On Oct. 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion with significant ramifications for any holder of a patent license that operates internationally. At issue was an important protection afforded to patent licensees under the United States Bankruptcy Code - § 365(n).

The past eighteen months have seen a marked increase in the use of the Company Voluntary Arrangement (“CVA”) by retailers to reduce their lease liabilities and win the release of onerous parent company guarantees, with several high street names going through the process. Although this practice received cautious support from landlords, real concern continues to be voiced over the practice of “guarantee stripping”.

In a blow to administrators that will surely impact on the timings of any administration, most particularly those involving a large property portfolio, HHJ Purle, sitting in the High Court, has handed down a decision that will have ramifications potentially as serious as those of Re Trident Fashions for administrators in considering how long to remain in office, or indeed whether to accept an appointment at all.

The Bankruptcy Abuse and Consumer Protection Act of 2005 (BAPCPA) purported to eliminate the ability of chapter 11 debtors in possession to pay bonuses to management through Key Employee Retention Plans. However, in recognition of the fact that a real need often exists to incentivize key employees to remain with a reorganizing or liquidating business, bankruptcy courts have approved incentive plans providing for payments to insiders and other employees. Such plans must be carefully crafted to avoid the restrictions on retention bonuses post-BAPCPA.

As a result of the meltdown of the financial markets, lenders are severely constricting new credit facilities and refusing to renew expiring facilities. The Bankruptcy Code's chapter 11 provides a powerful mechanism for an otherwise viable business to restructure and extend its outstanding debt and in many cases, reduce interest rates on loan facilities.