The McCaskill-Bond Amendment to the Federal Aviation Act provides that a merger of air carriers requires the new entity to merge the seniority lists of the two carriers’ employees. Republic Airways acquired Midwest Airlines, and thereafter the Teamsters Union, which represented the flight attendants at Republic’s older carriers, refused to integrate the seniority lists for flight attendants and placed Midwest’s flight attendants at the bottom of the seniority roster. A group of Midwest flight attendants challenged the action, asserting that it violated the amendment.
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.
The Commodity Futures Trading Commission has proposed to amend its Bankruptcy Rules, 17 CFR Part 190, to establish cleared over-the-counter derivatives as a separate account class for the purpose of calculating “net equity” and “allowed net equity” for each customer in the event of the bankruptcy of a futures commission merchant.
On June 26, the UK Financial Services Authority (FSA) announced that it obtained a bankruptcy order against Samuel Nathan Kahn who controlled the affairs of Chesteroak Limited (Chesteroak) and Bingen Investments Limited (Bingen). Chesteroak and Bingen were two UK-based companies that helped illegal offshore boiler rooms sell shares to investors.
Elon Musk recently said he has a "super bad feeling" about the economy, pithily declaring what most financial commentators have been predicting in more technical terms.
On November 17, 2016, the US Court of Appeals for the Third Circuit in Delaware Trust Co. v. Energy Future Intermediate Holding Co. LLC, No. 16-1351 (3d Cir. Nov. 17, 2016) clarified the often-muddy interplay between indenture acceleration provisions and "make-whole" redemption provisions, holding that Energy Future Intermediate Holding Co. LLC and EFIH Finance Inc. (collectively, "EFIH") were unable to avoid paying lenders approximately $800 million in expected interest by voluntarily filing for bankruptcy.
The trustee for the liquidation of MF Global Inc. is seeking permission from the bankruptcy judge overseeing the firm’s dissolution to make a distribution of US $461 million to unsecured general creditors. If approved, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims. To date, the trustee has distributed 100 percent of approved claims of MF Global’s customers (totaling US $6.7 billion), and 100 percent of approved secured, priority and administrative claims.
On April 15 the Federal Reserve Board (Board) and the Federal Deposit Insurance Corporation (FDIC) announced the release of additional guidance, clarification and direction for the first group of institutions filing their resolution plans pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. These 11 institutions filed their initial resolution plans with the Federal Reserve Board and the FDIC in 2012.
On November 25, a notice of proposed rulemaking was published jointly by the Federal Deposit Insurance Corporation (the FDIC) and the Departmental Offices of the Department of the Treasury (the Treasury, and collectively, the Agencies) to implement applicable provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). In accordance with the requirements of the Dodd-Frank Act, the proposed rules govern the calculation of the maximum obligation limitation (MOL), as specified in section 210(n)(6) of the Dodd-Frank Act.
On August 2, the English Court of Appeal handed down its judgment on the client money directions application made in the Administration of Lehman Brothers International (Europe) (LBIE). The Court of Appeal overturned Mr. Justice Briggs’ High Court decision in part, holding unanimously that: