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An important part of last year's package of amendments to the Corporations Act 2001 (Cth) were the ipso facto reforms which will stay the exercise of certain contractual rights relating to a counterparty's insolvency or financial position. What, if any, contracts would be exempt from the stay has been a major question, not least for the construction industry.

This has now been answered, with the release of exposure drafts for public comment by May 11 2018 of the:

A recent NSW Supreme Court decision has decided that an insolvent contractor can claim under Security of Payment legislation, rejecting Victorian Court of Appeal precedent as "plainly wrong". It might have significant ramifications for participants in the building and construction industry across Australia.

In Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412, the NSW Supreme Court considered the extent to which Security of Payment (SOP) legislation can be relied upon by an insolvent contractor.

The District of Columbia Court of Appeals recently reversed a lower court’s decision granting summary judgment to a condominium association and held that the association’s foreclosure of a “super-priority” condominium lien may not have extinguished an otherwise first-priority mortgage on the property. SeeU.S. Bank Nat’l Ass’n v. Green Parks, LLC, No. 16-cv-842 (D.C. Mar. 13, 2018). In the case, the borrower obtained a loan to purchase a condominium.

Stakeholders have until 11 May 2018 to comment on a key part of the new ipso facto regime – the exceptions to the statutory stay on ipso facto clauses in certain categories of contracts and rights.

The new insolvency legislation commencing 1 July 2018 (Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017) introduces a statutory stay on the exercise of contractual rights arising by reason of certain insolvency trigger events.

The California Court of Appeals recently held that a mortgage (the “Mortgage”) recorded simultaneously with a home equity line of credit (the “HELOC”) had priority and was not entitled to any surplus proceedings from the foreclosure of the HELOC, despite the fact that the HELOC’s instrument number was prior to that of the Mortgage. SeeMTC Fin., Inc. v. Nationstar Mortg., 19 Cal. App. 5th 811 (Ct. App. 2018).

New Jersey’s Appellate Division recently reversed a lower court and held that a lender erred by not serving a notice of intent to foreclose (“NOI”) before commencing a foreclosure action on a residential reverse mortgage. SeeNationstar Mortg., LLC d/b/a Champion Mortg. Co. v. Armstrong, 2018 WL 1386247 (N.J. Super. Ct. App. Div. March 20, 2018). In the case, defendant, as his mother’s attorney-in-fact, obtained a reverse mortgage on her home. The mother died shortly thereafter and, pursuant to 24 C.F.R.

The Nevada Supreme Court recently affirmed a lower court’s decision that a foreclosure under a Nevada statute giving “super priority” to homeowners’ association liens was preempted by the Housing and Economic Recovery Act of 2008 (“HERA”) in a foreclosure in which the Federal National Mortgage Association (“Fannie Mae”) held a mortgage. SeeSatico Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Assoc., 2018 WL 1448731 (Nev. Mar. 21, 2018). In 2004, the borrowers purchased a property with a home loan that was secured by a deed of trust on the property.

In handing over any documents in litigation or Court process, you must assess whether or not the documents have tax relevance.

The Court will closely examine the relevant transactions involving the accounts and form a view – which may be an impressionistic one – as to the likely extent of the interest of each client (or each client group) in those accounts.