LTR 201240017 is the world’s longest letter ruling, 111 pages in PDF format. Not surprisingly, it is a Section 355 ruling. It was issued three-and-a-half months after the original submission, with those dates bridging Christmas and New Year’s Day. There were seven additional submissions from the taxpayer in the interim. The release of the ruling was delayed for a couple of months.
If a loan or extension of credit requires collateral, banks prefer collateral that is readily marketable rather than taking a security interest in a closely-held business. Occasionally, the only collateral that is available or that the borrower can offer is corporate stock that is not traded on a public market, an interest in a limited liability company ("LLC") or a partnership interest. It is common for closely-held business entities to prohibit an assignment of an owner's interest or require as a condition to an assignment the consent of the other owners of the entity.
In a surprising decision certain to reinvigorate the ongoing debate about the scope of Stern v. Marshall, ___ U.S. ___, 131 S. Ct. 2594 (2011), the Sixth Circuit Court of Appeals adopted a broad view of Stern and held that the structural nature of the limitations imposed on bankruptcy courts by Article III of the Constitution could not be waived by a party’s failure to object at the trial court level. The decision, Waldman v. Stone, 2012 WL 5275241 (6th Cir. Oct.
Chief Judge Frank Easterbrook of the Seventh Circuit recently created a split of authority regarding the rejection intellectual property licenses in bankruptcy by upholding a decision protecting a trademark licensee’s ability to use a debtor licensor’s trademark after the licensing agreement had been rejected. Chicago American Manufacturing’s licensing contract with debtor Lakewood Engineering & Manufacturing authorized CAM to sell fans under Lakewood’s mark.
In its recent decision in Valley Bank and Trust Company v. Spectrum Scan, LLC (In re Tracy Broadcasting Corp.), the U.S. Court of Appeals for the 10th Circuit overturned lower court decisions that were casting serious doubt on a lender’s ability to realize value from its security interest in the proceeds of FCC broadcast licenses. This alert will briefly describe the law governing security interests in FCC broadcast licenses, as well as the issues created by the lower courts – and ultimately resolved by the appeals court - in the Tracy case.
Introduction
One of the fundamental principles of commercial law is the freedom to contract with a particular party, or to refuse do so. "As a general rule, businesses are free to choose the parties with whom they will deal, as well as the prices, terms and conditions of that dealing." See Pac. Bell Tel. Co. v. Linkline Commc'ns, Inc., 555 U.S. 438 (2009). However, the Bankruptcy Code may permit a court to alter this fundamental principle in certain circumstances. A bankruptcy court did just that in In re Mathson Industries, Inc., 423 B.R. 643 (E.D. Mich. 2010).
How can a professional ensure payment for services appropriately and professionally performed, even in the face of the client’s bankruptcy filing? Professionals considering representing a client in potential financial distress, in particular, will be interested in this discussion of the professional retainer, who owns it and when, and how to hold onto it.
Retainers Are Property of the Client