“… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit on Sept. 3, 2019. In re Linn Energy, LLC, 2019 WL 4149481 (5th Cir. Sept. 3, 2019).

The Third Circuit recently took a “pragmatic approach” when affirming lower court orders denying a stay of bankruptcy settlement distributions pending appeal. In re S.S. Body Armor I, Inc., 2019 WL 2588533 (3d Cir. June 25, 2019). After holding that the district court’s “stay denial order” was “final” for jurisdictional purposes, it also confirmed “the applicable standard of review” on motions for stays pending appeals.

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When a Chapter 11 debtor never sought “court approval to assume” an executory service contract, it “did not assume” the contract, held the U.S. District Court for the Eastern District of Virginia on June 28, 2019. In re Toys “R” Us, Inc., 2019 WL 271305, *1 (E.D. Va. June 28, 2019).

The Third Circuit recently took a “pragmatic approach” when affirming lower court orders denying a stay of bankruptcy settlement distributions pending appeal. In re S.S. Body Armor I, Inc., 2019 WL 2588533 (3d Cir. June 25, 2019). After holding that the district court’s “stay denial order” was “final” for jurisdictional purposes, it also confirmed “the applicable standard of review” on motions for stays pending appeals.

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The Supreme Court has just delivered a judgment confirming the entitlement of a judgment debtor to appoint a receiver by way of equitable execution.

The comprehensive judgment is a useful history lesson in the development and expansion of the right to appoint a receiver by way of equitable execution which derives from the old Judicator (Ireland) Act, 1877.

Background

Judgment was obtained by a bank in February 2011 against two borrowers in the amount of €1,064,747.

On May 20, 2019, the U.S. Supreme Court issued a ruling of key significance for trademark licensing and for acquisitions, investments, financings and other transactions in which trademark licenses are a key value driver. In Mission Product Holdings, Inc. v. Tempnology, LLC,[1] the Court held, 8-1, that where the licensor of a trademark rejects a trademark license in bankruptcy, the rejection does not deprive the licensee of its rights to use the licensed trademark(s).

A bankruptcy court decision recently detailed how courts applying Bankruptcy Code (“Code”) § 303(i) can sanction creditors who “abuse… the power given to [them]… to file an involuntary bankruptcy petition.” In re Anmuth Holdings LLC, 2019 WL 1421169, * 1 (Bankr. E.D.N.Y. Mar. 27, 2019).

A bankruptcy trustee was “not entitled to avoid” a secured lender’s “lien under the Bankruptcy Code” (“Code”), held the U.S. Court of Appeals for the Seventh Circuit on Sept. 11, 2019. In re 180 Equipment, LLC, 2019 WL 4296751, *6 (7th Cir. Sept. 11, 2019). The court rejected the trustee’s argument that the lender’s “lien [was] avoidable because the [lender’s] financing statement failed to properly indicate the secured collateral.” Id., at 1.

The U.S. District Court for the Southern District of New York, on April 23, 2019, denied the litigation trustee’s motion for leave to file a sixth amended complaint that would have asserted constructive fraudulent transfer claims against 5,000 Tribune Company (“Tribune”) shareholders. In re Tribune Co. Fraudulent Conveyance Litigation, 2019 WL 1771786 (S.D.N.Y. April 23, 2019). The safe harbor of Bankruptcy Code (“Code”) § 546(e) barred the trustee’s proposed claims, held the court. Id., at * 12.

In a recent application for directions from the High Court, the Office of the Director of Corporate Enforcement (the “ODCE”) brought a motion to compel a liquidator contest an appeal by directors of a restriction order made against them in the High Court.

Section 683 of the Companies Act 2014 (“CA14”) requires the liquidator of an insolvent company to apply for an Order restricting the directors. It does not require liquidator to contest an appeal by directors. The ODCE ultimately withdrew the application and paid costs, but the application raises concerns for all liquidators.