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.
On 9 October 2012, a bill proposal was introduced to the Luxembourg Parliament providing for a right to claim back "intangible" and non-fungible movable assets from a bankrupt company.
According to the explanatory memorandum, the bill proposal is intended to allow the recovery of data from a bankrupt provider of distance IT services or cloud computing solutions. Once passed, the law will provide greater certainty as to the consequences of the bankruptcy of a cloud computing provider on the data in its possession.
"Separable" Assets
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.
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.
On 13 June 2012 the Financial Institutions (Special Measures) Act (Wet bijzondere maatregelen financiële ondernemingen; "Intervention Act") entered into force with retro-active effect as of 20 January 2012). The Intervention Act includes new powers for the Netherlands Central Bank ("DNB") to procure that a bank or insurer which is experiencing serious financial problems is transferred, in whole or in part, to a third party.