In Longoria v. Somers and LC Therapeutics, Inc., C.A. No. 2018-0190-JTL (Del. Ch. May 28, 2019), the Delaware Court of Chancery examined its authority to tax the costs of receivership against the stockholder of an insolvent corporation. The Court’s decision highlights an exception to the general principle that stockholders of a properly maintained corporation are not responsible for costs incurred by the corporation and illustrates a scenario where stockholders may be held liable for a corporation’s obligations.
In response to the Federal Energy Regulatory Commission (“FERC”), the U.S. Bankruptcy Court for the Northern District of California held that the rejection of wholesale power purchase agreements “is solely within the power of the bankruptcy court, a core matter exclusively this court’s responsibility.” [1]
Executive Summary
Last week, the Supreme Court (the “Court”) ruled a debtor in bankruptcy cannot use the Bankruptcy Code to cut off a licensee’s rights under a license to use the debtor’s trademarks. This ruling resolves a Circuit split and brings the treatment of trademark licenses from a bankrupt debtor in line with patent and copyright licenses, which are protected statutorily by Bankruptcy Code section 365(n).
On 27 March 2019, the Federal Court of Australia delivered an important decision demonstrating the Court's willingness to assist liquidators to streamline the procedural aspects of liquidations using technology with the aim of conserving assets for the benefit of creditors.
In January, we wrote about a decision of Justice Watt of the Ontario Court of Appeal, which addressed the question of which appeal procedure must be followed in appeals of Orders made in proceedings constituted under both the Bankruptcy and Insolvency Act (the “BIA”) and the
In a consultation issued by the UK tax authority, HM Revenue & Customs (HMRC), on 26 February 2019, a change in the order of asset distribution in the insolvency of UK companies has been proposed. The amendments would newly favour certain taxes collected and held by an insolvent entity ahead of certain secured and unsecured creditors and would come into force in April 2020.
The Supreme Court of Canada’s Decision in Orphan Well Association v. Grant Thornton Ltd.
In a recent opinion, the Second Circuit Court of Appeals held that a seller licensed under the Perishable Agricultural Commodities Act (“PACA”) could not entirely setoff payables owed to a bankrupt PACA merchant against receivables owed by the debtor. The ruling is a reminder to PACA-regulated parties that otherwise common operational practices such as setoffs may not be recognized and enforceable in bankruptcy or in PACA-regulated transactions.
A recent decision of Justice Watt of the Ontario Court of Appeal definitively answers the question of which appeal procedure must be followed in appeals of Orders made in proceedings constituted under both the Bankruptcy and Insolvency Act (the “BIA”) and the Courts of Justice Act (the “CJA”). Justice Watt’s decision in Business Development Bank of Canada v. Astoria Organic Matters Ltd.