This post was written by Abbey Mansfield.
Reed Smith’s Commercial Restructuring and Bankruptcy (CRAB) attorneys recently released their December 2013 newsletter covering issues in the restructuring and bankruptcy field, many of which are relevant to lenders (with one in particular noted below). The full newsletter is available here.
Included in the newsletter are the following topics:
- Detroit Gets a Fresh Start and Pension Debt is at Risk
- UK Supreme Court Finds Certain Pension Liabilities Are Not Entitled to Priority Treatment, in Nortel and Lehman Decisions
- Amount of Credit Bid Must Be Included in Calculation of Quarterly Fee
- Delaware Chancery Court Evaluates ‘Public, Commercially Reasonable’ Foreclosure Sale Under UCC
- Parent Obligor Can Pledge Subsidiary’s Collateral with Subsidiary’s Knowledge and Consent
- Lender’s Use of Debtor’s Valuation Judicially Estops Lender from Making Value Objection
- Bondholders Bound by ‘No Action’ Clause in Unitranche Financing Documents
Secured lenders may be especially interested in the topic bolded above, in which Christopher Rivas discusses a recent Third Circuit case which held that, under the California UCC, a parent company can pledge as collateral the deposit account of one of its subsidiaries, with the subsidiary’s knowledge and consent, even though the parent obligor pledging the collateral did not have legal title to the account.
Thanks to our CRAB colleagues for compiling this helpful information!