Permanent Reforms

Moratorium: a new stand-alone moratorium to provide businesses with an initial 20-business-day stay from creditor action.

The US Court of Appeals for the Sixth Circuit affirmed that a state court’s finding of “willful and malicious injury” in connection with the misappropriation of trade secrets entitled the plaintiff, in the defendant’s subsequent bankruptcy proceeding, to summary judgment of nondischargeability on collateral estoppel grounds. In re Hill, Case No. 19-5861 (6th Cir. May 4, 2020) (Donald, J.).

“Bankruptcy is about financial death and financial rebirth. Bankruptcy is the great American story rewritten. We’re a nation of debtors.” -Elizabeth Warren

Amid the Coronavirus (COVID-19) pandemic and related economic turmoil, bankruptcy filings in the United States are on the rise. Non-US insurers should review contractual arrangements with US insureds and brokers, and establish a plan to deal with bankruptcy filings across the United States in a consistent fashion.

The extraordinary pandemic-based financial challenges impacting hospitals, health systems and other providers as a result of the Coronavirus (COVID-19) should prompt boards to re-evaluate focus on their duty to monitor the organization’s financial condition. Existing case law provides useful direction on the scope of these duties, particularly during periods of financial distress. There is value to enhancing the engagement of the board’s finance (or similar) committee on solvency matters during this period of crisis.

Der Gesetzesentwurf sieht Regelungen zu Aussetzung der Insolvenzantragspflicht, Zahlungsverboten, neuen Darlehen und Sicherheiten sowie zur Insolvenzanfechtbarkeit vor:

1. Insolvenzantragspflicht

The draft bill provides regulations regarding the suspension of the obligation to file for insolvency, payment prohibitions for management, new loans and securities, as well as claw-back risks:

1. Obligation to File for Insolvency

According to the ministry, the draft bill has been prepared, and a first reading in the Bundestag is scheduled for March 25, 2020. It is expected that the law will come into force this month. According to the aforementioned press release, the temporary suspension of the obligation to file for insolvency will be subject to the following conditions:

Nach Informationen aus dem Ministerium werde derzeit am Gesetzesentwurf gearbeitet und eine erste Lesung im Bundestag sei für den 25.03.2020 geplant. Man gehe davon aus, dass das Gesetz noch in diesem Monat in Kraft treten werde.

Nach der Pressemitteilung vom 16.03.2020 soll die temporäre Aussetzung der Insolvenzantragspflicht an folgende Voraussetzungen geknüpft sein:

In May 2019, with its ruling in Mission Products Holding Inc. v. Tempnology, the US Supreme Court resolved a nationwide circuit split regarding what happens to a trademark license when the trademark owner and licensor declares bankruptcy.

In an 8–1 decision, the Supreme Court of the United States reversed the US Court of Appeals for the First Circuit and held that rejection of a trademark license in bankruptcy constitutes a breach of the license agreement, which has the same effect as a breach outside bankruptcy. Therefore, a licensor’s rejection of a trademark license agreement does not rescind or terminate the licensee’s rights under the agreement, including the right to continue using the mark. Mission Product Holdings Inc. v. Tempnology, LLC, Case No. 17-1657 (S. Ct.