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Montana Court Refuses to Shift Venue of “Related to” CFPB Police Action to Texas Bankruptcy Court

On February 6, 2018, the District Court for the District of Montana refused a debtor’s request to change the venue of a post-petition “related to” police/regulatory action commenced by a federal agency in district court.  The decision will have important implications on how “related to” litigation is treated for venue purposes—especially in the context of … Continue Reading

Are Trademark Licenses Protected In A Licensor Bankruptcy? The Circuits Are Split.

Certain licensees of intellectual property are expressly given expanded rights when their licensors file bankruptcy.  But what about trademark licensees?  Trademarks are not among the defined categories of “intellectual property” for bankruptcy purposes.  Nonetheless, are trademark licensees otherwise protected in a licensor bankruptcy?  Unfortunately for these licensees, a recent circuit court decision put the brakes … Continue Reading

Texas Showdown Over Class Claims

This past November, the Bankruptcy Court for the Southern District of Texas sided with the majority of circuit courts when it held (i) that bankruptcy courts may apply Federal Rule of Civil Procedure 23 to class proofs of claim and administrative proofs of claim, and (ii) that a putative representative may file a conditional claim … Continue Reading

District Court Opinion Puts the Brakes on Involuntary Bankruptcy Petitions

Filing an involuntary bankruptcy petition is fraught with risk.  If the court dismisses the involuntary petition, the creditors who filed the petition (referred to as the petitioning creditors) may be liable for damages caused by the filing and even punitive damages.  A recent opinion from the District Court for the District of Nevada in State … Continue Reading

The Business of Cannabis – Getting into the Weeds

In a prior post, we examined whether state-licensed marijuana businesses, and those doing business with marijuana businesses, can seek relief under the Bankruptcy Code.  As we noted, the Office of the United States Trustee (the “UST”) has taken the position, most recently in Congressional testimony given in June 2017, that a marijuana business cannot seek bankruptcy … Continue Reading

Marijuana Businesses Barred from the Bankruptcy Courts: But How Far Will the Bar Extend?

As more and more states pass laws allowing the sale of marijuana, whether for medicinal or recreational purposes, investors will try to claim their share of what is certainly going to be a lucrative market. However, even in a growing market, private enterprises fail or need restructuring. This raises the question of whether distressed marijuana … Continue Reading

“But I Didn’t DO Anything – – Passive Conduct and the Automatic Stay

One of the fundamental elements of the American bankruptcy system is the automatic stay under section 362 of the bankruptcy code. The stay protects the debtor and its assets from creditor activity, in order to facilitate equitable treatment of creditors in the collective bankruptcy process. The remedies provided for violations of the stay allow the … Continue Reading

Gawker Media: Hulk Hogan Body Slams Company Into Bankruptcy And Court Pins

The American Bankruptcy Institute Journal just published our article analyzing an important decision issued in the Gawker Media bankruptcy case.  As we discuss, the court’s decision is likely to have a dramatic impact on media-industry debtors because of the court’s refusal to apply the California anti-SLAPP statute to the Debtors’ claim objection.  But the decision is … Continue Reading

SunEdison Court Strikes Down Third-Party Releases On Multiple Grounds

A recent decision by Bankruptcy Judge Stuart Bernstein, made in connection with plan confirmation in the SunEdison bankruptcy case, strikes down non-consensual third-party releases on a variety of bases. The decision analyzes issues regarding subject matter jurisdiction, the circumstances of deemed consent, and the applicable substantive requirements for a non-consensual release. In their plan of … Continue Reading

The Bankruptcy Rule Changes are Almost Here – and You Should Care

You have been reading for months that the U.S. Supreme Court approved amendments to the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) that go into effect on December 1, 2017.  You also may have ignored these changes because they affect Chapter 13 consumer cases and may not impact your commercial bankruptcy practice. Right? Wrong.  … Continue Reading

Secured Lenders Take Note: Second Circuit Rejects Make-Whole Premiums But Opens The Door To Higher Interest Rates

