Lehman "Waterfall IIC" Judgment Handed Down - Meaning of Default Rate in ISDA Master Agreements
Mr Justice Hildyard today handed down judgment in the latest instalment of the Lehman “Waterfall” litigation arising out of the collapse of Lehman Brothers International (Europe) (LBIE). The judgment addresses the interpretation of key provisions in the 1992 and 2002 ISDA Master Agreements concerning interest on sums due following the close-out of transactions upon early termination. It also addresses similar issues arising under a German law governed form of master agreement.
EU Regulation on Insolvency Proceedings 3rd Edition- Now available
The EU Regulation on Insolvency Proceedings (third edition) has just been published. The publication, widely cited by courts in the EU, provides an explanation of the existing Regulation and Recast Regulation with expert commentary from leading practitioners in the field.
FIRST JUDGMENT HANDED DOWN IN THE FINANCIAL LIST
Mr Justice Robin Knowles CBE today handed down the judgment in GSO Credit – A Partners LP v Barclays Bank Plc  EWHC 146 (Comm), in which Tom Smith QC and Andrew Shaw appeared on behalf of the successful Claimants, funds managed by GSO Capital Partners.
This was the first substantive judgment given in the new Financial List, which was established in October 2015 as a joint initiative involving the Chancery Division and the Commercial Court in order to allow claims related to financial markets to be heard by judges with suitable expertise and experience.
Judgments handed down in "Waterfall II" application
Mr Justice David Richards today handed down two judgments relating to the Lehman Brothers Waterfall II application, which address a number of important and novel points of insolvency law arising from the £7 billion surplus in the estate of Lehman Brothers International (Europe) (“LBIE”).
COURT RULES TRUSTEE IN BANKRUPTCY HAS NO COMMON LAW DUTY OF CARE TO BANKRUPT
In Oraki & Oraki v Bramston and Defty Mrs Justice Proudman ruled that a trustee in bankruptcy has no common law duty of care to the Bankrupt, as opposed to statutory duties under the Insolvency Act 1986, even where the bankrupt’s estate is arguably solvent.
Claims of professional negligence against the defendants, former trustees in bankruptcy of the Orakis, were dismissed.
John Briggs represented the defendants.
Click here for a summary and analysis of the judgment.
The future of cross-border insolvency - research findings published
With recent high-profile decisions in mind, including the Privy Council in Saad Invtestments and Singularis, South Square in collaboration with Grant Thornton have carried out a survey polling the views of the international insolvency community on dealing with insolvencies across different common law jurisdictions. Lawyers and other experts from 50 leading organisations across 12 jurisdictions have taken part in the research.
The report explores strategies for fostering greater collaboration between jurisdictions to improve cooperation and consistency, and ends by focusing on perspectives of eight of the offshore jurisdictions: Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Hong Kong, Ireland, Isle of Man and Jersey.
The Executive Summary of the report From discord to harmony is now available.
To view a copy of the full report, please contact Joanna Colton at firstname.lastname@example.org
Victory for investors BNY Mellon in High Court bond dispute
BNY Mellon, which is the trustee of high-yield bonds known as enhanced capital notes (ECNs) with a par value of £3.3bn issued by Lloyds Banking Group, argued successfully that Lloyds was not entitled to redeem the ECNs at par in advance of their respective maturity dates.
Butterworths Insolvency Law Handbook (Seventeenth Edition) - now available
Butterworths Insolvency Law Handbook (Seventeenth Edition), the most comprehensive collection of statutory source material and practice directions relating to insolvency law in England, Wales and Scotland , is now available.
Co-edited by Glen Davis QC and Marcus Haywood, the publication chronologically covers the most important statutes, statutory instruments and European legislation, with amendments made by new law incorporated into the text of existing legislation.
Court of Appeal hands down judgment in the "Waterfall" appeal
The Court of Appeal has handed down its judgment in the Waterfall I Appeal, a dispute as to the distribution of the estimated £7 billion surplus of assets in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).
In its judgment against the decision of David Richards J, the Court of Appeal has clarified a variety of issues relating to a very unusual set of circumstances, namely: (a) one of the companies (LBIE) being an unlimited company with a surplus arising in its administration; and (b) that company’s members (LBHI2 and LBL) having unlimited liability as contributories.
Cross-Border Insolvency Fourth Edition - now available to order
Saad Privy Council Judgments Handed Down
The Privy Council have this morning handed down judgments in the two long-awaited outstanding Saad appeals.
PricewaterhouseCoopers v. Saad Investments Company Limited  UKPC 35
Singularis Holdings Limited v. PricewaterhouseCoopers  UKPC 36
PricewaterhouseCoopers has succeeded on each of the appeals - as Appellants in the first appeal (“the SICL Appeal”) and as Respondents in the second appeal (“the Singularis Appeal”).
