In determining the legal standard for holding a creditor in civil contempt for attempting to collect a debt in violation of a bankruptcy discharge order, the Supreme Court of the United States adopted an “objectively reasonable” standard, and held that a court may hold a creditor in civil contempt if there is “no fair ground of doubt” as to whether the order barred the creditor’s conduct.

Accordingly, the Supreme Court reversed the Ninth Circuit’s ruling, which had applied a subjective standard for civil contempt.

Clients sometimes ask whether filing bankruptcy can protect them from Federal Trade Commission scrutiny. The saga of Joseph Rensin and his company BlueHippo provides an opportunity to review the limited protection bankruptcy provides from the FTC.

When a Chapter 11 debtor never sought “court approval to assume” an executory service contract, it “did not assume” the contract, held the U.S. District Court for the Eastern District of Virginia on June 28, 2019. In re Toys “R” Us, Inc., 2019 WL 271305, *1 (E.D. Va. June 28, 2019).

What happens if you are a trademark licensee and your licensor files for bankruptcy protection?

A recent ruling in the Pacific Gas and Electric Company (PG&E) bankruptcy proceeding highlights the risk to certain renewable energy projects from utility bankruptcy. In a June 7, 2019 ruling, the PG&E bankruptcy court denied the claim that Federal Energy Regulatory Commission (FERC) must approve any attempt by bankruptcy courts to reject (i.e., void) power project agreements (PPAs) between renewable project owners and utilities. This is in direct opposition to a FERC ruling that it does have this power.

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.

Abstract

The Supreme Court recently held that if a bankrupt trademark licensor rejects a trademark licensing agreement during bankruptcy proceedings the licensee does not lose its right to continue using the licensed trademark post-rejection.

Background

Our May 22 post reported on the Supreme Court’s May 20 decision in Mission Product Holdings, Inc. v.

This chapter is taken from Lexology GTDT’s Practice Guide to Franchise, examining key themes topical to cross border franchising.

Introduction

Under title 11 of the United States Code (the “Bankruptcy Code”), generally speaking, payments by insolvent debtors to an unsecured or undersecured creditor on pre-existing indebtedness (so-called “antecedent debt”) made during the 90-day period before the debtor’s bankruptcy filing (the “Preference Period”) are vulnerable to claw-back in the debtor’s bankruptcy case as voidable preferences.