On Feb. 25, The U.S. Supreme Court issued its decision in Rodriguez v. Federal Deposit Insurance Corp.,[1] a case involving a dispute between (1) the trustee in bankruptcy of a defunct bank holding company, and (2) the FDIC, as receiver for the bank holding company’s failed bank subsidiary, over the ownership of a federal income tax refund that was payable by the U.S. Department of the Treasury to the bank holding company as the parent of a consolidated tax filing group.

Kilpatrick Townsend’s Paul Rosenblatt and David Posner, bankruptcy partners, and Marc Lieberstein, a brand licensing and franchise partner, recently published an article in the New York State Bar Association Intellectual Property Section Bright

On December 6, 2019, the governor of New York signed into law the New York Uniform Voidable Transactions Act (“NYUVTA”). N.Y. DEBT. & CRED. §§ 270-281. Until the occurrence of that event, New York had adhered for 95 years to the Uniform Fraudulent Conveyance Act (“NYUFCA”) and had refrained from replacing it with the Uniform Fraudulent Transfer Act (“UFTA”), which was adopted by virtually all of the other states as a replacement of the Uniform Fraudulent Conveyance Act (“UFCA”).

Under title 11 of the United States Code (the “Bankruptcy Code”), generally speaking, payments by insolvent debtors to an unsecured or undersecured creditor on pre-existing indebtedness (so-called “antecedent debt”) made during the 90-day period before the debtor’s bankruptcy filing (the “Preference Period”) are vulnerable to claw-back in the debtor’s bankruptcy case as voidable preferences.

In an 8-1decision issued on May 20, the Supreme Court held that rejection of an executory trademark license agreement in a bankruptcy of the licensor is merely a breach, and not a termination or rescission, of the agreement. The licensee retains whatever rights it would have had upon a breach of the agreement prior to bankruptcy and can continue to use the trademarks pursuant to its contractual rights under applicable law. Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___, No. 17-1657 (May 20, 2019).

Background

What Is the "Rule in Gibbs"?

The rule in Gibbs is a long-established common law principle in which the Court of Appeal determined that a debt governed by English law cannot be discharged or compromised by a foreign insolvency proceeding(Anthony Gibbs and Sons v La Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399). The rule in Gibbs remains a fundamental tenet of English insolvency law.

Why Does the Rule in Gibbs Matter?

In a brief but significant opinion, the United States District Court for the District of Delaware reversed a decision by the United States Bankruptcy Court for the District of Delaware and allowed more than $30 million in unsecured, post-petition fees incurred by an indenture trustee ("Indenture Trustee").1 In reversing, the District Court relied upon a uniform body of Court of Appeals opinions issued on the subject.

On March 8, 2018, the Consumer Financial Protection Bureau (CFPB or Bureau) finalized certain changes to its mortgage servicing rules. The Bureau issued a final rule1 to provide mortgage servicers with more flexibility and certainty regarding requirements to communicate with borrowers under the CFPB’s 2016 mortgage servicing amendments. 

Background

On October 20, 2017, in In re MPM Silicones, LLC ("Momentive"), Nos. 15-1682, 15-1771, 15-1824, the Second Circuit Court of Appeals, considering the Supreme Court's opinion in Till v. SCS Credit Corp., 541 U.S. 465 (2004), adopted the Sixth Circuit's two-step approach to determining an appropriate cramdown interest rate that, in certain circumstances, results in the application of a market rate of interest. In doing so, the Second Circuit reversed the bankruptcy and district court holdings on the cramdown interest rate issue.

Kilpatrick Townsend partner David Posner spoke at a recent New York State Bar Association event where he and other panelists discussed the topic “Around the Edges of IP: Complexities of IP in Bankruptcy.”

Mr. Posner provides four key takeaways from his presentation — “Recent Trends Involving Intellectual Property in Bankruptcy:”