International

Client Money Protection after the Lehman Collapse

One of the by-products of the Lehman insolvency is an increased focus on client money protection. The decision of Briggs J in the Lehman case concerning client moneys, reported as Lehman Brothers International (Europe) (in administration) v. CRC Credit Fund Limited & Ors, [2009] EWHC 3228, highlights a number of deficiencies in the current regime.

Basel Committee Urges Cooperation Among Cross-Border Bank Regulators

The Basel Committee on Banking Supervision may be most widely known as the originator of the “Basel Capital Standards,” “Basel II” and “Basel [III].” They provide guiding principles for capital for credit institutions (principally deposit-taking institutions) and related actors in the organized and regulated financial markets. The committee traces its origins largely to bank failures. The collapse of Bankhaus Herstatt and of Franklin National Bank and related entities in the 1970s provided important reasons for the formation of the committee.

Constraints on Stay Relief Afforded to Chapter 15 Debtors

At one time, insolvency proceedings were primarily confined to one jurisdiction. However, in the age of expanding globalization, corporate insolvencies may now involve businesses and assets in multiple jurisdictions.

More Than Just a Letterbox: Saad Investments Recognized Under Chapter 15 and the Perils of Providing Too Much Information

The U.S. Bankruptcy Court for the District of Delaware recently granted recognition under chapter 15 of the Bankruptcy Code to the foreign liquidation proceedings of Saad Investments Finance Co. (No. 5) Ltd. (SIFCO 5).[1] The debtor is incorporated as an “exempted company” under the Cayman Companies Law.

Third-Party Releases Enforced in Chapter 15 Recognition Proceedings

Recently, the US Bankruptcy Court for the Southern District of New York, in In re Metcalfe & Mansfield Alternative Investments, held that broad nondebtor, third-party releases previously approved as part of foreign restructuring proceedings under the Canadian Companies’ Creditors Arrangement Act (CCAA) where the restructuring plan was adopted by 96 percent of its creditors would be enforced in U.S.

U.S. Bankruptcy Court Orders Turnover of Attached Funds for Administration in Danish Bankruptcy Proceeding

In In re Atlas Shipping A/S, 404 B.R. 726 (Bankr. S.D.N.Y. 2009), the U.S. Bankruptcy Court for the Southern District of New York vacated maritime attachments and ordered the turnover of funds in New York to the foreign representatives of a shipping company that was in bankruptcy in Denmark. The U.S. court rejected the attaching creditors’ contention that vacatur of the attachments could not be granted to the foreign representatives in a chapter 15 case due to the carve-out of avoidance relief in §1521(a)(7) of the U.S. Bankruptcy Code.

The Failing Quest for Gold & Honey - New Barriers to Recognition under Chapter 15 and an Impasse for Foreign Receivers

On Aug. 21, 2009, the U.S. Bankruptcy Court for the Eastern District of New York issued a memorandum opinion in In re Gold and Honey, Ltd.[1]denying recognition of petitions filed by receivers appointed by the Tel-Aviv-Jaffa District Court for the State of Israel. The court found that the receivers failed to meet their burden in showing that the Israeli receivership proceeding was a “foreign proceeding” within the Bankruptcy Code’s definition.

Court Grants Comity to Danish Bankruptcy Case and Vacates Prepetition Admiralty Rule B Attachment

In CSL Australia Pty. Ltd. v. Britannia Bulkers PLC, et al., 2009 U.S. Dist. LEXIS 81173 (S.D.N.Y. Sept. 8, 2009), the defendant Britannia Bulkers PLC (Britannia), a Denmark corporation with its only place of business in Svendborg, Denmark, filed a motion against the plaintiff CSL, an Australian corporation with its place of business in St. Leonard’s, New South Wales, Australia, to vacate a maritime attachment issued in favor of CSL.

Making Sense of Jurisdictional Chaos: Chapter 15 Protects the Corporate Group

Jurisdictional battles are not inevitable when assets and liabilities span borders. Notwithstanding some criticism of the rigid application of standards, chapter 15 of the U.S. Bankruptcy Code has proved to be a flexible and effective tool for cross-border restructuring since its enactment in 2005.[1] A popular misconception is that a chapter 15 ancillary case is not a realistic option for a corporate group with a material U.S.

Reconfiguration of Labor Claims under the New Brazilian Bankruptcy Law: A Constitutional Hurdle?

Since the new Brazilian "Bankruptcy Law" (Federal Law No. 11101) was enacted on Feb. 9, 2005, and became effective on June 9, 2005, scholars and practitioners have held wide-ranging discussions about the constitutionality of some of its provisions. The new legislation represents a paradigm shift from a legal framework dating back decades as new provisions were added to protect the rights of labor and tax claimants.

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