On March 12, 2023 the New York State Department of Financial Services appointed the FDIC as receiver for Signature Bank. The FDIC created a bridge bank, Signature Bridge Bank (“Bridge Bank”), and transferred all deposits and substantially all of Signature Bank’s assets to the Bridge Bank. No consents or other restrictions on transferring rights and obligations of Signature Bank are applicable for the transfer to the Bridge Bank. The receivership is governed by the Federal Deposit Insurance Act (“FDIA”). Under the FDIA, the FDIC succeeds to the rights and powers of Signature Bank.
Sam Bankman-Fried is scheduled to be tried on eight charges starting on 3 October 2023, and US District Judge Lewis Kaplan has allowed for a second trial on 11 March 2024 on a further five charges that include bribing Chinese officials and committing financial fraud. The charges centre around the alleged fraud and conspiracy to defraud crypto investors and customers in FTX and Alameda Research.
Bankruptcy trustees and chapter 11 debtors-in-possession ("DIPs") frequently seek to avoid fraudulent transfers and obligations under section 544(b) of the Bankruptcy Code and state fraudulent transfer or other applicable nonbankruptcy laws because the statutory "look-back" period for avoidance under many nonbankruptcy laws exceeds the two-year period governing avoidance actions under section 548.
On August 24, 2023, the U.S. Court of Appeals for the Second Circuit held in Kirschner v. JP Morgan Chase Bank, N.A. et al. that certain syndicated term loans2 at the center of a transaction involving JP Morgan Chase and other banks were not securities under state law. While the Second Circuit did not foreclose the possibility that syndicated term loans could be securities under different circumstances,3 for now Kirschner cements the long-standing view -- following Banco Espanol de Credito v.
The European Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114 – MiCA), which entered into force on 29 June 2023, is a significant new regulation that will impact the treatment of cryptocurrencies and digital assets. MiCA requires the European Securities and Markets Authority (ESMA) to develop a series of regulatory technical standards (RTS) and implement technical standards (ITS) and Guidelines. Many of these regulations are to be developed in close cooperation with the European Banking Association (EBA).
Every passing month seems to bring with it a new set of “market making” events that consistently catapults the deal and debt financing economy in a new direction. Nonetheless, there are certain trends that the JMBM attorneys on the “financing frontlines” see repeatedly, and this fall seemed as good a time as any to convey them. By sharing these points, we hope to better prepare our friends, colleagues and clients for navigating through the current debt and restructuring markets, in preparation for the months and quarters that lie ahead.
Interest rates remain high, and for many markets and asset classes, prices have yet to fall. However, there’s at least one way real estate investors can buy a property at the right price in this cycle: Distressed sales.
“It’s a main mechanism for price correction,” said Matthew Scoville, a New York-based attorney and partner at Hunton Andrews Kurth who has represented both lenders and real estate developers. In many cases, distressed sales allow investors to acquire properties that would otherwise not be available. “Opportunities are the name of the game,” he said.
In recent years much ink has been spilled opining on the so called 'Quincecare' duty of care, and the limits of it (see links to our recent insolvency law updates covering the topic below). The judgment in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 was a first instance decision on Steyn J, in which he found that a bank has a duty not to execute a payment instruction given by an agent of its customer without making inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.
Volatile credit markets and guarded banks have made securing term loan C (TLC) debt attractive for borrowers who heavily rely on letters of credit to trade but either have low credit ratings or otherwise have difficulty accessing large enough revolving facilities to support the high amount of letters of credit needed.