In an 8–1 decision, the Supreme Court of the United States reversed the US Court of Appeals for the First Circuit and held that rejection of a trademark license in bankruptcy constitutes a breach of the license agreement, which has the same effect as a breach outside bankruptcy. Therefore, a licensor’s rejection of a trademark license agreement does not rescind or terminate the licensee’s rights under the agreement, including the right to continue using the mark. Mission Product Holdings Inc. v. Tempnology, LLC, Case No. 17-1657 (S. Ct.

On May 20, 2019, in Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ---, 139 S. Ct. 1652 (2019), the Supreme Court resolved a split among the circuits, holding that a licensor’s rejection of a trademark license in bankruptcy constitutes a prepetition breach, but does not terminate the license.

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Mission Product Holdings Inc. v. Tempnology LLC, 587 U.S. _______, 2019 WL 2166392 (2019)

On June 14, 2019, the U.S. Court of Appeals for the Fifth Circuit issued an opinion[i] affirming bankruptcy and district court decisions finding that, under the terms of the confirmed chapter 11 bankruptcy plan, the debtor’s lenders were not entitled to receive over thirty million dollars of post-petition default interest even though the lenders were fully secured.

Note — This post (plus many others) arrives thanks to the hard work of Sixth Circuit Appellate Blog intern extraordinaire Barrett Block, a rising 3L at UK Law.

Starting now, all creditors must exercise more caution when trying to collect against discharged bankruptcy debtors, because a creditor’s good faith belief that the discharge injunction did not apply is no longer a viable defense. On Monday, June 3, 2019, the U.S. Supreme Court clarified the standard for awarding sanctions against a creditor for violation of the discharge injunction, unanimously holding that a court may hold a creditor in civil contempt for violating a discharge order if there is “no fair ground of doubt” that the discharge order barred the creditor’s conduct.

In a unanimous, and perhaps unsurprising, decision, the Supreme Court determined that a creditor may be held in civil contempt for violating the discharge injunction if there is “no fair ground of doubt” as to whether the creditor’s conduct was barred by the order placing that injunction. The Supreme Court declined to adopt the standard of either of the courts below – the bankruptcy court’s strict liability standard or the Ninth Circuit’s good faith belief “even…if unreasonable” standard.

On June 3, 2019, the U.S. Supreme Court clarified the standard for holding a creditor in contempt for attempts to collect a debt from someone who previously received a bankruptcy discharge. In Taggart v. Lorenzen, Executor of the Estate of Brown, et al., 587 U.S. ____ (2019), the Supreme Court reversed the Court of Appeals for the Ninth Circuit and held that the proper standard to apply to bankruptcy discharge violations was an objective standard.

On May 20, 2019, the Supreme Court issued its opinion in Mission Product Holdings, Inc. v. Tempnology, LLC (“Tempnology”) deciding that rejection of an executory contract by a debtor is only a prepetition breach and not a termination of the contract.