De Nederlandsche Bank (DNB) began the process of appointing receivers Monday for DSB Bank NA (DSB) after DSB experienced a “run” when rumors of its insolvency spread via Twitter and other outlets.
Earlier today, DSB Bank N.V. (DSB) was declared bankrupt and ordered to liquidate, ending hopes the regional lender, which last week suffered a run on deposits and was subsequently put into receivership, might be sold or bailed out.
DSB Bank (DSB), a small Dutch lender, has been declared bankrupt on 19 October 2009. Other Dutch banks will now have to guarantee DSB's deposits. The Dutch central bank said on 19 October 2009 that it had activated the national deposit guarantee system to deal with the bankruptcy, and that it expects eligible depositors to be reimbursed by Christmas. The banks will have to pay into the guarantee system in proportion to their market share.
Christchurch based company Cryptopia Limited (in liquidation) (Cryptopia) operated a cryptocurrency exchange. Account holders were able to deposit cryptocurrencies into the exchange, and carry out trades with each other.
In January 2019 the exchange was hacked and cryptocurrencies valued at approximately NZD30m were stolen. Cryptopia closed after the hack, re-opened for a short period, and was then placed into insolvent liquidation in May 2019. David Ruscoe and Russell Moore of Grant Thornton New Zealand were appointed liquidators.
Introduction
Following our Initial Note, the receivers of Ebert Construction Ltd (Ebert) released their first report on 1 October 2018. Then, on 3 October 2018, Ebert put itself into liquidation, with the liquidators subsequently issuing their first report on 10 October 2018. These developments have provided further information about Ebert’s financial position and the insolvency process.
On May 24, 2019, New Zealand-based online asset exchange, Cryptopia Limited, filed a petition under Chapter 15 of the United States Bankruptcy Code seeking recognition of its New Zealand liquidation proceeding in the United States. On the same day, the United States Bankruptcy Court for the Southern District of New York granted provisional relief to Cryptopia, including extending the benefits of the automatic stay to prevent creditors or other parties in interest from taking actions to interfere with Cryptopia’s assets.
In Robt. Jones Holdings Limited v McCullagh [2019] NZSC 86 the Supreme Court confirmed that the requirements outlined in s 294 Companies Act 1993 (“Act“”) are all that is required in order to void an insolvent transaction. In particular, the Supreme Court confirmed there is no additional common law principle that the transaction must have diminished the net pool of assets available to creditors.
Background
In Body Corporate 341188 v Kelly, a judgment debtor sought to overturn an Associate Judge's decision not to set aside a bankruptcy notice. The notice was in respect of a District Court judgment and a costs order obtained by the Body Corporate in a separate High Court proceeding. The debtor argued (among other grounds) that the notice was invalid because it was in respect of two judgment debts rather than one.
Three recent decisions clarify issues around personal bankruptcy proceedings.
These include:
compromise proposals
procedures for substitution of creditors, and
vesting of property disclaimed by the Official Assignee.
Debtors' compromises in bankruptcy proceedings
A bankruptcy notice under the Insolvency Act requires the debtor to pay the debt or compromise the amount owing on terms that satisfy the Court or the creditor.
Mr Maharaj owned a building company. Ms Nandani, his wife, owns a residential property. Mr Maharaj needed funding, which he could not obtain. However, the necessary funds were loaned to Ms Nandani and secured over her property. Ms Nandani subsequently contended that: