Unsecured creditors and other stakeholders sometimes challenge the reasonableness of fees incurred by estate professionals in a bankruptcy case. Whether this is to augment unsecured creditor recoveries or serve as a check on the private bar is in the eye of the beholder. Whatever the reason, fee litigation in bankruptcy caused many professionals to seek payment from the bankruptcy estate for any fees incurred defending against an objection to their fees.
Recently, in Gupta v. Quincy Medical Center, 858 F.3d 657 (1st Cir. 2017), the U.S. Court of Appeals for the First Circuit clarified the limits of the bankruptcy courts’ subject-matter jurisdiction over civil proceedings. The decision, authored by Judge Lipez and joined by retired Supreme Court Justice David Souter (sitting by designation), provides a thorough analysis of the bankruptcy courts’ jurisdiction in such cases.
The U.S. Court of Appeals for the Seventh Circuit in Chicago has issued a decision with significant implications for licensees of trademarks whose licensors become debtors in bankruptcy. In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, the Court considered whether rejection of a trademark license in bankruptcy deprives the licensee of the right to use the licensed mark.1 Disagreeing with the holding of the Court of Appeals for the Fourth Circuit in Lubrizol Enterprises, Inc. v.
In the Summer 2009 issue of the Legal Canvas, we wrote about the wisdom of filing a UCC financing statement when art work is consigned to a gallery. Specifically, we said that the filing of a financing statement that reflects the consignor’s interest in the work provides protection against the gallery’s creditors. Financing statements take no time to prepare and cost less than $50 to file.
It could be money well spent.
U.S. bankruptcy law permits debtors-in-possession and trustees to sell assets free and clear of claims, liens and other interests. But a federal judge in New York ruled recently that a purchaser does not necessarily buy free and clear when a product manufactured pre-bankruptcy causes injury after a sale closes. Morgan Olson L.L.C. v. Frederico (In re Grumman Olson Indus., Inc.), No. 11 Civ. 2291, 2012 U.S. Dist. LEXIS 44314 (S.D.N.Y. Mar. 29, 2012) (JPO). In this situation, the purchaser can remain liable for injuries caused by the asset purchased from the debtor.
Earlier today AMR Corporation, its subsidiary American Airlines, Inc., and 18 other affiliates ("Debtors") filed petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York in Manhattan.1 The case was assigned to Bankruptcy Judge Sean H. Lane. The Debtors have asked the Court to consolidate all 20 cases for procedural purposes under the captionIn re: AMR Corporation, Case No. 11-15463.
On August 30, 2011, the United States Bankruptcy Court for the Southern District of New York approved the Disclosure Statement for the Revised Second Amended Joint Chapter 11 Plan of Lehman Brothers Holdings, Inc. and its affiliated debtors (collectively, the "Debtors"). The Bankruptcy Court's approval of the Disclosure Statement will permit the Debtors to begin soliciting votes to accept the Plan and is a significant step forward in the Debtors' efforts to achieve resolution of the nation's largest-ever bankruptcy.
The Bottom Line
The Fifth Circuit recently held in RPD Holdings, L.L.C. v. Tech Pharmacy Services (In re Provider Meds, L.L.C.), No. 17-1113 (5th Cir. Oct. 29, 2018), that a patent license that was not specifically listed on the debtors’ bankruptcy schedules was automatically deemed rejected where it was not assumed within 60 days of the cases’ conversion from Chapter 11 to Chapter 7.
What Happened?
The Bottom Line:
While many amendments to bond indentures can be made without consent from all bondholders, “non-impairment” clauses provide that the indenture may not be amended or restructured in any way that will affect or impair a bondholder’s right to receive principal and interest when due without unanimous consent.