A recent decision by the Seventh Circuit Court of Appeals contains two important lessons for anyone drafting documents which contain a trademark license. In In re XMH Corporation, the Seventh Circuit held that a licensee may not assign a trademark license in a bankruptcy case over the licensor's objection unless there is an expres
A New York trial court recently held that affiliates and subsidiaries of a bankrupt Mexican holding company were liable as guarantors on indentures issued by the corporation, despite ongoing Mexican bankruptcy proceedings that could potentially discharge their liability under Mexican law. Wilmington Trust, National Assoc. v. Vitro Automotriz, S.A. De C.V., et al., No. 652303/11 (N.Y. Sup. Ct. 2011).
Health care lenders and others evaluating or relying on the financial strength of a healthcare provider need to think about the potential recoupment and setoff of claims against Medicare/Medicaid receivables of the provider.
RECOUPMENT
2011 did not begin with a bang for bankruptcy professionals. Commercial bankruptcy case filings were infrequent and so too were the release (or publication) of major bankruptcy court decisions. The second half of the year was a different story.
The last several years have seen bankruptcy filings from prominent retail chains such as Borders, Circuit City, Blockbuster, Movie Gallery and Ritz Camera. Many of these cases have resulted in liquidation. For commercial landlords, retail bankruptcy cases present a number of potentially damaging issues, including non-payment of rent, assignment of the lease to an unworthy tenant, vacant space in an otherwise popular location and going-out-of business sales.
In late 2011, bondholders in the bankruptcy case of power company Dynegy Holdings, LLC (Dynegy) moved for the appointment of a bankruptcy examiner to investigate certain transactions that occurred immediately prior to the filing of Dynegy's bankruptcy petition. The transactions at issue involve the alleged transfer of millions of dollars in assets to Dynegy's parent company (a non-debtor) approximately two months prior to the bankruptcy filing.
As real estate-related bankruptcy filings remain steady, courts continue to see debtors challenging the validity of deeds of trust and mortgages due to minor scriveners’ errors. The United States Bankruptcy Court for the Eastern District of North Carolina is viewed by debtors as a favorable venue in which to bring such challenges due to a string of prior rulings starting with In re Head Grading in 2006, which invalidated a North Carolina deed of trust that incorrectly cited the date of the related note by one day. The latest chapter in this saga involves an effort by a
Introduction
Prepayment provisions are intended, in part, to protect lenders in a depressed market from losses resulting from the costs of replacing their loans sooner than expected and having to relend at rates lower than those originally charged. A New York federal district court recently upheld a bankruptcy judge's ruling denying a lender's claim for a $7.5 million prepayment premium against a borrower-debtor.1 The lender must have been both surprised and disappointed to learn from the courts' decisions that this result could have been avoided had the lender's loan documents included