The U.S. Supreme Court has held that the filing of a proof of claim in bankruptcy proceedings with respect to time-barred debt is not a “false, deceptive, misleading, unfair, or unconscionable” act within the meaning of the Fair Debt Collection Practices Act (“FDCPA”) when there continues to be a right to repayment after the expiration of the limitations period under applicable state law. The Court’s decision in Midland Funding, LLC v.
The U.S. Supreme Court has held that the filing of a proof of claim in bankruptcy proceedings with respect to time-barred debt is not a “false, deceptive, misleading, unfair, or unconscionable” act within the meaning of the Fair Debt Collection Practices Act (“FDCPA”) when there continues to be a right to repayment after the expiration of the limitations period under applicable state law. The Court’s decision in Midland Funding, LLC v.
On May 1, 2017, the U.S. Supreme Court announced that it would review the Seventh Circuit’s decision in FTI Consulting, Inc. v. Merit Management Group, LP, 830 F.3d 690 (7th Cir. 2016) (“Merit”), which addressed the scope of the safe harbor found in Section 546(e) of the Bankruptcy Code for settlement payments.
On a motion to “’confirm the trial schedule,’” Vice Chancellor Glasscock determined that actions brought by the limited partners of a partnership based upon the general partner’s alleged fraud, self interest and breach of the partnership agreement were direct claims and therefore not subject to a stay pursuant to the partnership’s bankruptcy proceeding. Sehoy Energy LP et al. v. Haven Real Estate Group, LLC et al., C.A. No. 12387-VCG (Del. Ch.
The regime for dealing with insolvency proceedings within the European Union (EU) is about to become more coordinated. The timing is ironic given that the change will take place in the period leading up to the March 2019 exit of the United Kingdom from the EU.
In Steven B. Trusa v. Norman Nepo, et al., Civil Action No. 12071-VCMR, the Delaware Court of Chancery granted defendants’ motion to dismiss, holding that the creditor plaintiff lacked standing to pursue a claim for breach of fiduciary duty and a claim for dissolution of the company, that he failed to state a claim for the remaining assertions, and that the declaratory judgment claim was duplicative.
New Law to Encourage Informal Restructuring
On 28 March 2017, the Federal Government released its long awaited draft legislation that is designed to encourage restructuring of distressed businesses.
The proposed legislation is open for consultation with the finalised legislation expected to come into effect on 1 January 2018. There are two proposed changes:
Australia Restructuring and InsolvencyAlert
On 28 March 2017, the Federal Government released its long awaited draft legislation for reforms to insolvency laws in Australia. The changes focus on providing a safe harbour for directors of distressed companies and a stay on the enforcement of ipso facto clauses in contracts.
On 23 March 2017, Justice Robson of the Supreme Court of Victoria declined to follow the Victorian Court of Appeal decision of Re Enhill, finding that the decision was not binding with respect to different legislation (the Companies Act 1961 (Vic) as opposed to theCorporations Act 2001 (Cth)).
Background
Since the early 1980s, there has been a divergence of judicial opinion in the decisions of Re EnhillPty Ltd [1983] 1 VR 561 and Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99.
On 17 March, in Hambleton v Finn [2017] QDC 61, McGill SC DCJ of the District Court of Queensland applied the section 553C(1) setoff under the Corporations Act 2001 to a liquidator’s insolvent trading claim against a director.
His Honour followed the earlier decision of the District Court of Queensland in Morton v Rexel Electrical Supplies Pty Ltd. In that case, the set-off provision was applied where the liquidator was seeking the recovery of unfair preference payments.