When being sued, corporate and individual defendants should always confirm that the plaintiff has not been previously discharged in bankruptcy and failed to disclose the claim in the proceeding as an asset of the bankruptcy estate. In Guay v. Burack, 677 F.3d 10 (1st Cir. 2012), the plaintiff brought numerous claims against various governmental entities, governmental officials and a police officer.
Taxpayers that engaged in transactions under §381(a), including tax-free liquidations under §332 and certain tax-free reorganizations under §361, previously could not change their methods of accounting for the year of the transaction using the automatic consent procedures under Rev. Proc. 2011-14, 2011-1 C.B.
In the first decision, the U.S. Court of Appeals for the Sixth Circuit affirmed the district court decision, concluding that a defendant’s bankruptcy filing does not prevent the district court from ruling on a contempt motion for violation of a temporary restraining order protecting plaintiff’s trademarks. Dominic’s Restaurant of Dayton, Inc. v. Mantia, Case Nos. 10-3376; -3377 (6th Circuit July 5, 2012) (Batchelder, C.J.; McKeague, J.; Quist, D.J., sitting by designation).
In a recent decision, the 7th Circuit Court of Appeals was faced with a situation that is the bane of any commercial and business attorney. A legal document contained an error. But in this case, the error was so extreme and obvious that the court was willing to reform the document to correct the error, in the face of other cases where courts refused to let parties escape from their mistakes. In re: Equipment Acquisition Resources (7th Cir., No. 1103905 decided on August 9, 2012)
In a recent opinion, the Supreme Court unanimously affirmed a secured lender’s right to credit-bid at a bankruptcy sale of assets encumbered by such lender’s liens. In addition to solidifying the rights and protections afforded to a secured creditor in bankruptcy, the Supreme Court lessened some of the uncertainty associated with the acquisition strategy by which a potential buyer purchases claims secured by the targeted assets of a troubled company and seeks to exercise such secured creditor’s rights as to such assets.
In a recent important decision, the 7th Circuit Court of Appeals held that a trademark licensor could not use its bankruptcy to deny the rights of a licensee to use the trademark pursuant to a pre-bankruptcy agreement. (Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 7th Circuit Court of Appeals, No. 11-3920, decided July 9, 2012) This decision creates a conflict among the federal circuits, which often means the U.S. Supreme Court must eventually decide the issue.
One of the benefits to a corporate form of entity is the protection of shareholders from liability for obligations of the corporation. Of course, as we all know, there are still legal claims which could impose liability on a corporate shareholder for obligations of the corporation. In a recent case, a former executive of a corporation tried to assert a tortious interference claim against a majority shareholder, when it terminated severance payments that were owed to the executive. (Nation v. American Capital, Ltd., 7th Circuit Court of Appeals, Case No.
Recently, the Supreme Court of the United States held that a debtor cannot confirm a Chapter 11 “cramdown” plan that provides for the sale of collateral free and clear of a secured creditor’s lien when it denies the secured creditor’s right to credit bid at the auction. This should be welcome news to members of the secured lending community because guaranteeing the right of secured creditors to credit bid will reduce the risk of making such loans.
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The U.S. Court of Appeals for the Fifth Circuit recently held that a paragraph in an asset purchase agreement qualified as an amendment to an employee benefit plan, highlighting a split between circuits of the U.S. Courts of Appeal.
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In a case of first impression that has important implications for parties who acquire intellectual property rights under international license agreements, the U.S. Bankruptcy Court for the Eastern District of Virginia held that the protections of Section 365(n) of the U.S. Bankruptcy Code applied to licensees of U.S. patents in a Chapter 15 case, despite the fact that those protection were not available under the foreign law applicable to the foreign debtor. In re Qimonda AG, Case No. 09-14766 (Bankr. E.D. Va., Oct. 28, 2011) (Mitchell, Bankruptcy J.).