English Court considers the issue of COMI location for 3 Jersey companies

Shopping CentreThe recent case of Thomas & another v Frogmore Real Estate Partners & others [2017] EWHC 25 (Ch) provides useful guidance for anyone analyzing the centre of main interests (“COMI”) of a company not registered in the UK or other EEA state for the purposes of assessing whether or not insolvency proceedings relating to the company can be instigated in the UK courts under the EC Regulation.

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Tenant Troubles- A minefield for the receiver

Airing LaundryManaging residential tenanted property can be a challenge for receivers. In many cases, it is necessary for them to act as “accidental landlords” to maximise the potential realisations to the appointing lender. These lenders have lent money to companies or individuals who invest in residential blocks and collect rents from their tenants. When the borrowers default, the lenders appoint receivers to collect the rents and ultimately sell the blocks of flats. It sounds straightforward but dealing with numbers of individual tenants and knowing the statutory regime which regulates residential lettings can be a minefield for the unprepared.

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What You Do Won’t Help (But What You Can’t Do Might): The Sixth Circuit Clarifies Defenses to Fraudulent Transfers

Old chain and new paperclipIn Meoli v. The Huntington National Bank (In re Teleservices Group, Inc.), the U.S. Court of Appeals for the Sixth Circuit examined the elements of “good faith” and “knowledge of the voidability of the transfer avoided” that initial and subsequent transferees must establish when defending against fraudulent transfer claims brought under sections 548 and 550 of the Bankruptcy Code. The Sixth Circuit’s Teleservices opinion may provide helpful guidance to defendants in fraudulent transfer actions.

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We’re all going on a summer holiday – but make sure it’s ATOL protected

Piggy Bank on the BeachThe decorations are down, the last of the Quality Street has been consumed and the New Year’s resolutions are a distant (and perhaps failed) memory…….suddenly the dreary weather leads to thoughts of sunshine and distant shores. Travel companies have dubbed the first Saturday in January ‘Sunshine Saturday’ as many holidaymakers plot their escape during the hardest month of the year. It certainly seems to be sunny for travel company TUI Group this year who reported that more than 27,500 customers in the UK booked their annual holiday with them on 7 January 2017.  Erik Freimuth, Chief Marketing Officer of TUI Group, has reported that ‘many families use the Christmas break and the beginning of the new year to make their travel plans for the whole year. There could also be a psychological explanation for this post-festive season booking pattern: the cosy Christmas period is over, people have to return to work while the sky is grey. This is when the winter blues kick in. A way to escape is to think of sunshine and beaches – and book a summer holiday’. Continue Reading

Constructive discretion: Allowing legal proceedings during the statutory moratorium

Balance ConceptParties in the construction sector seeking to enforce an adjudicator’s decision against a company with the benefit of a statutory moratorium were given fresh guidance in the recent case of South Coast Construction Ltd v Iverson Road Ltd [2017] EWHC 61 Continue Reading

Third Party Funder Subrogated to IP’s Right to Payment of Fees

Businessman Requesting MoneyThe availability of the remedy of subrogation has been explored at length by the courts recently. The leading authority of Bank of Cyprus Limited v Melenaou is thought to be the first of its kind where a lender has been entitled to be subrogated to an unpaid vendor’s lien where the lender did not advance funds for the purchase of the property. The principles identified in that case were considered and applied in the case of TOC Investments Corporation v Beppler & Jacobson Ltd, where a third party funder was entitled to be subrogated to the provisional liquidator’s rights to receive payment of their fees. Continue Reading

Is It Really Over? Appellate Court Finds Lack of Jurisdiction to Hear Bankruptcy Appeal

Hanging FinalIn a recent ruling, the U.S. Court of Appeals for the Eleventh Circuit examined whether circuit courts have jurisdiction to hear direct appeals of unauthorized bankruptcy court orders that have not been reviewed by a district court. This was an issue of first impression in the Eleventh Circuit.  The appellate court held that a bankruptcy court’s ruling in a non-core proceeding that has not been reviewed by the district court carries no adjudicative authority and is therefore not directly appealable to the circuit court.  The court of appeals returned the case to the district court for further proceedings.

At issue in Wortley v. Bakst were a number of adversary proceedings arising in the Chapter 7 bankruptcy of Pennsylvania-based Trafford Distribution Center (“Trafford”). The bankruptcy judge presiding over the bankruptcy case and the adversary proceedings was accused of showing favoritism to the Chapter 7 trustee’s law firm which had hired his fiancé while the bankruptcy case and adversary proceedings were pending.  The law firm prevailed in the adversary proceedings and the defendants, collectively referred to as the “Wortley parties,” were ordered to pay over $2.5 million to Trafford’s bankruptcy estate.

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Marblegate’s Lost Marbles and Why Bondholders and Indenture Trustees Should Care

Old Glass MarblesThis week the U.S. Court of Appeals for the Second Circuit issued its highly-anticipated ruling in Marblegate Asset Management, LLC v. Education Management Corp. (“Marblegate”).  At issue in Marblegate was whether Education Management Corp. (“EDMC”) violated the Trust Indenture Act when it implemented a restructuring that impaired the rights of Marblegate Asset Management, LLC (“MAM”).  The Second Circuit reversed the District Court’s decision in favor of MAM, and held that EDMC’s restructuring did not violate the TIA.  The Second Circuit’s majority opinion is narrow and finds that the TIA “prohibits only non-consensual amendments to an indenture’s core payment terms.”  The dissenting opinion views the facts from a completely different perspective and states that Section 316(b) should protect bondholders from “collusively engineered” restructurings. Continue Reading

Bradford Bulls arise from the ashes?

rugby-postsFollowing the liquidation of Bradford Bulls earlier this month, the Rugby Football League have agreed a deal for a new rugby league team based in Bradford to commence life in the Kingstone Press Championship for the start of the 2017 season on 5th February 2017.

After a brief bidding process for the rights to incorporate the new club, former New Zealand Rugby League chairman Andrew Chalmers and ex-Wigan coach Graham Lowe have been announced as the owners of the newly formed club. A company named Bradford Bulls 2017 Limited was incorporated on 13 January 2017 and it is anticipated that this entity will be the operating company for the new team.  The newly formed company is wholly owned by the New Zealand registered company The Orcas Rugby League Limited, which is associated with Chalmers and Lowe. Continue Reading

Are Structured Dismissals on Hold Pending the Supreme Court’s Decision in Jevic?

Access denied signAmerican Apparel, the struggling clothing manufacturer and retailer, found itself in chapter 11 this past November after failing to implement its turnaround plan amid a challenging retail environment.  Last week, Judge Shannon in the District of Delaware approved a largely consensual sale of American Apparel’s assets to Gildan Activewear.  While the hearing transcript is not yet available, several sources are reporting that, when discussing next steps in the case, Judge Shannon indicated that he is not likely to entertain a structured dismissal.  In fact, one source quoted Judge Shannon as saying he “is not likely going out on that limb now” and that “to the extent [he is] the structured dismissal guy, [he is] on hiatus.” Continue Reading