EU requirement for national insolvency registers to be established in all Member States (Recast Insolvency Regulation 2015 ((EU) 2015/848))
Will Nevin Partner T +44 20 7466 2199 [email protected]
UK TIMELINE
Kevin Pullen Partner T +44 20 7466 2976 [email protected]
2017Q4 (Oct-Dec)
2017 will see major changes to the UK legal landscape, with Article 50 of the Treaty on European Union expected to be triggered by the end of March 2017 to begin the Brexit process. The legal implications of Brexit will be hugely significant; preparing for their impact will be a substantial challenge across every industry sector. Our Preview of 2017 outlines these implications, as well as identifying other trends and issues we expect to be on the legal agenda this year.
For more information, please contact the relevant Herbert Smith Freehills partner referred to in the contact list or Simone Pearlman, head of legal knowledge on +44 (0) 20 7466 2021 or email simone. [email protected] This is a guide to key legal developments in the coming months and years ahead (UK perspective).
The District Court in Manhattan seems to have put the nail in the coffin of triangular set-off in insolvency – that is, the ability of affiliates to set off their claims against an insolvent debtor: In re Lehman Brothers Inc. (SDNY, 4 October 2011).
In 2002 a European subsidiary of Lehman Brothers created a complicated synthetic debt structure called Dante, which was intended to provide credit insurance for another subsidiary, LBSF, against credit events affecting certain reference entities, the obligations of which formed the reference portfolio. A special purpose vehicle issued notes to investors, the proceeds of which were used to purchase collateral which vested in a trust. The issuer entered into a swap with LBSF under which LBSF received the income on the collateral and paid the issuer the amount of interest due to noteholders.
On July 16th, the National Futures Association ("NFA") announced it has requested that the Special Committee for the Protection of Customer Funds, consisting of the public representatives on NFA's Board of Directors, retain the services of a national law firm to conduct a careful internal review of NFA's audit practices and procedures, and the execution of those procedures in the specific instance of Peregrine Financial Group, to assure that the right procedures are in place and that they are being properly followed.
As MF Global, Inc. declared bankruptcy on October 31st, the CFTC and SEC released a statement advising that MF Global had informed them of possible deficiencies in customer futures segregated accounts. CFTC-SEC Press Release. On November 1st, the Wall Street Journal reported that the FBI is investigating whether MF Global diverted customer funds.
On February 8th, the CFTC published for comment proposed regulations that would set forth parameters for the inclusion of an orderly liquidation termination provision in the swap trading relationship documentation for swap dealers and major swap participants. Comments should be submitted on or before April 11, 2011. 76 FR 6708.
On November 10th, the International Swaps and Derivatives Association announced that its Americas Credit Derivatives Determinations Committee resolved that a bankruptcy credit event has occurred in respect of Ambac Financial Group, Inc. An auction will be held for Ambac Financial Group for which ISDA will publish the auction terms. ISDA Press Release.
On December 16th, the CFTC published for comment amendments to its regulations concerning the operation of a commodity broker in bankruptcy. The amendments would permit a bankruptcy trustee to operate, with the written permission of the CFTC, the commodity broker in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of the commodity broker under appropriate circumstances, as determined by the Commission.