In recent weeks, a move dubbed the “Texas Two-Step” has leaped from coverage first in publications geared only for the professional restructuring community, then to the mainstream press, then to hearings before the United States Senate Judiciary Committee, and now to a full-blown trial ongoing in a New Jersey bankruptcy court.

“I did not want you to hear this on the news for the first time, but we are filing for bankruptcy next week.” “This is a difficult call to make. We are going out of business and will probably be filing a chapter 7 in the next couple of days.” Needless to say, bankruptcy is problematic for a licensor: the licensee may cease performing, the royalty stream may run dry, and the licensee or a trustee could attempt to sell or assign the license in bankruptcy to an undesirable licensee, or even a competitor.

The filing of a bankruptcy petition under any chapter of the Bankruptcy Code creates the ‘automatic stay,’ which prevents creditors from taking any further action against either the debtor or the debtor’s assets during the bankruptcy. Seasoned bankruptcy attorneys know that a violation of the automatic stay is a serious matter and, because of this, appropriately advise their clients on complying with, or enforcing, the stay. However, stay violations can inadvertently occur even when all reasonable and necessary precautions are taken.

The opinion is Wells Fargo Bank, Indenture Trustee v. The Hertz Corp. (In re The Hertz Corp)

The question is whether (and at what rate) post-petition interest can be recovered on pre-petition unsecured claims, when debtor is solvent, under the “solvent debtor exception.” The answers pit equitable arguments against statutory provisions and even looks back to caselaw under the Bankruptcy Act of 1898.

Here’s a first of its kind: a report about federal judges mediating other judges’ cases.

• It’s a January 22, 2022, report titled, Other Judges’ Cases, authored by Melissa B. Jacoby, Professor of Law, University of North Carolina at Chapel Hill—scheduled to publish in 72 NYU Annual Survey of American Law (2022).

What follows is an attempt to summarize portions of the report, including its description of a can-this-actually-happen case.

Foreign companies seeking to protect their overseas assets from their creditors have often turned to the United States for immediate relief under Chapter 11 of the Bankruptcy Code. Establishing jurisdiction in the US for purposes of a bankruptcy filing has proved easy – the establishment of a nominal professional fees retainer with a local law firm on the eve of a bankruptcy filing will suffice.

On February 3, 2022, as part of a series of recent decisions addressing third-party releases, Bankruptcy Judge John T.

The Second Circuit Court of Appeals recently issued an opinion that potentially broadens the proximate cause element of claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO’s proximate cause element requires a plaintiff to allege facts plausibly establishing that there is a “direct relationship” between the claimed injury and the defendant’s conduct in violation of RICO.

The Ninth Circuit Bankruptcy Appellate Panel (BAP) recently held that merely freezing a debtor’s bank account holding funds that had been garnished by a judgment creditor did not violate the automatic stay. This decision was based on the United States Supreme Court’s ruling last year in City of Chicago v. Fulton, holding that retention of repossessed vehicles that were possessed before a bankruptcy was filed did not violate the automatic stay.

“[E]nsnared between his involvement in a business that is legal under the laws of Arizona but illegal under federal law,” one debtor’s chapter 13 petition was recently dismissed due to his undisputed violations of the Controlled Substances Act.