Fixed and floating charges – why are they important?

They give a lender a higher position in the queue for the net proceeds of a borrower’s assets in the event of a borrower’s insolvency.

This blog refers to Bettina Goletz’s blog on “Limits on non-compete and non-solicitation clauses under German law”. We have recently been asked whether the employee is entitled to compensation payments under a post-contractual non-compete clause in the situation where the employing company files for insolvency.

Introduction

When the UNCITRAL Model Law on Cross-Border Insolvency (Model Law) was introduced into Australian law in 2008, Australian admiralty practitioners expressed concern that the legislation which enacted the Model Law into Australian law did not take into account its potential impact on the right to arrest a ship in Australia.  The concern was that the Model Law would prevent parties from arresting ships in Australia, if the shipowner or charterer was the subject of foreign insolvency proceedings.  

Employees’ rights in bankruptcy in the UAE On the face of it, employees’ rights in the UAE seem to be well protected by the bankruptcy laws. Under Article 713(1) of Federal Law No. 18 of 1993 (Commercial Transactions Law), the wages and salaries of workers that have become due 30 days prior to the adjudication of bankruptcy may be paid on a super-priority level (“regardless of any other debt”) by the bankruptcy trustee. However, there is some uncertainty as to whether employees would be paid before secured creditors as the bankruptcy laws remain largely untested in the UAE courts.

The Ninth Circuit has extended an additional level of protection for company publications that take the form of blogs. In reference to the level of fault required to prove liability for an allegedly defamatory posting, the court explained that it is irrelevant whether a blogger is a member of an institutional press corps or a private entity.

The Illinois Supreme Court recently provided certainty to dissolving corporations with respect to the risk of facing a lawsuit even after it has long since dissolved. Illinois permits lawsuits against dissolved corporations for up to five years after the corporation has ceased to exist. The Supreme Court clarified that only those claims that have accrued prior to the corporation's dissolution (i.e., the injury occurred prior to dissolution) may be brought in that five-year period.

The 7th Circuit has again left a disappointed creditor with no recourse because of the creditor's failure to do basic investigation or take steps to protect itself. (On Command Video Corporation vs. Samuel J. Roti, Nos. 12-1351 and 12-1430, January 14, 2013). This case follows other cases in which the 7th Circuit has shown itself decidedly unfriendly to creditors who sought compensation through the courts in failed business ventures but could have, but failed, to prevent their unfortunate situation.

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.

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 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.