“… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit on Sept. 3, 2019. In re Linn Energy, LLC, 2019 WL 4149481 (5th Cir. Sept. 3, 2019).

A debtor has the right to assume or reject any executory contract or unexpired lease through its bankruptcy, pursuant to the Bankruptcy Code. A trademark license is an executory contract that is subject to assumption or rejection if performance remains due from both parties to the contract. A debtor will reject a trademark license if it believes that there is no net benefit to the counterparty to the contract continuing to perform its obligations and thereby will repudiate any further performance of its obligations.

On Friday, August 23, 2019, the President signed into law the first major amendments to the United States Bankruptcy Code since 2005. These promise to change the legal landscape for creditors.

We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts. Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.

There is currently a split in authority on the issue of whether a trustee may recover from an immediate or mediate transferee if the recipient received proceeds from a fraudulent transfer but not the fraudulently transferred property itself.

Running a family-owned farm is not easy work under the best of economic circumstances, and it can be nearly impossible when times are tough. More than 30 years ago, during the mid-1980s, John Cougar Mellencamp’s mournful song “Rain on the Scarecrow” discussed the epidemic of family farm foreclosures hitting the American Heartland. Thankfully, the overall family farm economy is not at that crisis level today, but storm clouds are rumbling.

Consider these facts. A debtor in bankruptcy sued two parties for breach of contract. The debtor assigned its rights and interests in the cause of action to another entity. The defendants moved to dismiss the lawsuit, arguing that the court now lacked jurisdiction over the case. They asserted that the debtor’s assignment of the cause of action destroyed the bankruptcy court’s “related to” jurisdiction. Who wins?

Privacy issues implicate several Bankruptcy Code sections and Bankruptcy Rules. The debtor must also comply with non-bankruptcy rules concerning privacy to the extent that such rules are not inconsistent with the Bankruptcy Code. 28 U.S.C. § 959(b).

On August 9, 2019, in a unanimous decision (written by a former bankruptcy judge), the Eighth Circuit Court of Appeals affirmed the confirmation of the Peabody Energy Chapter 11 plan (“Plan”)¹ with a prominent backstopped rights offering component.

On August 23, 2019, President Donald J. Trump signed into law two bills amending the Bankruptcy Code: (i) the Family Farmer Relief Act of 2019 (“FFRA”); and (ii) the Small Business Reorganization Act of 2019 (“SBRA,” and with FFRA, the “Acts”).¹ Here are summaries of the Acts and important takeaways.

DEBT LIMIT INCREASE APPLICABLE TO AGRIBUSINESSES