Introduction
August 31, 2012: Second Circuit Adopts Abuse of Discretion Standard of Review for Equitable Mootness Decisions
What is the impact of a bankruptcy filing on the ability of a franchisee to continue utilizing the trademarks of the franchisor?
In a ruling predicted by the Restructuring Review Blog last month, Judge Meredith A. Jury of the U.S. Bankruptcy Court for the Central District of California rejected arguments by CalPERS that the Bankruptcy Court should lift the automatic stay and require San Bernardino to pay pension obligations owed to the pension fund. In re City of San Bernardino, California, Case No. 12‑blk‑28006‑MJ , (Bankr. C.D. Cal. Dec. 21, 2012) (Docket No. 299).
On November 27, 2012, Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York issued an opinion in In re Patriot Coal Corporation1 transferring the chapter 11 proceedings pending before her to the Eastern District of Missouri.
Bankruptcy courts generally do not enforce agreements by borrowers to waive their right to file bankruptcy, as a matter of public policy.
The United States District Court for the Eastern District of California, applying California law, has concluded that it should exercise jurisdiction under the federal Declaratory Judgment Act to determine the availability of coverage for a written demand and has held that the related coverage action should not be stayed in favor of potential future underlying litigation between the Federal Deposition Insurance Corporation (FDIC) and the insureds because the outcome of the coverage litigation would not be dependent on resolution of disputed facts in such a future action. Progressiv
Last week the Supreme Court refused to decide whether, when a trademark licensor files for bankruptcy relief or is placed in involuntary bankruptcy by its creditors, the licensee can keep the rights to the trademark. The Fourth Circuit had said “no” in a 1985 case so reviled that Congress enacted corrective legislation, and 27 years later, the Seventh Circuit said “yes.” Despite this circuit split, the Supreme Court refused to weigh in on the issue. As a result, trademark licensees in New York (Second Circuit), California (Ninth Circuit), and the rest of the country have no certainty.
Earlier this year we reported on a Michigan trial court opinion, issued by Judge Edward R. Post of the Ottawa County Circuit Court in First Financial Bank, N.A. v. Scott T. Bosgraaf, et al., Case No. 11-02488 (click here to read), concluding that a court-appointed receiver has the power to sell mortgaged commercial real property free and clear of statutory mortgage foreclosure redemption rights.