the availability of diversity jurisdiction for certain cases with claims involving mortgage loan modifications. Specifically, in Corral v. Select Portfolio Servicing, Inc., the Ninth Circuit held that, where the plaintiff-borrower “seeks only a temporary stay of foreclosure pending review of a loan modification application … the value of the property or amount of indebtedness are not the amounts in controversy.” — F.3d —-, 2017 WL 6601872, at *1 (9th Cir. Dec. 27, 2017).
Summary: This Expert Insight looks at the case of Ziggurat (Claremont Place) v HCC International Insurance Company PLC [2017] and considers the implications of the case for the surety industry generally, particularly in the context of construction insolvency.
In, In re: Geneius Biotechnology, Inc., C.A. No. 2017-0297-TMR (Del. Ch. Dec. 8, 2017), the Delaware Court of Chancery denied a minority stockholder’s petition for the appointment of a neutral third-party receiver under Section 291 of the Delaware General Corporation Law (“DGCL”) because the petitioner minority stockholder failed to prove, by clear and convincing evidence, that Geneius Biotechnology, Inc. (“Geneius”) was insolvent. The court held that Section 291 actions are not to be used as a method of resolving business strategy disputes between stockholders and management.
The Safe Harbour reforms that became law on 19 September 2017 aim to create a better environment for the effective corporate rescue of distressed companies.
Insurance claims represent assets in insolvency which may be capable of realisation or assignment by an insolvency practitioner (IP). If properly managed, such claims can prove to be a significant source of recovery. However, in practice, the benefits of insurance are often lost for a variety of reasons, including:
This article was first published by INSOL International in December 2017.