To Lease or Not to Lease

In Corporate Claims Management, Inc. v. Shapier, et al. (In re Patriot National Inc.), Adv. Pro. No. 18-50307 (Bankr. D. Del August 8, 2018), the Delaware Bankruptcy Court found that alleged misappropriation of trade secrets could constitute a violation of the automatic stay under section 362 of the Bankruptcy Code and be subject to turnover under section 542 of the Bankruptcy Code. 

InLaMonica v. CEVA Group PLC, et al. (In re CIL Limited), Adversary No. 14-02442 (Bankr. S.D.N.Y June 15, 2018), the Bankruptcy Court for the Southern District of New York was tasked with deciding whether the “collapsing doctrine” could be used to determine the situs of a fraudulent transfer, which was part of an international, multi-step transaction occurring inside and outside of the United States. 

In Topfer v. Topfer (In re Topfer), Case No. 5-18-ap-00066 RNO (M.D. Pa. July 25, 2018), the Bankruptcy Court for the Middle District of Pennsylvania remanded a three-and half year old divorce proceeding that had been removed to bankruptcy court. But, the remand became more complicated than it needed to be.

The chapter 7 debtor had removed the divorce action immediately after filing for chapter 7 bankruptcy. Shortly after removal, the non-debtor spouse moved to remand the case on mandatory abstention and permissive abstention grounds.

On June 20, 2018, Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware sustained an objection to a proof of claim filed by a postpetition debt purchaser premised on anti-assignment clauses contained in transferred promissory notes. In re Woodbridge Group of Companies, LLC, et al., No. 17-12560, at *14 (jointly administered) (Bankr. D. Del. Jun. 20, 2018).

Summary

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).

Banks regularly enter into commercial relationships with their customers such as opening new depository accounts.  These relationships are often contractual in nature and seem relatively straightforward until an unexpected incident occurs that causes the relationship to unravel. What then are the duties owed by each party to each another?  The default rule seems to be that the terms and conditions that the parties agreed to at first govern the parties’ actions throughout their banking relationship.

The term “golden shares” is often referred to equity interests held by a specific party—commonly a lender or investor—that authorize such party to block or prevent a corporate entity from filing bankruptcy. Such shares are often negotiated by a party that wants to ensure that its consent is obtained before any bankruptcy is commenced. Without such consent, the party holding the golden shares can seek to dismiss to a corporate bankruptcy filing by based on a lack of corporate authority.

The Bankruptcy Code often instructs a trustee or debtor to perform an act or make an election within a certain time. Sometimes the relevant provisions are intended to benefit a party in interest who is affected by a debtor’s or trustee’s action or election. Unfortunately, some of the provisions that prescribe a trustee or debtor to act fail to provide a remedy to the affected party in interest in the event the trustee or debtor does not act in compliance with the Code.