One month ago, Judge Christopher Klein ruled in the city of Stockton, CA bankruptcy case that public employee pension obligations can be impaired in municipal bankruptcy cases under Chapter 9 of the Bankruptcy Code.  Last week, however, Judge Klein approved the plan of adjustment for Stockton that left public pension obligations intact over the vociferous objection of Franklin Investments, a major city bondholder whose claim was substantially reduced.  The confirmation of the Stockton plan underscores that even as there now appears to be a sound legal foundatio

Judge Rhodes has approved the plan of adjustment for Detroit to emerge from bankruptcy.  More analysis to come, but most critically for our purposes it affirms the Grand Bargain and the security of the collection of the Detroit Institute of Arts.  We’ll post the full opinion when it’s published, but notably, Nathan Bomey at the Detroit Free Press reported from the courtroom that Judge Rhodes praised the decision not to sell the DIA collection: “Maintaining the art at the DIA is critical to maintaining the feasibility of the city’s plan of adjustment and the city’s future.

In the Chapter 11 case of Crumbs Bake Shop, Inc. (the “Debtor”), a New Jersey bankruptcy court recently issued an opinion1 extending to trademark licensees certain protections already expressly available to other intellectual property licensees under Bankruptcy Code § 365(n).2 In addition, the Court held that the Debtor could not sell its assets free and clear of such protections and found that any future royalties under the license agreement belonged to the Debtor’s estate.3

The U.S. Supreme Court (SCOTUS) has denied certiorari to petitioners alleging that Aaroma Holdings LLC is liable for personal injury claims stemming from the use of diacetyl by Emoral Inc., which declared bankruptcy in 2011 after Aaroma bought its assets in 2010. Diacetyl Plaintiffs v. Aaroma Holdings LLC, No. 14-71 (U.S., cert. denied November 3, 2014). The petitioners had argued that freeing Aaroma from liability would create a loophole for companies looking to avoid tort liability by encouraging them to sell assets before filing for bankruptcy.

U.S. Bank, N.A. v. Brumfiel (In re Brumfiel), 514 B.R. 637 (Bankr. D. Colo. 2014) –

After a debtor reopened her chapter 7 bankruptcy case, a lender moved for relief from the automatic stay in order to continue with a foreclosure action. The debtor objected, arguing among other things that the lender did not have standing to request relief.

Pennsylvania’s legislature recently approved House Bill No. 1773, an overhaul to its Municipalities Financial Recovery Act, commonly known as “Act 47.”  HB 1773 was signed into law by Governor Tom Corbett on October 31, 2014.

Six trade associations representing non-dealer swap market participants sent a letter to the Financial Stability Board on November 4, urging the FSB to reconsider its initiative to promote contractual waivers of default rights under industry-standard derivative master agreements. The letter, signed by the Managed Funds Association, the Alternative Investment Management Association Limited, the American Council of Life Insurers, the Association of Institutional Investors, the Commodity Customer Coalition and the Commodity Markets Council, responds to comments made by the FSB in the cons

If you doubted it before, you can stop now. The trend of courts finding ways to protect trademark licensees from the harsh effects of losing their trademark license rights in bankruptcy is in full swing.

n re New Bride Missionary Baptist Church, 509 B.R. 85 (Bankr. E.D. Mich. 2014) –

After the bankruptcy court denied confirmation of a debtor’s proposed chapter 11 plan of reorganization because there was no accepting impaired class, the debtor proposed an amended plan that placed a mortgagee’s large deficiency claim in one class and claims of other unsecured creditors in a separate “administrative convenience” class.

United States Bankruptcy Courts, particularly in New York and Delaware, are already a destination for multinational corporate bankruptcy filings, but a recent study co-authored by Stephen J. Lubben, a Seton Hall Law School professor and frequent contributor to The New York Times’ DealBook blog, suggests that the current volume of foreign debtors filing in the U.S.