Chapter 13 of the United States Code’s eleventh title (“Bankruptcy Code” or “Code”) “permits any individual with regular income to propose and have approved a reasonable plan for debt repayment based on that individual’s exact circumstances,” explaining why a Chapter 13 plan is commonly known as “a wage earner’s plan.” In general, upon winning approval of such a plan by a bankruptcy court, a debtor is obligated to pay any post-petitio

On March 1, the District of Columbia Court of Appeals held that a condominium association acting on its six-month super-priority lien for unpaid condominium fees may not perform its foreclosure sale while leaving the property subject to a first deed of trust lien, even if the terms of the sale stated that the condo unit could be sold subject to the first deed of trust. The D.C.

Gibson Brands Inc., along with eleven subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-11025).

After a January 2018 decision by the First Circuit Court of Appeals, trademark licensees are faced with uncertainty again. (In re Tempnology, LLC, 879 F.3d 389 (1st Cir. 2018)). In our previous update, we discussed a 7th Circuit case dealing with the same issue. At the time we predicted that the holding in the case may have resolved the issue. (Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 686 F.3d 372 (7th Cir. 2012)). But that was wrong.

A bankruptcy trustee could not “avoid [a] debtor’s transfer” of encumbered asset sale proceeds when the debtor holds the funds “as a mere disbursing agent [under] a contract that” restricted its use, held the U.S. Court of Appeals for the First Circuit on April 18, 2018. Keach v. Wheeling & Lake Erie Railway Co. (In re Montreal, Me. & Atl. Ry.), 2018 U.S. App. LEXIS 9772 *14 (1st Cir. Apr. 18, 2018).

The Bankruptcy Code gives a bankruptcy trustee, or the debtor in possession, the power to “avoid” certain transfers made by the debtor at various times before filing for bankruptcy relief.

Our February 22 post reported that the Franchise Services of North America, Inc. decision of Bankruptcy Judge Edward Ellington of the Southern District of Mississippi dismissing a Chapter 11 petition because a shareholder had not approved the filing as required by the debtor’s charter was going directly to the U.S. Court of Appeals for the Fifth Circuit on an expedited basis. It is the first case concerning the merits of contractual or structural bankruptcy-remoteness in my memory to reach a Court of Appeals since the adoption of the Bankruptcy Code in 1978.

The Supreme Court’s recent decision in Merit Management Group, LP v. FTI Consulting, Inc. has appropriately drawn significant attention.

LEXISNEXIS A.S. PRATT

APRIL/MAY 2018

EDITOR'S NOTE: COMPARATIVE LAW Steven A. Meyerowitz

WHAT'S PAST IS PROLOGUE: THE EUROPEAN MOVEMENT TOWARD HARMONIZED PRE-INSOLVENCY BUSINESS RESTRUCTURINGS CONTRASTED WITH THE AMERICAN PREFERENCE FOR GOING-CONCERN ASSET SALES Harry Rajak, Patrick E. Mears, and Edward O. Mears

LANDMARK COURT OPINION INCREASES LIABILITY RISK PROFILE FOR GERMAN PORTFOLIO COMPANY MANAGEMENT Bernd Meyer-Lwy and Carl Pickerill

SPLIT FIRST CIRCUIT PREVENTS NON-DEBTOR LICENSEE FROM USING REJECTED TRADEMARK LICENSE Michael L. Cook

In a unanimous decision in Merit Mgmt. Grp., LP v. FTI Consulting, Inc., the U.S. Supreme Court addressed the scope of a Bankruptcy Code exception to the “avoiding powers” of a bankruptcy trustee or Chapter 11 debtor-in-possession that permit invalidation (i.e., avoidance and clawback) of a limited category of transfers of property by a debtor or of a debtor’s interest in property.