Our February 22 post reported that the Franchise Services of North America, Inc. decision of Bankruptcy Judge Edward Ellington of the Southern District of Mississippi dismissing a Chapter 11 petition because a holder of “golden share” stock had not approved the petition as required by the debtor’s charter was going directly to the U.S. Court of Appeals for the Fifth Circuit on an expedited basis. It is the first case concerning the merits of contractual or structural bankruptcy-remoteness in my memory to reach a Court of Appeals since the adoption of the Bankruptcy Code in 1978.

Back in the day--say, the last two decades of the twentieth century--we bankruptcy lawyers took it largely on faith that the right structural and contractual provisions purporting to confer bankruptcy-remoteness[1] were enforceable and likely to be successful in preventing an entity from becoming, voluntarily or involuntarily, a debtor under the Bankruptcy Code.

The Slovak Ministry of Justice was very busy last year, and the recent amendment to the Commercial Code introduces a number of provisions that are aimed at fixing local malpractice related to mergers and liquidation of companies, use of “straw men” as executives and the impact of bad decisions of shareholders on the local affiliates.

In a previous post, we covered the topic of increased liability of executives for not filing the petition for bankruptcy. However, the Ministry of Justice did not stop just there.

Corporate Veil Pierced

A long-running issue concerning the treatment of trademark licenses in bankruptcy has seen a new milestone with the January 12 decision of the First Circuit in Mission Product Holdings, Inc. v. Tempnology, LLC.[1] The issue was implicit in the Bankruptcy Code from the time of its adoption in 1978 and flared into the open with the decision of the Fourth Circuit in Lubrizol Enterprises, Inc. v.

As of 1 January 2018, those who are obliged to file a petition for declaration of bankruptcy of a company will face stricter liability in Slovakia. This could result in them being required to pay a fine/damages and can even result in their disqualification from sitting on boards of Slovak companies.

When the fallout from failed intellectual-property litigation collides with bankruptcy, the complexities may be dizzying enough, but when the emerging practices and imperatives of litigation financing are imposed on those complexities, the situation might be likened to three-dimensional chess. But in the court of one veteran bankruptcy judge, the complexities were penetrated to reveal that elementary errors and oversights can have decisive effects.

Much has already been written about the proposal for the “Second Chance” directive (“Proposal“) published in November 2016 which is still being debated by the EU bodies – and rightly so. Harmonisation of insolvency law across the EU is needed as one in four insolvency proceedings is a cross-border insolvency and creditors need to know what to expect in other EU countries and that the courts and practitioners cooperate in an efficient way.

It is a unique characteristic of debt restructuring under Chapter 11 of the Bankruptcy Code that a majority of a class of creditors can accept a modification of the terms of the debts owed to the class members, as provided in a plan of reorganization, and thereby bind non-accepting class members.[1] The ordinary route to confirming a Chapter 11 plan is to obtain its acceptance by a majority of every impaired class of creditors and equity hold

Avoiding a fraudulent transfer to the Internal Revenue Service (“IRS”) in bankruptcy has become easier, or at least clearer, as a result of a recent unanimous decision by a panel of the Court of Appeals for the Ninth Circuit, Zazzali v. United States (In re DBSI, Inc.), 2017 U.S. App. LEXIS 16817 (9th Cir. Aug. 31, 2017).

The long-running litigation spawned by the leveraged buyout of Tribune Company, which closed in December 2007, and the subsequent bankruptcy case commenced on December 8, 2008[1] has challenged the maxim that “there’s nothing new under the sun” even for this writer with four decades of bankruptcy practice behind him.