The Delaware Bankruptcy Court has recently adopted amended Local Rules, which became effective on February 1, 2008, and they include meaningful changes to the procedures governing Section 363 sales of assets. New Local Rule 6004-1, entitled "Sale and Sale Procedures Motions," requires additional disclosure and the highlighting of certain key provisions often seen in sale
executory contract
Don’t Miss The Important Business Bankruptcy Rule Amendments That Just Took Effect
On December 1st of almost every year, amendments to the Federal Rules of Bankruptcy Procedure — the ones that govern how bankruptcy cases are managed — take effect to address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. Often the changes are relatively minor and of interest only…
A Fly In The Ointment: Sale Of Property May Cut Off Landlord’s Section 502(b)(6) Lease Rejection Claim For Future Rent
Here’s a scenario frequently seen in Chapter 11 cases. A tenant files bankruptcy and rejects a commercial real estate lease. The landlord files an unsecured lease rejection claim seeking to recover the lost future rent under the rejected lease. The claim amount is capped by Bankruptcy Code Section 502(b)(6) but may still be one of the…
The Bull Rips A Hole In The Matador’s Cape: New Ninth Circuit Decision Limits Reach Of Section 502(b)(6)’s Landlord Cap
A commercial real estate lease often represents the largest single liability of many debtors. For retailers, which typically have scores or even hundreds of store leases, the liability involved is orders of magnitude larger. It’s fair to say that the management of lease obligations can be of enormous consequence to debtors, landlords, and other creditors in…
Are “Termination On Bankruptcy” Contract Clauses Enforceable?
Practically every contract has a provision that makes the bankruptcy or insolvency of one contracting party a trigger for the other party to terminate the contract. These are standard fare and rarely negotiated unless they also include a provision for the reversion back of ownership of property, often intellectual property, upon bankruptcy or insolvency. This post takes a…
Another Court Follows The Footstar Decision On Assumption Of IP Licenses In Bankruptcy
Intellectual property licenses continue to be significant to companies across a wide range of industries. This fact makes their treatment in business bankruptcy cases a topic of keen interest.
Can A Debtor Licensee Retain IP License Rights? When the debtor in possession is a licensee under a patent, copyright, or trademark license, a key question arises: Can…
The “Ride Through” Doctrine Rides Again: Ninth Circuit BAP Lets A License Agreement Ride Through Chapter 11
In a June 18, 2007 decision in In re J.Z. L.L.C. (available here), the Bankruptcy Appellate Panel (BAP) of the U.S. Court of Appeals for the Ninth Circuit faced an interesting question: Did the so-called "ride through" doctrine from the old Bankruptcy Act of 1898 survive enactment of the Bankruptcy Code in…
Assumption Of Intellectual Property Licenses In Bankruptcy: Are Recent Cases Tilting Toward Debtors?
Executory contracts present a host of interesting issues in bankruptcy cases. This is especially true when the executory contract involves a license of intellectual property (or "IP"). In the past I’ve devoted several posts to the topic, including how IP licenses are treated in bankruptcy and the unique issues presented when a trademark licensee or trademark licensor files bankruptcy.
In…
New Article Examines Interplay Between Bankruptcy and Intellectual Property Law
Peter S. Menell, a Professor of Law at the University of California, Berkeley, School of Law (Boalt Hall) and the Director of the Berkeley Center for Law and Technology, is a highly regarded expert on intellectual property law. I wanted to let you know that he’s just posted a very interesting and comprehensive article on…
Bankruptcy Asset Sales: What Parties With Contracts Should Watch For
In many corporate bankruptcy cases, the debtor will use the bankruptcy process to sell its assets and to assume and assign valuable leases, executory contracts, and licenses (see earlier posts on what happens to leases in bankruptcy, to executory contracts, and to intellectual property licenses, a special type of executory contract).
This post discusses some…