The economic fallout of COVID-19 is widespread and immense, and few businesses remain unscathed by fundamental changes to consumer spending. No industry may be more affected than traditional department stores and brick and mortar retailers. Pressures on these businesses are nothing new, and companies across the retail spectrum have worked in recent years, with varying degrees of success, to adapt to the rise of e-commerce and changing consumer preferences.

On August 1, 2019 the U.S. Senate passed the Family Farmer Relief Act of 2019, which more than doubled the debt limit for “family farmers” qualifying for relief under Chapter 12 of the U.S. Bankruptcy Code to $10,000,000. The House of Representatives previously passed the same legislation on July 29, 2019; the legislation will now proceed to the White House for the President’s signature.

Executive Summary

Last week, the Supreme Court (the “Court”) ruled a debtor in bankruptcy cannot use the Bankruptcy Code to cut off a licensee’s rights under a license to use the debtor’s trademarks. This ruling resolves a Circuit split and brings the treatment of trademark licenses from a bankrupt debtor in line with patent and copyright licenses, which are protected statutorily by Bankruptcy Code section 365(n).

In a recent opinion, the Second Circuit Court of Appeals held that a seller licensed under the Perishable Agricultural Commodities Act (“PACA”) could not entirely setoff payables owed to a bankrupt PACA merchant against receivables owed by the debtor. The ruling is a reminder to PACA-regulated parties that otherwise common operational practices such as setoffs may not be recognized and enforceable in bankruptcy or in PACA-regulated transactions.

A U.S. Bankruptcy Court (the “Bankruptcy Court”) recently enjoined a Hong Kong-based investor from exercising its shareholder purchase rights in an Asian joint venture.[1] The Bankruptcy Court’s order also prevents the investor from proceeding with litigation to enforce its rights in a Hong Kong court. Neither of the joint venture partners, or the joint venture itself, are debtors in a domestic or foreign insolvency proceeding. Nevertheless, the Bankruptcy Court ruled that injunctive relief was warranted because the investor’s actions were disrupting a sale process for the U.S.

On February 27, 2018, the Supreme Court issued a significant decision that will increase the exposure of debt and equity investors that receive payments from all kinds of highly leveraged transactions, including leveraged buy-outs and dividend recapitalizations. The unanimous opinion in Merit Management Group, LP v.

In today’s chapter 11 practice, third party releases are ubiquitous. A staple of the largest and most complex cases for years, plan provisions releasing and enjoining claims against non-debtors, particularly officers and directors, are now common place in most business reorganizations. While case law permits a bankruptcy court to enjoin claims against non-debtors in limited, fact-specific circumstances, plan proponents frequently achieve far broader releases by creditor consent. In re SunEdison, Inc.

In a recent opinion, the U.S. Bankruptcy Court for the District of Oregon reminds all finance lawyers (and participants trying to document a finance transaction without legal assistance) that recording an “assignment” of a deed of trust is not always sufficient to perfect an interest in the real property.