The opinion is Bruce v. Citigroup Inc., Case No. 22-1000, decided August 2, 2023, by the U.S. Second Circuit Court of Appeals.

The opinion addresses this question:

The Bankruptcy Protector

This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period April - June 2021.

CONTEMPT OF COURT

“Survey and test prospective action before undertaking it. Before you proceed, step back and look at the big picture, lest you act rashly on raw impulse”

- Epictetus

“Your hindsight on this case, was far more accurate than his foresight”

- David Carpenter

INTRODUCTION

Introduction

In Allenger, Shiona (Trustee-in-bankruptcy of the Estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another [2020] SGHC 279, Rajah and Tann Singapore's Fraud, Asset Recovery and Investigations team led by partners Danny Ong and Yam Wern-Jhien, assisted by Bethel Chan and Chen Lixin, prevailed in a significant decision examining principles governing the grant of freezing injunctions against foreign defendants in the context of a cross-border insolvency and asset recovery claim.

This case was heard before CIGA came into force but the provisions of the CIG Bill were known. Statutory demands were served on 27 March 2020 on the company in respect of debts due under loan agreements and a winding up petition had been presented. The company applied for an injunction to restrain the advertisement of the petition, claiming that although it was insolvent it had been prevented from obtaining funding, to enable it to propose a scheme of arrangement to its unsecured creditors, as a result of the pandemic.

Defendants in a lawsuit didn’t waive their right to arbitrate even after moving to dismiss and answering a complaint, a court held last week. Arbitration wasn’t waived because the defendants hadn’t filed affirmative defenses or counterclaims and had taken no discovery. Trevino v. Select Portfolio Servicing, Inc. (In re Jose Sr. Trevino), Adv. Pro. No. 16-7024, 2018 Bankr. LEXIS 3605 (Bankr. S.D. Tex. Nov. 14, 2018).

The U.S. Court of Appeals for the Eleventh Circuit held that 12 U.S.C. § 1715z-20(j) did not alter or limit the lender’s right to foreclose under the terms of the valid reverse mortgage contract where the non-borrower spouse was still living in the home.

Accordingly, the Eleventh Circuit affirmed the trial court’s dismissal of the plaintiff’s petition for injunctive relief to prevent the foreclosure sale.

Summary: A recent Third Circuit decision has clarified the scope of the third-party injunction, including injunctions in favor of insurers that resolve insurance coverage in asbestos bankruptcy cases, that may be issued under Section 524(g) of the Bankruptcy Code. Liability covered by such an injunction must be “derivative” of the debtor, meaning that under state law, the third party’s liability must depend on the debtor’s liability.

When disputes between shareholders escalate, one of the shareholders may be tempted to transfer the business to a new entity. Can the shareholder be stopped if he succeeds in obtaining a majority vote?

THE FACTS: