Eurosail’s journey has come to an end: the Supreme Court rejects the “point of no return” test, returns to balance sheet basics.

John Houghton, European Head of Restructuring and Co-Global Chair of Bankruptcy and Restructuring remarks:

Companies with certain specific connections to Hong Kong are increasingly likely to fall under Hong Kong jurisdiction and Hong Kong’s Companies Ordinance. Both creditors and debtors will benefit from the clarity provided by the recent judgment in the case Re Pioneer Iron and Steel Group. Hong Kong’s Companies Ordinance expressly provides for the possibility of petitioning to liquidate, or wind-up, companies incorporated outside of Hong Kong.

On April 1, 2013, Judge Christopher Klein, Chief Judge of the United States Bankruptcy Court for the Eastern District of California, ruled that the City of Stockton, California, could proceed with its chapter 9 bankruptcy filing. Judge Klein’s decision affirmed Stockton’s status as the largest US city (population 300,000) to have successfully sought bankruptcy protection and proceed with bankruptcy.1 Judge Klein’s comments on the record may also signal that the resolution of Stockton’s chapter 9 will require the impairment of the city’s pension obligations.

In a ruling on February 28, 2013, the U.S. District Court for the Central District of Illinois reversed the February 29, 2012 order of the U.S. Bankruptcy Court for the Central District of Illinois allowing a bankruptcy trustee to avoid an Illinois mortgage as to unsecured creditors for lack of “constructive notice” because the mortgage did not expressly state the maturity date of and interest rate on the underlying debt (In Re Crane, Case 12-2146, U.S. Dist. Ct., C.D. IL, February 28, 2013).

On January 31, 2013, the Bankruptcy Court for the District of Delaware issued an opinion that approved the confirmation of the proposed plan in In re Indianapolis Downs, LLC.

On November 27, 2012, Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York issued an opinion in In re Patriot Coal Corporation1 transferring the chapter 11 proceedings pending before her to the Eastern District of Missouri.

Introduction

Earlier this year we reported on a Michigan trial court opinion, issued by Judge Edward R. Post of the Ottawa County Circuit Court in First Financial Bank, N.A. v. Scott T. Bosgraaf, et al., Case No. 11-02488 (click here to read), concluding that a court-appointed receiver has the power to sell mortgaged commercial real property free and clear of statutory mortgage foreclosure redemption rights.

Recent bankruptcy appellate rulings have addressed the issue of what rights a trademark licensee has after a debtor-licensor rejects its trademark license in bankruptcy.

In light of the current uncertainty surrounding the rights of trademark licensees when a debtor-licensor seeks to reject the underlying license agreements in bankruptcy, licensees may wish to consider strategies to protect their rights.