Under the 1992 ISDA Master Agreement, following an event of default, there is either an automatic termination or the non-defaulting party can serve a notice designating an Early Termination Date. There then has to be a determination by the non-defaulting party of the compensation that is owed by one party or the other. This is done by closing out the transactions, which involves determining gains or losses in replacing or providing the economic equivalent of the terminated transactions. Once that is done, a statement is served setting out the calculations.
Welcome to this month's edition of our commercial and tech update, covering a wide range of topics from Facebook's lacklustre approach in dealing with IP infringement to further confirmation on the Courts' approach to liquidated damages.
(Mis)Adventures in advertising
In its recent decision in LBI EHF v Raiffeisen Bank International AG [2018] EWCA Civ 719, the Court of Appeal confirmed the wide discretion enjoyed by a non-defaulting party under the default valuation provisions in the Global Master Repurchase Agreement (2000 edition) (“GMRA”) when it comes to determining the “fair market value” of securities.
In particular, when assessing “fair market value”, the non-defaulting party is entitled to have regard to any distressed or illiquid market conditions that were being experienced at the relevant time.
Welcome to the inaugural edition of 'Going concerns', in which we strive to bring you the latest updates on restructuring and insolvency law. For this issue, we focus on Singapore and provide:
The High Court has held that a bank owed a duty of care to its customer when on notice that an agent acting for the customer was misusing his authority. In the case of Singularis Holdings Limited (in Official Liquidation) v Daiwa Capital Markets Europe Limited [2017] EWHC 257 (Ch), a bank was liable in negligence to its customer since it was on notice that its customer was at risk of being defrauded by its director but failed to stop payments made for the purpose of misappropriating funds of the company.
The Facts
Conflict liquidators have been appointed by the High Court to a group of companies to investigate claims by the director that the companies’ bank had artificially distressed the companies and driven them into administration.
Background
The Angel Group of companies was founded by Ms Julia Davey. They owned residential and commercial properties which were rented out. The companies borrowed substantial amounts from Lloyds HBOS. After getting into financial difficulties, the bank appointed administrators from KPMG over them.
The administrators of collapsed forex currency broker Alpari (UK) have announced that the creditors’ meeting will be held on 12 March. See the link below for further details.
The government has indicated that it will raise the financial threshold for creditors petitioning for an individual's bankruptcy through an amendment to the Insolvency Act 1986. From 1 October 2015 a creditor will need to be owed at least £5,000, rather than £750 as at present. This change, coming very shortly after the recent abolition of the remedy of distress, will inevitably serve to further limit landlords' armouries when attempting to recover arrears from tenants.
Re Christophorus 3 Limited [2014] EWHC 1162 (Ch)
An investigation is to be carried out into the causes of the bankruptcy of OW Bunker (“OWB”), the largest ship fuel supplier in the world. Investigators from two Danish law firms and Ernst & Young will try to establish the reasons for the failure of OWB less than a year after it was listed at a value of $1 billion. OWB has blamed its failure on hedging losses of $150 million, attributable to the falling price of oil and on a credit line estimated at between $120 and $130 million given by OWB’s subsidiary in Singapore, Dynamic Oil Trading (“DOT