As they say, what one hand giveth, the other hand taketh. In its recent decision in In re MPM Silicones, LLC, the U.S. Court of Appeals for the Second Circuit addressed make-whole premiums and cramdown rates of interest (among other issues not addressed here), issuing rulings that will impact creditors and debtors alike. Not only … Continue Reading

Blockchain: Buying a Property in 60 seconds…

In a recently published article, John Danahy, a real estate partner in Squire Patton Boggs’ London office, explores transactions of the future using cryptocurrencies, blockchains and “data vaults”containing both personal and property information.  Restructuring and insolvency professionals will need to keep up to date on these developments which will have an impact not only on … Continue Reading

Are You Breaking Up with Me? Termination Fees in Bankruptcy Called into Question.

In a move that surprised bankruptcy practitioners and other observers, a Delaware bankruptcy court recently rescinded an order approving a $275 million break-up fee relating to a failed merger.  Judge Christopher Sontchi held that Debtor Energy Future Holdings could not pay the merger termination fee to NextEra Energy, the prospective buyer of nondebtor subsidiary, Oncor … Continue Reading

First Circuit Holds Creditors Committees Always Have the Right to Intervene (Sort Of)

On September 22, 2017, the First Circuit Court of Appeals reversed the district court, and overruled its own prior guidance, to hold that a committee of unsecured creditors had the right to be heard in adversary proceedings related to the restructuring of Puerto Rico’s debt.  The Court’s decision in Assured Guar. Corp. v. Fin. Oversight … Continue Reading

Blockchain: Banks Are Taking Back Control – Time for the Real Estate Industry to Do the Same?

In a recently published article, John Danahy, a real estate partner based in Squire Patton Boggs’ London office, explores the development of a new cryptocurrency and its impact on the worlds of finance and global real estate. Of particular relevance to restructuring and insolvency professionals is the use of so-called “blockchains” in title transfers and … Continue Reading

The Interminable ‘Insured vs. Insured’ Battle

In an article just published in the Bankruptcy Strategist, Norman Kinel and Elliot Smith explore the practical impact of the Sixth Circuit Court of Appeal’s recent decision in Indian Harbor Insurance Company v. Zucker, et al., 2017 U.S. App. LEXIS 10821, which bankruptcy practitioners – particularly those representing creditors’ committees – need to consider, because … Continue Reading

“Insured Versus Insured” – – Who is the Debtor-in-Possession, Anyway

In a decision rendered earlier this year by the Sixth Circuit Court of Appeals, the court examined the difference between a debtor and a debtor-in-possession in the context of the “insured verses insured” exclusion contained in a D&O liability policy. Indian Harbor Insurance Company v. Zucker, et al, arose in connection with the bankruptcy case … Continue Reading

Sentinel Management – The Seventh Circuit Sides With Trust Beneficiaries

In its fifth trip to the Seventh Circuit Court of Appeals, the Sentinel Management Group’s bankruptcy case recently explored complex issues bankruptcy practitioners often encounter in large chapter 11 cases with financial services debtors.  In a far-ranging opinion, the Seventh Circuit held that the Bankruptcy Court’s oral “clarification” of an earlier order, which had already … Continue Reading

Mass Layoffs When Section 363 Sales Fail and Cases Convert: Third Circuit Adopts Probability Standard for WARN Act Liability

On August 4, 2017, the Third Circuit Court of Appeals issued its ruling in Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 2017 U.S. App. LEXIS 14359 (3d Cir. 2017), holding that WARN Act liability is triggered only when a mass layoff becomes probable – “that is, when the objective facts reflect that … Continue Reading

Lessees Left in Limbo

Do a lessee’s possessory interests in real property survive a “free and clear” sale of the property under section 363 of the Bankruptcy Code? In a recent decision, the Ninth Circuit Court of Appeals said “no,” holding that section 365(h) did not protect the interest of the lessee in the context of a section 363 … Continue Reading