“Transaction fees are part of the standard, negotiated base compensation for the investment banker,” held the Bankruptcy Court for the Southern District of New York on Dec. 16, 2016. In re Relativity Fashion, LLC, 2016 Bankr. LEXIS 4339, *10 (Bankr. S.D.N.Y. Dec. 16, 2016) (Wiles, B.J.). The court denied objections to the transaction fees sought by two investment bankers, P and H, ruling that the objecting parties (a fee examiner, the debtor and a secured lender) had no right under Bankruptcy Code (“Code”) § 328(a) to challenge the transaction fees. Id. at *25.

Key point

The Joint special administrators of an investment banking entity succeed in obtaining a direction to allow them to distribute client assets quickly.

Facts

Peter Bloxham has completed the first phase of his independent review of the Investment Bank Special Administration Regulations 2011 and in February 2013 presented an interim report, which HM Treasury has now published. In addition to making a number of immediate recommendations, the interim report sets out further areas to be reviewed as part of a second phase of work.

The High Court has held that a bank owed a duty of care to its customer when on notice that an agent acting for the customer was misusing his authority. In the case of Singularis Holdings Limited (in Official Liquidation) v Daiwa Capital Markets Europe Limited [2017] EWHC 257 (Ch), a bank was liable in negligence to its customer since it was on notice that its customer was at risk of being defrauded by its director but failed to stop payments made for the purpose of misappropriating funds of the company.

The Facts

The Investment Bank Special Administration Regime (SAR) was introduced in 2011 in response to difficulties faced in the Lehman Brothers administration. Following a review of the regime by Peter Bloxham in 2014, and a Government consultation in 2016, the Treasury has introduced draft regulations to improve the regime - The Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017.

On May 20, 2010 the Senate passed the Restoring American Financial Stability Act of 2010 (the "Senate Bill") 59-39, only hours after the cloture vote ended debate on the bill. The House passed its version—the Wall Street Reform and Consumer Protection Act of 2009 (the "House Bill")—in December 2009. The primary stated focus of the Senate and House Bills is to prevent the failure of the "too big to fail" institutions and to avoid government (taxpayer) bailouts in the future.

Introduction

In this memorandum opinion, the Court of Chancery considered a motion to dismiss claims brought on behalf of Insilco Technologies, Inc. (“Insilco”) by the plaintiff, a bankruptcy court appointed Creditor Trustee. Among other claims, plaintiff brought claims for breach of fiduciary duty against Insilco’s controlling stockholder, a group of affiliated funds (the “DLJ Funds”) allegedly dominated and controlled by DLJ, Inc. and DLJ Merchant Banking, Inc. (“DLJMB”) (collectively, “DLJ”), and a group of DLJ-affiliated directors who comprised a majority of Insilco’s board.

Introduction

On September 16, HM Treasury published its third consultation on new insolvency arrangements for investment firms. The consultation sets out the government’s final proposals for a special administration regime (SAR) for investment firms.