One day, you get a notice in the mail that an important customer has filed chapter 11. Your customer recently paid $250,000 on invoices that were delinquent for several months and still owes you $500,000. The customer, a brick-and-mortar store, sent form letters to its vendors expressing optimism that the chapter 11 process will allow the store to continue to operate while it locates a buyer which will continue to operate the store.
Following an expedited trial, the High Court has rejected an application brought by a group of landlords known as the Combined Property Control Group (“CPC”) to challenge the company voluntary arrangement (“CVA”) proposed by Debenhams Retail Limited (“Debenhams”).
CPC challenged the CVA on five grounds. The judge in the case, Mr Justice Norris, held that four of the five grounds failed and directed certain “Forfeiture Restraint Provisions” be removed from the CVA as a result of the fifth.
The CVA challenge
The landlords’ claim against the Debenhams CVA was put forward on five grounds:
1. Future rent is not a “debt” and so the landlords are not creditors, such that the CVA cannot bind them
REJECTED: The definition of “debt” is broad enough to include pecuniary contingent liabilities, such as future rent.
2. A CVA cannot operate to reduce rent payable under leases: it is automatically unfairly prejudicial
On August 23, 2019, President Donald J. Trump signed into law two bills amending the Bankruptcy Code: (i) the Family Farmer Relief Act of 2019 (“FFRA”); and (ii) the Small Business Reorganization Act of 2019 (“SBRA,” and with FFRA, the “Acts”).1 Here are summaries of the Acts and important takeaways.
DEBT LIMIT INCREASE APPLICABLE TO AGRIBUSINESSES
Less than four years after the last fiscal amnesty, on 5 August, the Romanian government published a fiscal amnesty ordinance (No. 6/2019) that sets the framework for restructuring the debt of taxpayers with outstanding tax obligations and for the cancellation of accessory obligations.
On 13 June 2019 the new Insolvency Law(DIFC Law No. 1 of 2019) and the associated Insolvency Regulations 2019 (the “Law”) came in to effect in the Dubai International Finance Centre (“DIFC”) repealing and replacing the DIFC’s Insolvency Law of 2009 (the “Old Law”).
Trademark licensors and licensees, as well as their stakeholders (including lenders), should heed the U.S. Supreme Court’s decision in Mission Product Holdings, Inc. v. Tempnology, LLC n/k/a Old Cold, LLC, No. 17-1657. The Justices resolved a long-standing question arising from the intersection of bankruptcy and trademark law: whether a debtor/licensor’s rejection of a trademark license terminates the licensee’s right to use a trademark after rejection.
Trademark licensors and licensees, as well as their stakeholders (including lenders), should heed the U.S. Supreme Court’s decision in Mission Product Holdings, Inc. v. Tempnology, LLC n/k/a Old Cold, LLC, No. 17-1657. The Justices resolved a long-standing question arising from the intersection of bankruptcy and trademark law: whether a debtor/licensor’s rejection of a trademark license terminates the licensee’s right to use a trademark after rejection.
- It is common for the ownership and operation of a hotel to be separated and this should be reflected in a lender's security package.
- In the event of financial distress, a review of the hotel holding and operating structure and security package is essential to identify pre-enforcement and enforcement options available to the lender.
- The practicalities of enforcement need to be considered alongside the legal options, including the position in relation to existing licences and short term funding requirements, as this will inform the strategy for how the a
In a case of first impression, the Fifth Circuit held that a defendant is not required to plead as an affirmative defense under the Real Estate Settlement Procedures Act that it had complied with Section 1024.41 of the Code of Federal Regulations by responding properly to a borrower’s loss mitigation application. Germain v. US Bank National Association, — F. 3d — (2019 WL 146705, April 3, 2019). It affirmed the dismissal of the borrower’s RESPA claim on a summary judgment motion, based on the following facts.