This case considers the ability of the Court to ensure that similarly ranked creditors of a debtor are treated equally prior to the commencement of any insolvency procedure including a just and equitable winding up application.
Background
Mr Breifne O'Brien lives in Ireland. In 2008 and 2009 a number of creditors in that jurisdiction obtained judgments against him in the Irish High Court. The Irish Court injuncted Mr O'Brien from dealing with his assets within or without the jurisdiction below €20,000 million.
The credit crunch has put pressure on a wide range of structures and, as a result, lenders, borrowers and other counterparties are looking more closely at the impact of possible insolvency proceedings. As Jersey companies have often been used in cross-border finance transactions, it is important to be aware of the differences between Jersey and English insolvency procedures for companies.
What are the main Jersey insolvency procedures for a Jersey company?
These are:-
When doing business with a foreign company, it is important to identify the company’s “center of main interests” (“COMI”) as creditors may find themselves bound by the laws of the COMI locale. If a company initiates insolvency proceedings outside the U.S., it must petition a U.S. court under Chapter 15 of the Bankruptcy Code for recognition of the foreign proceeding.
The United States District Court for the Middle District of Pennsylvania has held that an E&O policy issued to a now-bankrupt credit counseling company did not cover claims arising under unfair trade practices statutes, but did cover claims arising under fair debt collection statutes. Hrobuchak v. Fed. Ins. Co., 2013 WL 2291875 (M.D. Pa. May 24, 2013). The court also held that carve-outs from the policy’s definition of loss did not preclude coverage for statutory damages or damages representing the return of fees paid to the insured.
In an adversary proceeding brought by a liquidating company to determine the availability of coverage under the debtor's insurance policies, the United States District Court for the District of Delaware has held that the insolvency of an underlying insurer did not affect an excess carrier's obligation for claims within its own layer of coverage. In re Integrated Health Services, Inc., 2007 WL 2687593 (D. Del. Sept. 12, 2007). Although the adversary proceeding was initially filed in bankruptcy court, it was consensually withdrawn to the district court.
The United States District Court for the Middle District of Pennsylvania has held that an E&O policy issued to a now-bankrupt credit counseling company did not cover claims arising under unfair trade practices statutes, but did cover claims arising under fair debt collection statutes. Hrobuchak v. Fed. Ins. Co., 2013 WL 2291875 (M.D. Pa. May 24, 2013). The court also held that carve-outs from the policy’s definition of loss did not preclude coverage for statutory damages or damages representing the return of fees paid to the insured.
The Court of Appeals for the Fourth Circuit recently held that a bankruptcy court did not have jurisdiction to hear a chapter 11 debtor's breach of contract and tortious interference claims, which the debtor filed after its chapter 11 plan had been confirmed and substantially consummated. Valley Historic Limited Partnership v. Bank of New York, No. 06-1571,___ F.3d ___, WL 1439734 (4th Cir. May 17, 2007). This decision delineates the limits of bankruptcy court's jurisdiction over claims filed by the debtor after plan confirmation.
Background
The United States Bankruptcy Court for the District of Delaware, applying federal law, has held that certain lawsuits brought by a bankruptcy trustee were related claims, even though they alleged unique causes of action, because they were based upon the same course of conduct. The court also found that the trustee was pursuing claims both on behalf of the policyholder-debtor and its subsidiaries, and therefore the application of the insured versus insured exclusion was “unclear.” Nonetheless, the court found that the individual insureds were entitled to 100% of their defense cos
The United States Bankruptcy Court for the District of Massachusetts has denied injunctive relief requested by two bankruptcy trustees seeking to stay the prosecution and settlement of shareholder actions proceeding against various former officers and directors of a bankrupt corporation. In re Enivid, 2007 WL 806627 (Bankr. D. Mass. Mar. 16, 2007).
The Commonwealth Court of Pennsylvania, which is overseeing the liquidation of the insurer in the coverage dispute, entered an order approving the insurer’s denial of coverage under an excess policy for a $20 million settlement that two individual insureds paid into a Federal Trade Commission (FTC) redress fund. The court adopted the recommendation of the referee appointed to hear the coverage dispute, who applied California law and concluded that the insurer was entitled to summary judgment following briefing and oral argument. Wiley Rein represented the insurer before the referee.