The Second Circuit ruled last week in Lehman Bros. Special Fin. Inc. v. Bank of Am. Nat'l Ass'n, No. 18-1079 (2d Cir. 2020) that a Lehman Brothers affiliate cannot claw back $1 billion in payments made pursuant to swap agreements that were terminated when Lehman Brothers Holdings Inc. (“LBHI”) and certain of its affiliates filed for bankruptcy in 2008. The panel concluded that the Bankruptcy Code provides a safe harbor for the liquidation of such swap agreements and also the distribution of proceeds from the collateral.
On 17 June 2020, the much anticipated Judgment in the Supreme Court case of Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd [2020] was handed down.
This article analyses the key outcomes of the decision, however, in order to contextualise the Judgment we first provide an overview of the relevant background.
The Technology & Construction Court
The Bottom Line
Retrospective changes introduced by the Corporate Insolvency and Governance Act 2020 to the wrongful trading regime to mitigate the impact of the Coronavirus (COVID-19) pandemic.
On 26 June 2020 the Corporate Insolvency and Governance Act 2020 (“the 2020 Act”) finally entered into force. Since then Simon Newman and Christopher Pask of 1 Chancery Lane’s Property, Chancery and Commercial team have been offering their views on its provisions and their impact over a series of updates.
On June 11, 2020, the U.S. Court of Appeals for the 9th Circuit in Blixseth v. Credit Suisse, 961 F.3d 1074 (2020), held that a chapter 11 plan may contain a “narrow exculpation clause” that releases claims against non-debtor parties for actions relating to the plan approval process. Although the opinion does not endorse broad nonconsensual third party releases that are available in certain other circuits under limited circumstances, it nevertheless opens the door to additional protections for creditors that typically take an active role in chapter 11 cases.
On July 2, 2020, the Court of Appeal for Ontario (the “Court”) released its decision in Hutchingame Growth Capital Corporation v.
On August 12, the U.S. District Court for the District of Colorado reversed in part a bankruptcy court judgment, concluding that the OCC’s valid-when-made rule applied but that discovery was needed to determine whether a nonbank entity was the true lender.
In a recent judgment, the Hong Kong Court reiterated the principles outlined in Kam Leung Sui Kwan v. Kam Kwan Lai [2015] 18 HKCFAR 501 (Yung Kee), the case concerning the famous roastgoose restaurant in the heart of Hong Kong's Central district, when determining whether to exercise its discretion to wind up a foreign-incorporated company. In this case, the court also refused to grant a stay of the petition in favor of arbitration.
Florida escape
When entertaining a jurisdictional challenge to wind-up a foreign company with no place of business in Hong Kong, is it a material concern that alternative remedies for unfair prejudice are available at the company’s place of incorporation but not in Hong Kong (“Question”)?
New restrictions contained in the Corporate Governance & Insolvency Act 2020 now in force severely impact the steps creditors can take to get payment of an undisputed debt owed by a company.
Creditors cannot now use statutory demands to threaten that a company will be wound up if it does not pay what is owed. This is because any statutory demand made between 1 March 2020 and 30 September 2020 will be void.