Click here for a summary and analysis of the judgments.
For the full judgments:
Dubai Judge Approves Espirito Santo Liquidation
In one of the first insolvency proceedings under the Dubai International Financial Centre (DIFC) Insolvency Law, the court has approved an application to liquidate Espirito Santo Bankers Dubai (ESBD).
The Dubai Financial Services Authority (DFSA), represented by South Square’s Tom Smith QC, submitted an application to the DIFC court for the winding up of ESBD on September 29. The Portuguese conglomerate was deemed insolvent in both cash-flow and balance sheet terms, with a liquidity shortfall of around 54 million euros.
Irregularities were first identified at Espirito Santo earlier this year, leading to a 4.9 billion euro ($6.3 billion) bailout of Banco Espirito Santo, formerly Portugal’s largest listed bank, and global court actions against the group.
At Sunday’s hearing, Justice David Steel said the liquidation of ESBD would serve the best interests of the DIFC and the bank’s 31 creditors, paving the way for them to claim back outstanding debts owed to them.
Philip Bowers and Neville Kahn of advisory firm Deloitte will act as joint liquidators.
Court sanctions schemes of arrangement where governing law changed to English law
Barry Isaacs QC and Adam Goodison today represented nine companies in the Apcoa Parking group which had applied for the sanction of schemes of arrangement under Part 26 of the Companies Act 2006. Simon Mortimore QC represented a number of supporting creditors. The applications were heard by Mr Justice Hildyard in the Companies Court, Chancery Division, High Court of Justice. Please click here for a summary of the judgment.
Games Station: Court of Appeal Overrules Goldacre and Luminar
The Court of Appeal today handed down judgment in Jervis v Pillar Denton; re Games Station, in an important ruling for administrators and landlords as to the true scope of the “salvage” or “Lundy Granite” principle as it applies to rent falling due during the period of administration.
Three South Square barristers were involved in the appeal. The Landlords were represented by Antony Zacaroli QC and Hannah Thornley, instructed by Berwin Leighton Paisner LLP, while the administrators of the Game group were represented by Daniel Bayfield, instructed by Linklaters LLP. Please click on the link for our summary of the judgment.
Lehman Brothers International (Europe) - Waterfall Application Decision
Mr Justice David Richards today announced his decision in the Lehman “waterfall” application, which addressed a number of issues arising from the likelihood of a surplus in the estate of Lehman Brothers International (Europe) (“LBIE”) after payment of all proved debts.
Four silks and two juniors from South Square, representing three different parties, appeared on the application: William Trower QC and Daniel Bayfield (representing the joint administrators of LBIE); Antony Zacaroli QC and David Allison (representing a creditor of LBIE); and Barry Isaacs QC and Mark Arnold QC (representing Lehman Brothers Holdings Inc). Please click on the link for our summary of the judgment.
Lehman - Nortel briefing
The Supreme Court today handed down judgment in the Lehman and Nortel pensions appeals  UKSC 52, reversing the decisions of Briggs J and the Court of Appeal and, in the process, sweeping aside numerous other well-known and long-established decisions.
Gabriel Moss QC, Richard Sheldon QC, Mark Phillips QC, Robin Dicker QC, William Trower QC, Barry Isaacs QC, Felicity Toube QC, David Allison, Daniel Bayfield, Tom Smith QC and Stephen Robins all appeared before the Supreme Court.
To read our briefing note on this important decision, please click here.
Eurosail decision in the Supreme Court
The Supreme Court has today handed down judgment in the BNY Corporate Trustee Services Limited v Eurosail-UK 2007-3BL PLC appeal  UKSC 28 concerning the meaning of Section 123(2) of the Insolvency Act 1986 (the “Act”). The Supreme Court has unanimously dismissed the appeal (Lords Hope, Walker, Mance, Sumption and Carnwath).
All parties before the Supreme Court were represented by members of South Square (Gabriel Moss QC, Robin Dicker QC, Jeremy Goldring QC, David Allison and Richard Fisher). Members of chambers involved at earlier stages of the litigation included Richard Sheldon QC and Daniel Bayfield. Please click on the links for our press release and summary of the judgment.
Heritable Bank v Landsbanki Supreme Court Judgment
There was considerable representation from South Square barristers at the recent Supreme Court case between the Joint Administrators of Heritable Bank plc (Respondent) and The Winding-Up Board of Landsbanki Islands hf (Appellant). Barristers involved included David Alexander QC and Stephen Robins (for the appellant) and Gabriel Moss QC, Martin Pascoe QC and Georgina Peters (for the respondent). To read the judgment, please click here.