Trademark licensing is a driving force in business relationships. One common example is where one business owns a trademark, which it licenses out to other companies who manufacture and sell the products bearing the mark. But, what happens if the trademark owner goes bankrupt? Bankruptcy law gives a debtor the right to “reject” contracts to free itself of obligations, but if a trademark owner/licensor “rejects” a trademark license agreement, how does that affect the trademark licensee?

Following consultations on insolvency and corporate governance in 2017 and 2018, the Government recently published its response setting out some notable proposed changes to the existing insolvency and corporate governance legislation. Following the high profile failures of Carillion and BHS, the Government’s response is largely aimed at encouraging the recovery of viable companies, improving transparency and promoting responsible directorship. This article will primarily look at the proposed changes focused on facilitating a rescue culture.

Happy birthday, Aubrey Drake Graham. Most people know Mr. Graham strictly by his middle name. The Canadian rapper Drake has carved out a hugely successful career for himself. He sells lots and lots of records – or whatever it is that they sell in the music business these days. Surprise: Drake’s music isn’t exactly our thing. We still play the Beatles more than anything else, we sing along with Crosby, Stills, & Nash in the car, and we have difficulty naming songs post-dating Nirvana.

R&I Alert

Restructuring & Insolvency News

October 2018, Issue 3

In This Issue:

• What happens to committee claims when a

case is converted from a chapter 11 case to

a chapter 7 case? 1

• Equitable mootness: alive and well in the

third circuit 1

• Buyer beware: anti-assignment clauses

enforceable under delaware law 2

• Bankruptcy court finds substantive consolidation

of non-debtors not an available remedy in

seventh circuit 3

• A creditor is allowed to be “selfish” when

Obtaining a favourable arbitration award often proves to be only half of the battle. Facing obstructive counterparties refusing to honour awards, often based in jurisdictions where enforcement is slow, difficult and uncertain, is a source of regular frustration to those pursuing claims in arbitration. That is why anyone involved in international trade should be familiar with the variety of measures available to enforce their awards.

The Western Australian Court of Appeal has ruled that giving security to a Bank does not destroy mutuality for the purposes of statutory set-off if the security allows the debtor to use assets to pay its debts in the ordinary course of business.

Background Facts

In line with measures announced in the 2018 Federal Budget, the government has released a package of proposed insolvency reforms: Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2018, Insolvency Practice Rules (Corporations) Amendment (Restricting Related Creditor Voting Rights) Rules 2018 and accompanying explanatory material, for consultation. Consultation concludes on 27 September.

The Patent Office's decision in McCann as Liquidator of ACN 137 233 919 v Molnar [2017] APO 30 explores interesting territory for liquidators and insolvency professionals – the intersection of insolvency and intellectual property.

On 2 October 2015, a company which had gone into liquidation, Sax, filed a request to amend the ownership of a patent application from itself to its sole director, Ms Molnar, pursuant to a sale agreement by which Sax had sold all of its intellectual property to Ms Molnar for $55,000. The Patent Office recorded the amendment on 16 October 2015.