In In re Squirrels Rsch. Labs, LLC, No. 21-61491, 2022 WL 1310173, at *1 (Bankr. N.D. Ohio Apr. 29, 2022), the United States Bankruptcy Court for the Northern District of Ohio recently addressed whether post-sale of the debtors’ assets, a creditor could conduct discovery to investigate the extent of a secured creditor’s liens in order to amend the distribution of the sale proceeds. Under the facts of this case, the bankruptcy court denied the creditor’s request.

The Bankruptcy Protector

The Bankruptcy Protector

In the case of In re Ricky L. Moore (19-01228), the United States Bankruptcy Court for the Northern District of Iowa taught an important lesson in the context of Chapter 12 bankruptcy cases[1]: do not rely on repeated assurances of payment from a friendly debtor in lieu of filing your bankruptcy proof of claim.

The Bankruptcy Protector

Friend or Foe?

In bankruptcy, one of the “powers” granted to a trustee is the ability to undo previously completed transactions in order to facilitate payments to creditors. However, the Bankruptcy Code prevents a trustee from unwinding certain types of transactions. The safe harbor provision of 11 U.S.C. § 546(e) protects financial institutions performing securities transactions from having to disgorge payments initially made by a now bankrupt company.

When a dealership files for bankruptcy, a manufacturer will be faced with critical decisions regarding the proposed restructuring and the treatment of its dealer agreement. The bankruptcy code provides debtors with certain rights in order to maximize the recovery for creditors. Manufacturers must be cognizant of these rights in any dealer bankruptcy.

In LVNV Funding, LLC v. Harling, 852 F.3d 367 (4th Cir. 2017), as amended (Apr. 6, 2017), the Fourth Circuit addressed whether claim objections filed after a Chapter 13 plan had been confirmed are barred by the res judicata effect of the confirmed plan. Here, LVNV Funding filed unsecured proofs of claim that it conceded were barred by the statute of limitations.

The Bankruptcy Protector

On Monday, March 10, 2014, the companies that own and operate the Sbarro pizza chain, Sbarro LLC and 33 affiliates, filed for bankruptcy reorganization under Chapter 11 of the federal Bankruptcy Code.  The Sbarro companies operate 217 restaurants in the U.S. and there are 582 franchised restaurants, 176 in the U.S. and 406 at international locations.

On October 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), which limits a debtor's right to reject intellectual property licenses in bankruptcy and generally provides that, in the event of a rejection, the licensee may elect either to treat the license as terminated or retain its rights for the duration of the license.