Decision is a Win for Trademark Licensees

Taggart v. Lorenzen, 587 U.S. (2019).

The U.S. Supreme Court has established an objective standard for determining whether a creditor should be held in civil contempt when the creditor attempts to collect a debt subject to a bankruptcy discharge order.

Case Background

The intersection of Chapter 13 bankruptcy and escrow accounts is complicated and confusing. Since 2011, various bankruptcy rule and form changes have occurred in an effort to eliminate perceived problems with Chapter 13 escrow issues. This article explains how one of these changes – a revised version of a proof of claim attachment form – actually added to the confusion instead of alleviating it, and how that confusion can be costly to servicers.

Official Form B410A

Creditors and credit furnishers often find properly reporting a payment status to Credit Reporting Agencies (CRAs) during, and after, bankruptcy a challenge. The recent Report of the American Bankruptcy Institute on Consumer Bankruptcy recognizes those challenges, and looks to convene a forum to provide better guidance and clarity as to proper credit reporting once a borrower goes into bankruptcy.

Challenges

In Mission Product Holdings Inc. v. Tempnology LLC,1 the Supreme Court, in an 8-to-1 decision, held that bankrupt trademark owners cannot use bankruptcy law to unilaterally revoke a trademark license. The Court summarized the question at issue and held that:

Last year, we discussed a decision by Judge Sean Lane of the United States Bankruptcy Court for the Southern District of New York concerning section 109(a) of the Bankruptcy Code.[1] In a recent cross-border case, In re PT Bakrie Telecom Tbk,

For creditors in bankruptcy proceedings, as with many things in life, priority is everything.  It is often the case that a person filing for bankruptcy has insufficient funds to pay in full all of his or her creditors.  As a result, creditors try to establish their priority so they are more likely to get paid before the money runs out.  Section 507 of the Bankruptcy Code provides rules explaining the order in which expenses and claims have priority in bankruptcy.  Notably, Section 507(a)(8) provides the IRS with priority treatment in bankruptcy with respect to claims for

On May 20, 2019, the United States Supreme Court issued its decision in Mission Product Holdings Inc. v. Tempnology LLC (In re Tempnology) ("Tempnology"), 587 U.S. ___, 2019 WL 2166392 (U.S. May 20, 2019), which finally resolved an issue that has created confusion and uncertainty for more than 30 years regarding the consequences flowing from a debtor licensor's rejection of a trademark license in bankruptcy.

United States District Court, W.D. Pennsylvania, May 30, 2019

PENNSYLVANIA – The defendant Johnson & Johnson (J&J), in a topic that has been extensively covered by the Asbestos Case Tracker, indicated in its notice of removal that this case is one of many in the United States which involve claims concerning personal injuries and deaths allegedly caused by J&J’s cosmetic talc. J&J’s motion further indicates that the “sole supplier” of the talc which the defendant used in its product, filed for bankruptcy under Chapter 11.

In Mission Product Holdings, the Supreme Court Endorses “Rejection-as-Breach” Rule and Interprets Broadly the Contract Rights that Survive Rejection