Intellectual property rights, such as copyrights, trademarks, and patents, are critical to the operation of many businesses. Often the rights to use intellectual property are dependent upon licenses granting a contractual right to the use of the intellectual property. The bankruptcy of an intellectual property licensor can substantially impact the business of the licensee and the continued right to the use of the licensed intellectual property. Similarly, a bankruptcy filing by a licensee may jeopardize important revenue streams, which a licensor of the intellectual property relies upon.

On May 16, 2008, the United States Supreme Court decided Florida Department of Revenue v. Piccadilly Cafeterias, Inc. and ruled that debtors who sell property during the course of a Chapter 11 case prior to the confirmation of a plan cannot use Section 1146(a) of the Bankruptcy Code to exempt those sales from applicable state transfer and stamp taxes.

AlphaStar Insurance Group Ltd. ("AlphaStar") (f/k/a Stirling Cooke Brown Holdings Ltd) was a group of companies which provided, among other services, reinsurance brokerage and intermediary services through companies in London, Bermuda and the United States. The companies collapsed and eventually declared bankruptcy, largely as a result of their involvement in the personal accident reinsurance market. Richard E.

In Monday’s 7-2 decision in Florida Department of Revenue v. Piccadilly Cafeterias, Inc., the Supreme Court of the United States held that the exemption from state transfer and stamp taxes in Section 1146(a) of the Bankruptcy Code does not apply to transfers that take place prior to the time the Bankruptcy Court confirms a reorganization plan. Section 1146(a) had been cited by bankruptcy debtors and their asset purchasers in seeking tax exemptions for Section 363 sales and other pre-confirmation transfers.

The rapid growth in derivatives as hedging instruments, particularly through equity swaps, credit default swaps ("CDS") and loan credit default swaps ("LCDS"), has challenged fundamental assumptions underlying corporate governance law, federal shareholder disclosure requirements and bankruptcy law. Corporate law has long relied on a "one share one vote" model, which presumes that a shareholder's economic interests in a corporation are inextricably linked to their voting power.

The Ninth Circuit Bankruptcy Appellate Panel has issued a pair of rulings in a case involving high-stakes litigation—with a claim in excess of $230 million, including $3 million in postpetition attorneys’ fees and costs. Beyond the high stakes, the court’s conclusions in Centre Ins. Co. v. SNTL Corp. (In re SNTL Corp.), 380 B.R. 204 (9th Cir. BAP 2007) have far-reaching implications; they are likely to affect a multitude of financing transactions that become entangled in bankruptcy.

A federal district court in Michigan has affirmed a bankruptcy court’s refusal to accept a higher bid for various estate assets because the bid was made after the close of the auction, albeit prior to the hearing to confirm the auction results. Evangelista v. Opperman (In re Sebert), No. 07-15509 (E.D. Mich. Mar. 11, 2008).

A Pennsylvania state court has reportedly ruled, in an unpublished opinion, that the Pennsylvania Insurance Commissioner may pursue a theory of damages against the accountant of an insolvent insurer based on a legal claim of “deepening insolvency.” SeeArio v. Deloitte & Touche, PICS No. 08-1013 (Pa. Commw. Ct.).

The U.S. Court of Appeals for the Fifth Circuit reversed a bankruptcy court’s equitable subordination order on June 20, 2008. Wooley v. Faulkner (In re SI Restructuring, Inc.), ____ F.3d __, 2008 WL2469406 (5th Cir. 2008). According to the court, subordination of the insiders’ secured claims was “inappropriate” because the bankruptcy trustee had failed to show that the defendant insiders’ “loans to the debtor harmed either the debtor or the general creditors.” Id., at *1. The court also rejected the trustee’s “deepening insolvency” argument on the facts and as a matter of law.

Given the state of the economy, it will not be a rare occurrence in the short term for a supplier to receive a request to sell and deliver further goods to a purchaser who has filed proceedings under the Companies Creditors Arrangement Act (CCAA) or Chapter 11 of the United States Bankruptcy Code — and who is already indebted for unpaid pre-filing sales.