The Board of Governors of the U.S. Federal Reserve System (Board) recently proposed a rule (Proposed Rule) that will impact parties to any "qualified financial contract" (QFC), as described below, with a global systemically important banking organization (GSIB) or a GSIB affiliate (together, a covered entity). The Proposed Rule will eliminate certain contractual rights with respect to the QFC when:

the covered entity counterparty is placed in a Federal Deposit Insurance Corporation (FDIC) receivership; or

What happens when a debtor, whose loan is pooled and securitized, files for bankruptcy? Are payments made to investors recoverable as fraudulent transfers or preferences?

The Court of Appeals for the Seventh Circuit, in Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC,¹ recently issued a decision that holds—contrary to the only other court of appeals that has addressed the issue—that rejection of a trademark licensing agreement by a debtor-licensor does not terminate the agreement and that a trademark licensee can thus continue using the license after rejection.

The Fourth Circuit’s Lubrizol Decision

On 16 December 2010, HM Treasury published a revised draft of the Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (SI 2010/2993) (the “Amending Regulations”).  

Creditors seeking to enforce an undisputed debt against a solvent foreign non-Hong Kong company in the courts of Hong Kong will welcome the recent judgment of the Court of Final Appeal (CFA) in Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11, as the CFA helpfully backs a broader and more commercially holistic interpretation of a key tenet relating to how Hong Kong courts approach certain threshold assessments involving winding up petitions brought by creditors in Hong Kong against foreign incorporated companies.

In a recent decision, the Bankruptcy Court for the Southern District of New York held that a purported debt held by an entity with a near-majority membership interest in the Debtor was actually equity disguised as a loan.

Background

On 2 June 2020, Mr Justice Morgan handed down his judgment in the case of Re: A Company [2020] EWHC 1406 (Ch) in which a High Street retailer (whose identity is not disclosed) applied to restrain the presentation of a winding-up petition based on the provisions of the yet-to-be-enacted Corporate Insolvency and Governance Bill 2020 (the “Bill”).

Introduction

The recent decision of the London Commercial Court in PJSC Tatneft v Gennady Bogolyubov & Ors [2018] EWHC 1314 (Comm) highlights the importance that the Court will attach to full asset disclosure by a respondent to ensure the effectiveness of a freezing order, even in circumstances where the value of a respondent’s assets exceeds the sum frozen by the order.

Freezing Orders: What Are They?

Section 5 of the Securities Act of 1933 prohibits the sale of a security unless a registration statement is in effect. This prohibition on the sale of unregistered securities does not apply to exempt transactions. One such exemption is found in the Bankruptcy Code — section 1145 provides that securities issued under a plan of reorganization may be exempt from the registration requirements of the Securities Act. For debtors, the recent decision of Golden v. Mentor Capital, Inc., 2017 U.S. Dist. LEXIS 153415 (D. Ut. Sept.