In this week's Alabama Law Weekly update, we report on two decisions. The first case is from the Alabama Supreme Court and considers whether an employee, who was a significant contributor in the creation of intellectual property patented by his employer, is entitled to a portion of the income that the employer received in a subsequent stock sale. The second decision is from the Eleventh Circuit Court of Appeals and considers the factors for bankruptcy courts to analyze when approving releases of claims against non-debtors, such as officers and directors of reorganized entities.
“I can [resolve] that” – Sam the Onion Man, Holes (as modified)
In a recent decision, In re Black Diamond Mining Company, LLC,[1] the United States Court of Appeals for the Sixth Circuit held that a netting provision contained in a contract was enforceable against an assignee from one of the parties to the contract. The decision is sound, and is worth noting by parties to contracts and by those parties that succeed to their rights
E ven well-intentioned people run into financial difficulty. Unfortunately, falling behind on one’s taxes often leads to a downward spiral, and it is not uncommon for a taxpayer who cannot pay her tax obligations to decide not to file a return. Not only does such a failure to file expose the taxpayer to additional penalties and criminal liability, but it may have devastating ramifications if she subsequently files for bankruptcy.
Since 2008, many individuals have been looking for investments outside of bonds or the stock market that provide guaranteed payments at higher rates of return. Some have turned to investing in precious metals, while others have looked to investing in life insurance policies. Many are familiar with the word “viaticals” that became well known during the 1980’s, when people began purchasing life insurance policies on the lives of people with chronic or terminal illnesses, such as AIDS. With viaticals, the insured usually had a limited life expectancy and the owner of the viat
In a little-noticed November opinion, the Seventh Circuit greatly expanded the ability of a bankruptcy trustee to avoid a security interest for documentation errors under section 544(a)(1) of the Bankruptcy Code. See State Bank of Toulon v. Covey (In re Duckworth), 776 F.3d 453 (7th Cir. 2014).
The Eleventh Circuit’s recent opinion in SE Property Holdings, LLC v. Seaside Engineering & Surveying, Inc. (In re Seaside Engineering & Surveying, Inc.), No. 14-11590 (11th Cir. March 12, 2015), clarifies the circuit’s stance on the authority of bankruptcy courts to issue nonconsensual, non-debtor releases or bar orders and the circumstances under which such bar orders might be appropriate. In addition, the court gave a broad reading of what it means for a plan to have been proposed in good faith.
On March 16, 2015, the Spanish subsidiary of Banca Privada d’Andorra, Banco de Madrid, sought bankruptcy protection in the midst of a run on the bank by depositors. The run and bankruptcy were the result of FinCEN’s March 10, 2015, announcement that it would bar U.S. banks from providing correspondent banking services to Banca Privada d’Andorra or any bank that processes transactions for Banca Privada d’Andorra.
On March 2, 2015, the Iowa District Court for Polk County entered a Final Order of Liquidation against CoOportunity Health, Inc. ("CoOportunity") after previously placing CoOportunity under a rehabilitation order.