Oral arguments occur on April 24, 2023, before the U.S. Supreme Court in Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, Case No 22-227. Here is a link to the oral arguments transcript.

What follows is an attempt to, (i) summarize the facts and issue in the case, and (ii) provide a sampling of questions and comments from the justices during oral arguments.

Facts

Here’s what happened:

On May 5, 2023, the SEC filed a civil complaint in the U.S. District Court for the Northern District of New York against a mutual fund’s adviser for aiding and abetting violations of Rule 22e-4 (the “Liquidity Rule”) by the mutual fund it advised (the “Fund”) and whose Liquidity Risk Management Program (“LRMP”) it administered.

This week’s TGIF considers In the matter of BCA National Training Group Pty Ltd (in liq) [2023] NSWSC 366, in which the priority between a liquidator’s remuneration and expenses claims and the claims of preferred creditors was clarified.

Key takeaways

Businesses are still struggling to recover post-Covid, with corporate insolvency figures continuing to rise. Recent research shows that the most common company insolvency procedure is creditors’ voluntary liquidation (CVL) and in March 2023, there was the highest monthly total of CVLs since January 2019.

The sectors that appear to have been hit the hardest are construction; wholesale and retail; accommodation and food services.

In Reel Action Sports Fishing Pty Ltd v Marine Engineering Consultants Pty Ltd, [1] the Court offered a timely warning to liquidators of the dangers of adopting and acting on an incorrect understanding of the ownership of contested property. The Court ordered damages against the liquidator personally, despite his position as agent for the company in liquidation.

Background

In a decision likely to be welcomed by both debtors and lenders, the High Court has held that a charge granted by Avanti Communications Limited (“Avanti”) was properly characterised as a fixed charge (rather than a floating charge) notwithstanding that the chargor retained an element of control over the charged assets. A key plank of the decision was that the relevant assets were not ‘fluctuating assets’ or ‘stock in trade’ that the chargor might be expected to dispose of in the ordinary course of its business.

The Hong Kong Court of Final Appeal (CFA) has confirmed a Court of Appeal finding that the court should respect the effect of an exclusive jurisdiction clause in bankruptcy proceedings, just as it does in ordinary civil actions.

Die Giesserei Schmidt GmbH & Co. KG kann den Betrieb fortsetzen. Für den Cuxhavener Traditionsbetrieb wurde ein Investor gefunden, der den Betrieb vollständig und unter Erhaltung aller 57 Arbeitsplätze übernimmt. Zugleich übernimmt der bisherige Betriebsleiter Peter Heinze die Geschäftsführung.

Bei dem Investor handelt es sich um Jens Jäger, der über eine umfangreiche Erfahrung in der Sanierung von Unternehmen verfügt. Jäger sieht erhebliches Potential in beiden Gießereistandorten und plant umfangreiche Investitionen sowie Neueinstellungen.

The foundry Schmidt GmbH & Co. KG can continue operations. An investor has been found for the traditional Cuxhaven-based company, who will take over the business in its entirety while retaining all 57 jobs. At the same time, the previous plant manager Peter Heinze will take over the management.

The investor is Jens Jäger, who has extensive experience in turning around companies. Jäger sees considerable potential in both foundry sites and plans extensive investments as well as new hires.

Introduction