In October 2012, The Futura Loyalty Group Inc. (“Futura”) commenced proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”). On November 13, 2012, Justice Brown of the Ontario Superior Court of Justice (Commercial List) (the “Court”) considered Futura’s request to permit pre-filing, prepayment obligations to its key customers.

The Debtor’s Freeze: Protecting Your Client’s Assets

I. INTRODUCTION

A. Protecting Assets

According to the International Trademark Association (“INTA”), “whether a debtor-licensor can terminate a trademark license by rejection, thereby ‘taking back’ trademark rights it has licensed and precluding its licensee from using the trademark” is “the most significant unresolved legal issue in trademark licensing.” It likely will not stay unresolved for much longer; on October 26, 2018, the United States Supreme Court granted a petition for certiorari to resolve this specific issue as part of the Mission Product Holdings Inc. v. Tempnology LLC case.

In September 2010, the District Court for the Eastern District of Virginia denied a reclaiming seller rights despite the claimant’s service of a timely written reclamation demand and compliance with a reclamation procedures order and section 546(c) of the Bankruptcy Code.

Section 546(c) of the Bankruptcy Code provides that: