All items from In The (Red) Business Bankruptcy Blog

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The American Bankruptcy Institute‘s Commission to Study the Reform of Chapter 11 issued its report last week, capping more than two years of hearings, meetings, and hard work. Having had the honor of testifying before the Commission on intellectual property and bankruptcy issues at one of its hearings in New York in June 2013, I wanted to take a closer look at its intellectual property recommendations when a licensor or licensee files bankruptcy.
You can download the Commission’s entire report for all the details, but the Commission’s main IP recommendations address five key issues:



Posted 4 days 2 hours ago

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Almost every year, changes are made to the set of rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The changes address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others.
Rule Amendments. This year the rule amendments, which go into effect on December 1, 2014, mainly address bankruptcy appeals, as well as an important one on service of a summons (discussed below).



Posted 2 weeks 5 days ago

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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.
The latest example comes in the Crumbs Bake Shop, Inc. Chapter 11 bankruptcy case in New Jersey. On October 31, 2014, Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey rejected a motion by the buyer of the assets of Crumbs to clarify, among other things, that it purchased the Crumbs trademarks free of trademark licenses previously entered into by Crumbs. In a 22-page revised decision dated November 3, 2014, Judge Kaplan identified three issues facing the court:



Posted 5 weeks 5 days ago

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On Monday, October 6, 2014, the U.S. Supreme Court issued an order denying the petition for a writ of certiorari in the Jaffe v. Samsung case, also known as the Qimonda case. The Supreme Court let stand the Fourth Circuit’s December 2013 decision that affirmed the bankruptcy court’s order applying Bankruptcy Code Section 365(n) in a Chapter 15 cross-border bankruptcy case.



Posted 10 weeks 4 days ago

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I had the honor of being a panelist at the American Bankruptcy Institute‘s 22nd Annual Southwest Bankruptcy Conference last Friday, speaking on current developments in business bankruptcy. My part of the discussion focused on recent intellectual property and bankruptcy law trends. Among the topics I covered were:



Posted 14 weeks 4 days ago

Cooley Go
Cooley GO
Earlier this month, Cooley LLP launched Cooley GO, a terrific new resource center for entrepreneurs with businesses at all stages of the growth cycle. Cooley GO is a mobile-friendly microsite that provides a wide range of free legal and business content covering formation, financing, building a team, working with directors and advisors, intellectual property, M&A, IPOs and more.
I have the pleasure of being a contributor to Cooley GO. A new post I wrote called “A Key Customer Filed for Bankruptcy: Should You Keep Doing Business With Them?” is now on the Cooley GO site. To read the article just follow the link in the prior sentence.
Be sure to explore the full Cooley GO site. Among other tools, Cooley GO provides entrepreneurs with the ability to:



Posted 21 weeks 2 days ago

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It’s been several years since I last posted about objections to bankruptcy claims, and the topic is so important to creditors that it’s time to revisit it.
File And Forget? When a customer or other party with which you do business files bankruptcy, it’s important to file a proof of claim on time by the deadline (also known as a “bar date”) set in the case. Once you do, however, months or even years can go by before you hear anything more about your claim from the debtor, bankruptcy trustee, or other party responsible for reviewing claims and ultimately distributing money to creditors. In fact, the only thing you may hear about your claim for quite some time is an offer to purchase it made by one or more claims buyers.



Posted 24 weeks 4 days ago

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Image Courtesy of NobMouse
Ken Adams, Professor Adrian Walters, and I recently collaborated on an article about the ubiquitous “termination on bankruptcy” or ipso facto clauses in contracts. The article was just published by the American Bar Association’s Business Law Section in its online publication, Business Law Today. It’s titled “Termination-On-Bankruptcy Provisions: Some Proposed Language” and is available by following the link. You can also download a PDF of the article.



Posted 25 weeks 5 days ago

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U.S. District Court in San Francisco
Image Courtesy of Ken Lund
The Order Re Summary Judgment issued on June 11, 2014 by Judge Charles R. Breyer of the U.S. District Court for the Northern District of California in the Heller Ehrman LLP bankruptcy case may prove to be a knock-out punch against “unfinished business” claims by insolvent or bankrupt law firms and their trustees. Judge Breyer not only granted summary judgment to four law firms that hired former Heller partners and engaged former Heller clients, but he also distinguished and rejected the 1984 California Court of Appeal decision in Jewel v. Boxer, 156 Cal.App.3d 171 (1984), the case that for years has been the foundation for unfinished business claims involving California law firms.



Posted 26 weeks 4 days ago

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Image courtesy of  Kazuhisa Otsubo
Trademark Licenses At Risk. I have written a number of times on the blog about the impact of bankruptcy on trademark licenses, with a special focus on the risk that trademark licensees face if their licensors file bankruptcy. Trademark licensees have no protection under Section 365(n) of the Bankruptcy Code, and legislative efforts to give that protection have stalled. As a result, if a trademark license is determined to be executory and it’s rejected by the licensor or bankruptcy trustee, the licensee could find itself without any further rights to the trademark.



Posted 26 weeks 5 days ago