In Coosemans Miami v. Arthur (In re Arthur), the Bankruptcy Court for the Southern District of Florida held last week that individuals in control of a PACA trust may still receive a bankruptcy discharge of debts arising from their breach of such PACA trust. A link to the opinion is here.
Happy 2018! We at The Bankruptcy Cave have been itching to write about the Cherry Growers Chapter 11 case - which really is ground-breaking - but the holidays, life, and yes, work for clients too, all just got in the way. But with each passing week, the case stayed on our minds. So now that time permits, here is the writeup - and see below for the remarkable significance of the case.
We at the Bankruptcy Cave are not very surprised by the ruling yesterday in Czyzewski v. Jevic Holding Corp. The Supreme Court in Jevic reviewed a Bankruptcy Court’s decision to approve a settlement (with a distribution of proceeds that contravened the Bankruptcy Code’s priority scheme) in conjunction with dismissing the bankruptcy case of the Chapter 11 debtor Jevic Holding Corp.
Most restructuring practitioners are aware, either vaguely or through punishing experience, of the power of PACA creditors. PACA (or the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq. for those who hate brevity) requires that buyers of produce hold such produce – and their proceeds – in trust for the benefit of produce sellers.
Editor’s Note: Here at The Bankruptcy Cave, we love insolvency stuff; we eat it for breakfast and dream about it at night. (We are not kidding.) Sometimes that includes credit-related litigation, and so we keep our pre-trial, trial, and appellate skills honed. To that end, here is a very helpful cheat sheet we prepared and which we bring with us to every deposition, just in case. (Your author Leah even got to enjoy a no-show deposition in Chicago last year; she created a perfect record using the below.)
Have you ever had to press garlic for a recipe? Or put together a Swedish bookshelf, purchased from a Swedish superstore? Yes, you have – and you may have succeeded, so long as you had a garlic press, or the bag of special Swedish tools respectively. But what if you don’t? Yikes.
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.
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.