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The Ninth Circuit Vacates Bankruptcy Court’s Designation Order, Holding That Purchasing a Subset of Available Claims to Block a Plan, Absent An Ulterior Motive, Does Not Constitute Bad Faith

Summary

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Ninth Circuit
Connecticut Bankruptcy Court Holds That Trademark Licensee Does Not Automatically Lose the Right to Use Trademarks When Debtor-Licensor Rejects License, Siding with Seventh Circuit in Circuit Split

The United States Bankruptcy Court for the District of Connecticut recently examined a question at the heart of an existing circuit split regarding the consequences of trademark license rejection in bankruptcy: can a trademark licensee retain the use of a licensed trademark post-rejection? In re SIMA International, Inc., 2018 WL 2293705 (Bankr. D. Conn. May 17, 2018).

USA, Insolvency & Restructuring, Litigation, Trademarks, Paul, Weiss, Rifkind, Wharton & Garrison LLP
Supreme Court Holds That Presence of Financial Conduits Does Not Trigger “Safe Harbor” Protection for Securities-Related Transfers Under Section 546(e) of the Bankruptcy Code

On February 27, 2018, the United States Supreme Court resolved a circuit split regarding the proper application of the safe harbor set forth in section 546(e) of the Bankruptcy Code, a provision that prohibits the avoidance of a transfer if the transfer was made in connection with a securities contract and made by or to (or for the benefit of) certain qualified entities, including a financial institution.

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Supreme Court of the United States
Ninth Circuit Holds That Joint Plan Covering Multiple Debtors Must Be Approved by Only One Impaired Class Per Plan, Not One Impaired Class Per Debtor

The Court of Appeals for the Ninth Circuit recently held that section 1129(a)(10) of the Bankruptcy Code – a provision which, in effect, prohibits confirmation of a plan unless the plan has been accepted by at least one impaired class of claims – applies on “per plan” rather than a “per debtor” basis, even when the plan at issue covers multiple debtors. In re Transwest Resort Properties, Inc., 2018 WL 615431 (9th Cir. Jan. 25, 2018). The Court is the first circuit court to address the issue.

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Ninth Circuit
Transfers of shares of Cayman companies in liquidation

Over the past two or three years, we have seen an increasing number of cases where a client holds and wishes to sell or transfer shares in a Cayman Islands company which is in liquidation, or is seeking to purchase shares in such a company from another party.  In those circumstances, the transfer of the shares would be void absent the validation of the Grand Court of the Cayman Islands, as a result of section 99 of the Companies Law (2013 Revision) ("Section 99").  Section 99 is in the following terms:

Cayman Islands, Insolvency & Restructuring, Private Client & Offshore Services, Ogier, Share (finance), Liquidation