The Supreme Court in London today gave judgment in the Waterfall I appeal, a dispute as to the distribution of the estimated £8 billion surplus of assets in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).
LBIE entered administration on 15 September 2008 and has now paid its unsecured creditors dividends of 100p in the £. The Waterfall I Supreme Court appeal addressed some of the key issues as to who should receive the surplus, which we discuss below.
“So-called” Currency Conversion Claims
The Supreme Court's decision in Lehman Waterfall I was handed down this morning. DLA Piper represents one of the successful appellants, Lehman Brothers Limited (in administration) (LBL).
The court was asked to consider certain issues relating to distributions in the estate of Lehman Brothers International (Europe) (LBIE), an unlimited company in administration. Such issues arose due to a substantial anticipated surplus in LBIE and sought to resolve particular lacunas in UK insolvency legislation.
There are changes to the Act mainly designed to bring in the required changes following the abolition of physical meetings in the first instance.
Approval is now by a creditors decision making procedure namely -
- Correspondence;
- Electronic Voting; or
- Virtual Meeting.
Contents of the Proposal
Any proposal must comply with the general principles set out in rule 8.2I IR2016 -
The recent case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) (Singularis) is an important decision affecting any institution that handles client payments, including banks. It decided that a stock broker was liable in negligence for having breached its duty of care to its customer, Singularis Holdings Ltd (in liquidation) (Singularis), by paying monies out of its client account on the instruction of one of Singularis' directors and its only shareholder, Mr Al Sanea.
Background
The Facts
The applicants, who had successfully appealed the rejection of their proof of debt by the liquidator of Burnden Group Limited, sought an order that the liquidator pay their costs of the appeal personally in circumstances where the relevant company had no assets and their costs exceeded £290,000 (including VAT).
The Decision
When you are focused on the day-to-day running of a business, it can be all too easy to miss the warning signs that you may be at risk of insolvency. Often, the signs might be interpreted as a “blip” or a “minor issue” paired with the assumption that the company can trade out of it. In this article, Stephen Young identifies some of the key warning signs that directors should be aware of.
The Court of Appeal in Harvey v Dunbar Assets plc [2017] EWCA Civ 60 has confirmed that parties cannot re-litigate failed arguments that have previously been presented in bankruptcy proceedings.
This will be welcome news for creditors in situations where debtors rehearse the same arguments at several stages of the bankruptcy process in an attempt to deter enforcement by driving up legal costs and drawing out proceedings.
The facts
Disclaimer - Rules 19.1 - 19.11
The Rules relating to Disclaimer remain largely unchanged, except for bankruptcy and liquidation being included in the same section and some minor updates to the Act. The deadlines for all actions remain unchanged.
19.8 - Application for permission to disclaim in bankruptcy (section 315(4))
The notes in this section refer to changes within the Act as amended by the Deregulation Act 2015 and the Enterprise and Regulatory Reform Act 2013.
Schedule 5 of the new rules provides some clarifications on the calculation of time periods:
1. Days - CPR 2.8(1) applies meaning that a period of time expressed as a number of days means clear days, meaning you do not count the day on which the period begins, and the if the end of the period is defined by reference to an event, the day on which that event occurs.
On 6 April 2017, together with the new Insolvency Rules (England and Wales) 2016, the Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017 (the “Regulations”) will come into force.
These regulations follow an independent review of the special administration regime, undertaken by Peter Bloxham during 2013, assessing the success of the special administration regime and making recommendations of possible changes that may improve the operation and robustness of the regime.