The interest rate mis-selling scandal took another twist recently when a landmark legal case was dismissed by the High Court. Had the case been successful it would have challenged the banks’ £2.1bn compensation scheme set-up to settle inappropriate interest rate swaps – however the decision only brings temporary relief for the banks.
Background
Under the Bankruptcy Code, a reorganization plan may be approved if (1) proposed in “good faith” under § 1129(a)(3), and (2) accepted by at least one class of creditors whose interests are impaired by the plan, see 11 U.S.C. § 1129(a)(10). In Village Green I, GP v. Fed.
When can a bank be at risk of unknowingly receiving a fraudulent transfer? How much information does a bank need to have before it is on “inquiry notice”? A recent decision from the Seventh Circuit Court of Appeals highlights the risks that a bank takes when it ignores red flags and fails to investigate. This decision should be required reading for all lenders since, in the matter before the Seventh Circuit, the banks’ failure to investigate their borrower’s questionable activity caused the banks to lose their security and have their secured loans reduced to unsecured claims.
Hypo Group Alpe Adria AG, an Austrian banking group, was nationalized by the Austrian government in 2009 in order to avert a bank collapse. The Austrian province of Carinthia owned the bank until 2007 and the guarantees given by Carinthia for the bank’s debt still amount to several times its annual budget, which has made the winding-down process more complicated because sharing the losses with bondholders would lead to significant claims against Carinthia.
When can a bank be at risk of unknowingly receiving a fraudulent transfer? How much information does a bank need to have before it is on “inquiry notice”? A recent decision from the Seventh Circuit Court of Appeals highlights the risks that a bank takes when it ignores red flags and fails to investigate.
In re Sentinel Management Group – The Decision
Owners of small business entities are frequently required to guaranty the debts of such entities. Those business entities might later file for Chapter 11, and may be able to achieve confirmation of a plan to restructure their indebtedness. The question then presented is whether this confirmation event affects the separate guaranty obligations of the owners? The Tenth Circuit Court of Appeals recently explored this issue in In re: Larry
On 1 April 2015, responsibility for consumer credit in the UK transferred from the Office of Fair Trading (“OFT”) to the Financial Conduct Authority (“FCA”). A consequence of this was to replace the OFT’s Consumer Credit Act licencing scheme with the FCA’s authorisation scheme under the Financial Services and Markets Act 2000 (“FSMA”).
Poland’s Parliament has enacted a new law creating a Borrowers’ Support Fund to help homeowners with mortgages that are underwater. Official statistics by mortgage amount show that 24.3% of mortgages, totaling PLN 84.1 billion (approx. USD 22.7 billion) exceed the value of the borrowers’ homes, affecting 236,400 borrowers.
The Austrian “Bundesgesetz über Sanierungsmaßnahmen für die HYPO ALPE-ADRIA-BANK INTERNATIONAL AG” (HaaSanG), published on 31 July 2014 in the Austrian Federal Law Gazette and implemented in August 2014 by the Austrian government, paved the way for the establishment of Heta Asset Resolution AG (Heta) as a wind-down vehicle to assume and manage large parts of the assets of the failed Austrian bank, Hypo Alpe-Adria Bank international AG (HAA).
On August 4, 2015, we posted: “Equitable Mootness In The Third Circuit: Dead Or Alive?”, which analyzed the Third Circuit’s opinion in In re One2One Communications. The post predicted that Judge Krause’s concurrence would likely result in further opinions on equitable mootness. Less than a month later we have such an opinion. InAurelius v. Tribune, 14-3332 (3d Cir.