Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Bankruptcy Filing May Not Prevent Enforcement of Non-Compete Against Franchisee
A U.S. district court recently held that a bankruptcy court abused its discretion in denying a franchisor's motion for relief from the U.S. Bankruptcy Code's automatic stay when the franchisee's bankruptcy petition was filed after the franchisor had previously filed litigation against the franchisee to enforce a covenant not to compete. See In re Stone Resources, Inc., 458 B.R. 823 (E.D. Pa. 2011). The district court's ruling is significant because it found that the relief that the franchisor sought ' the enforcement of the covenant not to compete ' could not be considered a “claim” that could be reduced to a claim for money damages in bankruptcy and thus was immune from the effects of the automatic stay.
This issue ' whether a non-competition covenant violation by a bankrupt franchisee can be remedied by a “claim” for money damages, or whether it can be addressed only through an equitable remedy such as an injunction ' has arisen frequently in bankruptcy cases and is important for a number of reasons. First, the characterization of a franchisor's cause of action will often determine the forum in which it is heard. Second, timing can be affected by the characterization of the claim. A claim for money damages addressed as part of the bankruptcy claims process may take a year or more to resolve, while an action for an equitable remedy usually can proceed immediately in the outside forum. Third, the franchisor's recovery on a claim for money damages resolved in the bankruptcy claims process typically may be heavily discounted to “cents on the dollar,” depending on case specifics. An equitable remedy, on the other hand, typically will be fully enforceable outside the bankruptcy process.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.