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In the aftermath of recent municipal bankruptcies in which issuers proposed and/or implemented bankruptcy plans involving partial discharges of the issuer’s payment obligation on insured bonds, there has been increased focus on whether municipal bond interest paid by a bond insurer after the bankruptcy plan’s effective date continues to be tax-exempt.

The Bankruptcy Code generally permits intellectual property licensees to continue using licensed property despite a licensor’s bankruptcy filing. However, because the “intellectual property” definition in the Bankruptcy Code does not include “trademarks,” courts have varied on whether trademark licensees receive similar protection. A New Jersey bankruptcy court recently grappled with this issue, concluding that trademark licensees may retain their trademark rights.

The Seventh Circuit Court of Appeal’s recent decision in State Bank of Toulon v. Covey (In re Duckworth)Case Nos. 14-1561 and 1650 (7th Cir. November 21, 2014) illustrates how a banker’s seemingly minor mistake in drafting secured loan documents granting a lien to secure a non-existent obligation can lead to avoidance of a lender’s security interest by the borrower’s bankruptcy trustee. 

Pennsylvania’s legislature recently approved House Bill No. 1773, an overhaul to its Municipalities Financial Recovery Act, commonly known as “Act 47.”  HB 1773 was signed into law by Governor Tom Corbett on October 31, 2014.

Directors of an insolvent corporation face a host of difficult questions. Should they wind up operations or file for bankruptcy to preserve assets for creditors, or chart a riskier course that could lead the company back to profitability and possibly create value for shareholders? If they choose the riskier course and it fails, will the directors be potentially liable to creditors? The opinion issued by Vice Chancellor Laster of the Delaware Court of Chancery earlier this month in Quadrant Structured Products Co., Ltd. v. Vertin, C.A. No. 6990-VCL, slip op., 2014 Del. Ch.

On September 9, 2014, the Bankruptcy Court for the Southern District of New York held that certain senior lenders were not entitled to the benefit of their indentures’ make-whole premiums, because they had voluntarily accelerated their notes.  As we have reminded our readers several times, careful drafting of what may seem like basic boilerplate provisions is important.  Seemingly benign stand-alone provisions may have unintended consequences when linked together in a single agreement.

In a recent bench decision in In re MPM Silicones, LLC et al., Case No. 14-22503-RDD (Bankr. S.D.N.Y. August 26, 2014), the Bankruptcy Court considered bondholders’ right to recover make-whole premiums (premiums paid for early repayment of debt) upon the payment of accelerated debt following the borrower’s bankruptcy default. The Court ruled that the governing loan documents lacked specific language requiring a make-whole premium upon acceleration.

Lenders typically have extensive requirements for what inventory will be deemed “eligible” and included in a borrower’s borrowing base for purposes of determining how much the lender is required to lend. One of those typical requirements is that the inventory be owned by the borrower and located at a borrower location in the United States of America, where it will be subject to the Uniform Commercial Code and amenable to an Article 9 security interest.