After Pier One Imports filed for Chapter 11 on February 17, 2020, the company expected to move quickly through a process to approve a consensual reorganization plan.
INTRODUCTION
Associations are all too familiar with bankruptcy serial filers disrupting foreclosure sales leading to frustrating and costly consequences for the Association. Each new bankruptcy filing by the debtor forces the Association to incur additional costs and increases the amount of debt owed while the debtor continues to live on the property without paying the Association.
The “Small Business Reorganization Act of 2019” (SBRA) signed into law on August 23, 2019 contains two amendments to Chapter 11 preference laws, which are NOT limited to small business reorganizations.
1. Debtors’ Burden of Proof.
On February 25, 2019, the U.S. Court of Appeals (2nd Circuit) ruled that the trustee in the Chapter 11 case for Madoff Investment Securities, LLC could use the U.S. Bankruptcy Code to recover payments made between foreign entities. Previously, the Bankruptcy Court for the S.D.N.Y. and the U.S. District Court for the S.D.N.Y ruled that the trustee could NOT sue the foreign entities based on principles of international comity and the presumption against extraterritoriality of U.S. Laws, including the U.S. Bankruptcy Code.
An April 12, 2019 Delaware Bankruptcy Court decision in the Sports Authority Chapter 11 case (In re TSAWD Holdings, Inc.) is an important reminder for sellers of goods on properly obtaining security in the goods they sell, to insure payment from the customer.
On May 20, 2019, United States Supreme Court settled a circuit split, deciding that a bankrupt company’s decision to reject an existing contract does not revoke a trademark licensee’s right to continue using the licensed mark.
INTRODUCTION
A June 2018 Bankruptcy Court decision in the Southern District of New York (SDNY) held that foreign companies with no presence in the U.S. were subject to default judgments.
Companies sell goods or provide services to customers usually on two bases: (1) purchase orders and invoices with references to terms and conditions, or (2) a written sales or supply agreement.