United Cannabis Corporation (“United Cannabis”) and its wholly-owned subsidiary, UC Colorado Corporation, filed for Chapter 11 bankruptcy protection in the Bankruptcy Court for the District of Colorado on April 20, 2020. United Cannabis’ primary line of business is operating extraction facilities to convert compounds of industrial hemp flower into finished CBD products, while also deriving a limited amount of revenue from licensing its IP to plant touching businesses. The United Cannabis bankruptcy proceeding could be a unique test case for the cannabis industry.
Given the current worldwide economic climate, the number of companies facing insolvency that have assets in multiple jurisdictions around the world has increased dramatically. It is not unusual in today’s global economy for a corporation to have commercial offices, production plants and/ or research facilities in many different countries. A company that is faced with the bleak picture of insolvency may be forced to make decisions on whether to seek protection under a number of different statutory structures.
In a recent post, we discussed the ongoing personal bankruptcy case In Re Adair, in which a a United States Trustee is seeking to have the court dismiss a Chapter 13 plan of an individual that is employed by a “non-plant-touching” ancillary marijuana business.
The U.S. Justice Department (“DOJ”) has said that an Oregon woman who is employed by a marijuana staffing agency cannot use bankruptcy protection because of her firm’s ties to the cannabis industry. The U.S. Trustee—a DOJ bankruptcy administrator—objected to confirmation of the debtor’s Chapter 13 plan and moved to dismiss on the grounds that her income is earned in violation of the federal Controlled Substances Act (“CSA”).
A 92-year-old landlord who leased a storefront to a marijuana dispensary will receive a new hearing after a court dismissed her bankruptcy caseon the grounds that acceptance of rent payments from the dispensary disqualified her from bankruptcy relief.
It is an unfortunate fact of life for those of us who represent lenders that our bills are paid by the people on the other side of the table — the borrowers. While this is the custom, it adds extra weight to the usual concern about legal fees, since it means the borrower is paying for attorneys whose jobs are, in large part, to oppose their interests.
After putting all of the specific deal points into a new contract, you are just about finished. All you have to do now is add in the “Miscellaneous” section with all of your boilerplate provisions like force majeure, choice of law and a few others. You have drafted so many contracts for so many years that you do not even know where some of the