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.

The long-discussed amendments to the Czech Insolvency Act entered into force on 1 July 2017.

These aim primarily to strengthen the transparency of insolvency proceedings; reduce paperwork in the insolvency courts; and change the system of allocation of insolvency cases in the area of debt relief.

The following highlights the most fundamental changes introduced last month.

Allocating insolvency cases

On May 3, 2017, the Financial Oversight and Management Board for Puerto Rico filed a voluntary petition for relief on behalf of Puerto Rico in federal court there. The filing required the Chief Justice of the United States to designate a district court judge to conduct the case. On May 5, Chief Justice Roberts appointed District Judge Laura Taylor Swain of the Southern District of New York. Judge Swain was a bankruptcy judge in the Eastern District of New York before joining the district court in 2000.

Key Points

Key points

Yet another major amendment to the Insolvency Act has been recently approved by the Czech government and passed to the Chamber of Deputies. The amendment is expected to become legally binding at the beginning of 2017. However, this timing does not allow for any potential obstacles or prolonged proceedings, which are common features of the Czech Parliamentary process.

Revising existing methods for the allocation of insolvency cases

Debt relief procedure

The U.S. Court of Appeals for the Seventh Circuit in Chicago has issued a decision with significant implications for licensees of trademarks whose licensors become debtors in bankruptcy. In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, the Court considered whether rejection of a trademark license in bankruptcy deprives the licensee of the right to use the licensed mark.¹ Disagreeing with the holding of the Court of Appeals for the Fourth Circuit in Lubrizol Enterprises, Inc. v.

The Trustee overseeing the liquidation under the Securities Investor Protection Act (“SIPA”) of Lehman Brothers Inc. (“Lehman”) in the U.S. and the Joint Administrator of Lehman Brothers International (Europe) (“LB Europe”) in the U.K. have reached an agreement in principle to resolve $38 billion in asserted claims among Lehman, LB Europe and subsidiaries and affiliates. The agreement is subject to definitive documentation and approval by the Bankruptcy Court in New York and the English High Court. The parties set December 15, 2012 as the deadline to reach a final agreement.

In the Summer 2009 issue of the Legal Canvas, we wrote about the wisdom of filing a UCC financing statement when art work is consigned to a gallery. Specifically, we said that the filing of a financing statement that reflects the consignor’s interest in the work provides protection against the gallery’s creditors. Financing statements take no time to prepare and cost less than $50 to file.

It could be money well spent.

U.S. bankruptcy law permits debtors-in-possession and trustees to sell assets free and clear of claims, liens and other interests. But a federal judge in New York ruled recently that a purchaser does not necessarily buy free and clear when a product manufactured pre-bankruptcy causes injury after a sale closes. Morgan Olson L.L.C. v. Frederico (In re Grumman Olson Indus., Inc.), No. 11 Civ. 2291, 2012 U.S. Dist. LEXIS 44314 (S.D.N.Y. Mar. 29, 2012) (JPO). In this situation, the purchaser can remain liable for injuries caused by the asset purchased from the debtor.