For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current global developments.

Protections added to the Bankruptcy Code in 1988 that give some intellectual property (“IP”) licensees the right to continued use of licensed property notwithstanding rejection of the underlying license agreement do not expressly apply to trademark licenses. As a consequence, a trademark licensee faces a great deal of uncertainty concerning its ability to continue using a licensed trademark if the licensor files for bankruptcy.

Debt-for-equity swaps and debt exchanges are common features of out-of-court as well as chapter 11 restructurings. For publicly traded securities, out-of-court restructurings in the form of "exchange offers" or "tender offers" are, absent an exemption, subject to the rules governing an issuance of new securities under the Securities Exchange Act of 1933 (the "SEA") as well as the SEA tender offer rules.

Argentina—The long-running dispute over the payment of Argentina’s sovereign debt has been particularly active in recent weeks and months.

Events Leading Up to Argentina's Default

On March 2, 2015, the Iowa District Court for Polk County entered a Final Order of Liquidation against CoOportunity Health, Inc. ("CoOportunity") after previously placing CoOportunity under a rehabilitation order. 

In December 2013, the U.S. Court of Appeals for the Second Circuit held as a matter of first impression in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013), that section 109(a) of the Bankruptcy Code, which requires a debtor "under this title" to have a domicile, a place of business, or property in the U.S., applies in cases under chapter 15 of the Bankruptcy Code.

For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.

Recent Developments

A "structured dismissal" of a chapter 11 case following a sale of substantially all of the debtor's assets has become increasingly common as a way to minimize cost and maximize creditor recoveries. However, only a handful of rulings have been issued on the subject, perhaps because bankruptcy courts are unclear as to whether the Bankruptcy Code authorizes the remedy. A Texas bankruptcy court recently added to this slim body of jurisprudence. InIn re Buffet Partners, L.P., 2014 BL 207602 (Bankr. N.D. Tex.

NOTABLE BUSINESS BANKRUPTCY DECISIONS OF 2014

ALLOWANCE/DISALLOWANCE/PRIORITY/DISCHARGE OF CLAIMS

In its first bankruptcy decision of 2014 (October Term, 2013), the U.S. Supreme Court held on March 4, 2014, in Law v. Siegel, 134 S. Ct. 1188 (2014), that a bankruptcy court cannot impose a surcharge on exempt property due to a chapter 7 debtor’s misconduct. In reversing a ruling by the Ninth Circuit, Law v. Siegel (In re Law), 2011 BL 148411 (9th Cir. June 6, 2011), cert. granted, 133 S. Ct.