The recent Court of Appeal case involving Topland Limited and Smiths News Trading Limited was a salutary lesson about the strict rules that protect guarantors and the perils of forgetting them. The facts of the case were relatively simple: Topland owned a commercial property, leased to the rather aptly named Payless DIY Ltd, which became insolvent. Topland brought a claim against the tenant’s guarantor, Smiths, for arrears of over £280,000 and required them to take a new lease for the remainder of the term.
The central question in Rubin v Eurofinance SA, [2012] UKSC 46, was whether the English courts ought to recognise the order or judgment of a foreign court to set aside transactions determined to be preferential or to have been at an undervalue, in circumstances where the defendant in the foreign proceedings was not present in the foreign jurisdiction or had not voluntarily submitted to its courts.
October 30, 2012 - The UK Supreme Court has released a decision that significantly impacts cross-border insolvency proceedings: Rubin v. Eurofinance SA and New Cap Reinsurance Corporation v. A E Grant [2012] UKSC 46.
A recent decision by the Third Circuit in the Nortel Group bankruptcy reinforces the worldwide reach of the automatic stay and the narrow scope of the police power exception under section 362(b)(4) of the Bankruptcy Code. In Nortel Networks, Inc. v. Trustee of Nortel Networks U.K. Pension Plan, No. 11-1895 (3d Cir. Dec. 29, 2011), the Third Circuit held that the automatic stay barred U.K. pension claimants from participating in U.K. proceedings meant to determine the debtors’ liability for their affiliate’s pension funding shortfalls.
What role does business common sense play in the interpretation of commercial contracts? This issue was recently addressed by the Supreme Court of the United Kingdom in Rainy Sky S.A. v. Kookmin Bank. The answer: “where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense”. Since there is currently some uncertainty in Canada on the point, Rainy Sky is an important case to consider.
Decision
Adopting the analysis of the United Kingdom Jurisdictional Task Force ('UKJT") on the proprietary status of crypto currencies, a recent decision of the English High Court, AA v Persons Unknown,[1] has found that crypto assets such as Bitcoin are "property" and therefore capable of being the subject of a proprietary injunction or freezing order.
2007 BCSC 267 (B.C. Supreme Court, Feb. 28, 2007)
Trustee in bankruptcy must affirm swap contracts to take advantage of them but is not personally liable if the contracts end up being out of the money - While contract gave buyer a termination right on bankruptcy, it could choose not to exercise this option and leave it to the trustee to decide whether or not to affirm the swap and take the risk that the estate will end up out of the money
A recent decision of the Privy Council dismissing the claim of liquidators of an insolvent hedge fund to claw back redemption payments made to an investor leaves lingering uncertainties for investors generally.
Claw backs post 2008 crisis
Key Points
- A trust can be created and enforceable in respect of assets sited in a jurisdiction that does not recognise the concept of a trust
- In circumstances where the owner of a beneficial right goes into liquidation, the transfer of legal rights held by a third party to a bonafide purchaser for value is not a disposition within the meaning of s127.
The Facts