Welcome to this edition of our bulletin.
When does an obligation constitute a guarantee or an indemnity – or when is it merely of comfort? And why does it matter? In three articles we consider different aspects of these questions arising from recent cases. Andrew and Matt (Grant) consider the implications of the High Court’s decision in NatWest Markets v CMIS in which it determined whether an agreement was a guarantee or an indemnity. Next, the High Court then tackled the nature of a so-called “letter of comfort” finding it was – despite the label – a binding guarantee and indemnity: Helen and Andrew discuss. And in our third article on this topic, Matt (Padian) and Laura consider the ingredients essential to enable a guarantee to found a bankruptcy petition.
The division of the proceeds of the enforcement of security between senior and junior creditors was recently before the High Court. In Brooke Homes the court considered the amounts which the senior creditor could properly retain and those which had to be paid over to the junior creditor. Helen and Andrew provide more background and analysis.
And in an article for The Journal of International Banking and Financial Law, Matt (Padian) discusses the difficulties inherent in transferring security interests and offers some points for practitioners to consider.
Let us know if you have any comments on the items covered, or suggestions for topics for us to cover in the future.
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Matthew Padian
Andrew Dodds