Fomento De Construcciones Y Contratas SA v Black Diamond Offshore Ltd (Court of Appeal hearing)

The Court of Appeal has rejected an appeal brought by a leading Spanish company ("FCC") against a first instance decision that an event of default had occurred in respect of a debt instrument.

Background

Introduction

A director who breaches the obligations and duties imposed on him by his office may be liable to compensate the company for breach of duty, may incur personal liability for the company’s debts, may also face criminal or civil penalties and may be disqualified from acting as a director. The position of the company director has never been the subject of more scrutiny than it is today.

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Uncrystallised pension pot remains protected following bankruptcy

A winding up order can be used by creditors to enforce payment of a debt by a delinquent company. Often as an act of last resort, creditors petition the court to have the business liquidated, usually after several failed attempts to recover their money.

The expense of going through the courts to obtain an order of this type indicates their determination, and this is a method often used by large secured creditors such as HMRC and the banks.

WATERFALL IIC JUDGMENT (ISDA MASTER AGREEMENT ISSUES)1

A divided panel of the Third Circuit Court of Appeals affirmed the district court's ruling in In re: Philadelphia Newspapers, et. al. (3d. Cir., Case No. 09-4266) and held that secured creditors do not have a statutory right to credit bid their debt at a sale conducted under a plan of reorganization pursuant to which the debtor elects to provide the secured creditors with the "indubitable equivalent" of their secured claim.

Credit bidding of debt held by a secured creditor at a sale of collateral under section 363 of the Bankruptcy Code has become commonplace.1 Does a secured creditor have that same ability in a sale under a chapter 11 plan? Most thought so, but according to the Third Circuit Court of Appeals, not always.

On March 22, the United States Court of Appeals for the Third Circuit issued a decision that could significantly impact the rights of secured creditors to credit bid in connection with Chapter 11 asset sales under a plan of reorganization.

Introduction