Read Business Law Update to stay up-to-date on legal issues that impact public and private companies on a local, regional and global basis. Articles in this issue include:
Mergers & Acquisitions
Commercial Contracts
Small Businesses
Government Contracts
The United States Supreme Court has granted certiorari on an issue that has greatly divided Circuit Courts of Appeal – the question of whether an entity that retains possession of a debtor’s property has an affirmative obligation to return that property to the debtor or trustee immediately upon the filing of the bankruptcy petition or risk being in violation of the automatic stay.
Last October we highlighted an important ruling issued in September 2019 by the Seventh Circuit in the bankruptcy proceeding of In re I80 Equipment, LLC.
Alexandra Vinogradova v (1) Elena Vinogradova, (2) Sergey Vinogradov (BVIHCMAP 2018/052)
For decades, trademark licensees have been at the mercy of their licensors’ petition for relief in bankruptcy. The Bankruptcy Code allows debtor-licensors to reject executory contracts like trademark licenses, relieving them of the obligation to perform under the contract or license. Bankruptcy courts have long been in disagreement over the effect on the trademark licensee upon rejection of such a license. Is the license agreement terminated, leaving the licensee with no ongoing rights to use the trademark?
The Supreme Court, in Ritzen Group, Inc. v. Jackson Masonry, LLC,1 issued an unanimous opinion last week, ruling that the Court of Appeals for the Sixth Circuit correctly denied the ability of creditor Ritzen Group Inc.
The Second Circuit Court of Appeals recently held in In re Tribune Company Fraudulent Conveyance Litigation, No. 13-3992-cv (L) (2d Cir., Dec. 19, 2019) that Bankruptcy Code Section 546(e) barred claims seeking to avoid payments made by Tribune to its shareholders as part of a leveraged buyout (LBO).
Only two asbestos bankruptcy cases were filed in 2019 – the lowest number in any one year since Congress enacted the special asbestos bankruptcy trust/channeling injunction statute, Section 524(g) of the Bankruptcy Code.
A bankruptcy trustee may sell “avoidance powers to a self-interested party that will abandon those claims, so long as the overall value obtained for the transfer is appropriate,” held the U.S. Court of Appeals for the Ninth Circuit on Jan. 15, 2020. Silverman v. Birdsell, 2020 WL 236777, *1 (9th Cir. Jan. 15, 2020).
When negotiating forbearance agreements with borrowers, lenders should consider including a pre-petition waiver of the debtor’s right to oppose a motion for relief from the automatic stay. In a recent decision, the Northern District of Georgia Bankruptcy Court found that a pre-petition waiver of the right to oppose a motion for stay relief was enforceable. A closer examination of this opinion provides guidance to lenders and secured creditors in negotiating these provisions with borrowers.