In Salyersville Nat’l Bank v. Bailey (In re Bailey), 664 F.3d 1026 (6th Cir.

Trademark licensees won a victory on July 9, 2012, when the Court of Appeals for the Seventh Circuit issued its decision in Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC. The opinion holds that the rights of a trademark licensee do not automatically terminate when its license agreement is rejected by a trademark owner in bankruptcy. Nevertheless, the significance of that victory will only become clarified if and when other courts, including possibly the Supreme Court, and Congress address the issues raised in Sunbeam.  

Whether post-death creditor protection is available to inherited IRAs under the 2005 Bankruptcy Act has been the subject of a number of cases decided in the last several years. The argument made by bankruptcy trustees is that, on the death of the IRA owner, the IRA ceases to be “retirement funds” as it is not the retirement funds of the beneficiary. Consequently, the bankruptcy trustees argue that the inherited IRA ceases to have the protection afforded to IRAs under the Bankruptcy Code.

If you are one of the lucky product manufacturers who weathered the recent economic downturn well and are looking to buy assets from those who did not survive…beware!

The absolute priority rule of Section 1129(b) of the Bankruptcy Code is a fundamental creditor protection in a Chapter 11 bankruptcy case. In general terms, the rule provides that if a class of unsecured creditors rejects a debtor’s reorganization plan and is not paid in full, junior creditors and equity interestholders may not receive or retain any property under the plan. The rule thus implements the general state-law principle that creditors are entitled to payment before shareholders, unless creditors agree to a different result.

Code Section 409A is, in part, a response to perceived deferred compensation abuses at companies like Enron and WorldCom. The story of Code Section 409A’s six month delay provision is inextricably tied to the Enron and WorldCom bankruptcies.

Following the failure of over 400 financial institutions since the beginning of 2008, the FDIC has clarified its expectations with respect to collection and retention of bank documents by directors and officers of troubled or failing financial institutions for the purpose of explaining or defending their conduct.

The United States Bankruptcy Court for the Northern District of Ohio recently held that under Ohio law, the homestead exemption set forth in Ohio Rev. Code Ann. § 2329.66 applies to contiguous parcels of land only if those parcels are used for a single purpose as the debtor’s homestead.  In re Whitney, 459 B.R. 72 (Bankr. N.D. Ohio 2011).

Turnaround Management Association

The United States is about to enter year five of what has been aptly deemed “The Great Recession.” Bankruptcy advising is a cyclical business, and after a dearth of work in the heady financial years of the mid-2000s, expectations were high that in the downturn bankruptcy work would be abundant and steady.

On December 29, 2011, the FDIC filed suit against seven former directors of the Bank of Asheville in the Western District of North Carolina seeking to recover over $6.8 million in losses suffered by the bank prior to receivership.  All of the directors named as defendants were members of the bank’s Loan Committee, the committee responsible “for the amplification, implementation and administration of the loan policy” and “management of the lending function”.  The Complaint cites 30 specific commercial real estate and business loans approved by the defendants between June 26, 2007 a