In a case originating out of bankruptcy court, the U.S. Court of Appeals for the Eighth Circuit affirmed the bankruptcy court’s finding that a perpetual, royalty free, assignable, transferable, exclusive license granted as part of the sale of the business operations, assets and intellectual property associated with two bread baking brands was an executory contract.  Lewis Bros. Bakeries Inc. v. Interstate Brands Corp., Case No. 11-1850 (8th Cir., Aug. 30, 2012) (Bye, J.).

During an American Bar Association (ABA) program on antitrust and health care issues on October 1, 2012, U.S. Federal Trade Commission (FTC) Deputy Director for Health Care and Antitrust, Leemore Dafny, said that the FTC will focus on how patients purportedly react to price increases, as measured by "diversion ratios," when deciding which hospital mergers to investigate further for potential anticompetitive effects. 

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 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.

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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Yesterday, the Supreme Court of the United States ruled that a Chapter 11 plan that provides for the sale of assets free and clear of a creditor’s lien must allow the creditor to “credit bid” at the sale. In upholding the Seventh Circuit’s decision,¹RadLAX Gateway Hotel, LLC v. Amalgamated Bank resolved the circuit split on this issue between the Seventh Circuit, on the one hand, and the Third and Fifth Circuits, on the other.

BANKRUPTCY CODE

Nearly a year has passed since the Supreme Court held, in Stern v. Marshall,¹ that bankruptcy courts may not determine a potentially broad range of “private rights” disputes arising in bankruptcy proceedings. Lower courts have grappled with the practical implications of Stern, but it is not yet clear whether the decision will ultimately result in a significant curtailment of bankruptcy court power or prove narrower in application.

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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On March 1, 2012 a number of important changes to the insolvency regime in Germany came into force.¹ The main objective of the reforms is to facilitate the restructuring of companies and to enhance creditor’s involvement. The German government believes – in light of the recent financial crisis – that these reforms are necessary to facilitate complex restructurings.

NEW PRELIMINARY CREDITORS’ COMMITTEE