Committees
Bankruptcy Code § 365(n) provides significant protections to licensees under intellectual property licenses that are rejected by debtor-licensors.[1] Section 365(n) permits a licensee to retain its rights in licensed intellectual property post-rejection in exchange for the continued payment of royalties.
[1]In the latest installment of the Lehman Brothers subordination litigation, the U.S. Bankruptcy Court for the Southern District of New York held that certain creditors’ claims were not claims for damages arising from “securities of the debtor,” and did not have to be subordinated to claims of creditors, notwithstanding that the debtor was treated as an issuer, for regulatory purposes, as an issuer of the mortgage-backed securities.[2]
The secondary bankruptcy claims market has become big business over the past several years, resulting in a proliferation of court rulings that underscore risks and “regulation” around claims-trading, especially when claims are purchased for strategic objectives and not anticipated cash recovery.
[1]Over the years, claims-trading has become the norm in bankruptcy cases. Claims are bought and sold for various reasons, including to liquidate a position, profit from an increase in the claim’s value and/or leverage a claim into the ownership of the debtor.
Editor’s Note: This two-part article discusses how the U.K. and U.S. have become the two main jurisdictions where debtors outside of such jurisdictions (foreign debtors) have been able to successfully restructure their businesses.
The “presumption against extraterritoriality” is a statutory canon of construction that embodies the “longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.”[1] Stated simply, it provides that “[w]hen a statu
[1]A powerful and commonly utilized tool in a restructuring is the commencement by a company of an insolvency proceeding, whether under the Bankruptcy Code or analogous law, in order to achieve desired changes to its capital structure and/or operations.
Editor’s Note: The following article, “Loehmann’s Department Store: A Case Study Questioning the § 365(d)(4) Liquidation Narrative Following BAPCPA,” won the prize for third place in the Sixth Annual ABI Bankruptcy Law Student Writing Competition. The author, Brian Phillips, is a student at University of North Carolina School of Law, Chapel Hill, N.C.
Editor's Note: The following article, "Bridging the Gap: Receivership and the Absence of Discipline in Chapter 9," won the prize for second place in the Sixth Annual ABI Bankruptcy Law Student Writing Competition. The author, Randall Thomas, is a student at New York University School of Law.