The U.S. Court of Appeals for the Eleventh Circuit recently held that the anti-modification provision in the federal Bankruptcy Code applies to loans secured by mixed-use real properties, such as the large parcel at issue here which functioned both for commercial use and as the debtor’s principal residence.

A copy of the opinion in Lee v. U.S. Bank National Association is available at: Link to Opinion.

In This Issue:

In the ten years before COVID-19, the national and global economy, along with business optimism, steadily improved. Some businesses, of course, failed as competitive pressures or mistaken assumptions led to missed projections, blown covenants, loan defaults, and financial restructuring, if not outright liquidation.

But a prudent ABL lender typically suffered little in a properly underwritten loan, even in a wind down. Receivables remained generally collectible, inventory readily converted into receivables, and machinery and equipment was salvageable at auction.

On 1 December 2011 the Farm Debt Mediation Act 2011 (Vic) commenced operation. Under the Act, a farm debt mediation scheme is implemented which makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings against the farmer on mortgages. Special Counsel, Jacqueline Browning discusses the scheme, which is about to mark its first anniversary of operation.

Key features

Some key features of the new Act (which in many ways mirrors similar legislation in NSW) are as follows:

Key Points:

There are various issues of which a secured creditor must be aware in seeking to either comply with its obligations or take steps to enforce a mortgage under the Act.

Victoria's new Farm Debt Mediation Act 2011 (Vic) commenced operation on 1 December 2011 and is largely modelled on the equivalent New South Wales legislation, the Farm Debt Mediation Act 1994 (NSW).

In brief

A recent decision by the New South Wales Court of Appeal in Buzzle Operations Pty Ltd (in liq) –v- Apple Computer Australia Pty Ltd [2011] NSWCA 109 provides useful guidance on the key aspects of shadow directorships and to what extent advices can be given by an interested party such as a financial accountant or a lender to a debtor without that interested party falling within the definition of "shadow director".

Background

The High Court’s recent decision in Bofinger v Kingsway involves the law respecting sureties, their obligation to indemnify the creditor and right to indemnity by the principal debtor, and the operation of the doctrine of equity associated with the term “subrogation”.

Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.

Asset classes used as collateral for security

Since the entry into force of the Financial Collateral Act of 15 December 2004 (the "Collateral Act") implementing Directive 2002/47/EC on financial collateral arrangements as regards linked systems and credit claims (the "Collateral Directive"), financial collateral arrangements have benefitted from increased flexibility and legal certainty in Belgium.

Good evening,

Below are this week’s summaries of the civil decisions of the Court of Appeal.

Topics this week included personal injury, family law, employment law, property law, mortgages, bankruptcy and insolvency and extensions of time to appeal.

Have a nice weekend.