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Notice Requirement Clarified for Successor Liability Protection in Chapter 11 Asset Sale Orders
A bankruptcy court's asset sale order limiting specific pre-bankruptcy product liability claims required prior “actual or direct mail notice” to claimants when the debtor “knew or reasonably should have known about the claims,” held the U.S. Court of Appeals for the Second Circuit on July 13, 2016. In re Motors Liquidation Co., 2016 U.S. App. LEXIS 12848, *46-47 (2d Cir. July 13, 2016).
“[M]ere publication notice” to known or knowable claimants, explained the court, was insufficient when the debtor sought to enforce a “free and clear” provision in a “Sale Order” insulating the asset buyer from successor liability based on tort claims “that ' could have been brought against” the debtor-seller. Id. at *26-27. Had the requisite notice been given, though, the Sale Order (and the buyer's protection against successor liability) would probably have been enforceable. See Bankruptcy Code (Code) ' 363(f)(1) (sale may be made “free and clear of any interest in such property”); In re Chrysler LLC, 576 F. 3d 108, 126 (2d Cir. 2009) (successor liability claims are interests), vacated as moot, 558 U.S. 1087 (2009).
The bankruptcy court properly found that the debtor “should have provided direct mail notice to ' [known] owners” of defective vehicles, said the Second Circuit, but erred in holding that “plaintiffs were not prejudiced ' because [it] would have approved the Sale Order even if plaintiffs [had been] provided adequate notice.” According to the bankruptcy court, these plaintiffs would not have “succeeded on [their] successor liability argument” and their “other arguments were 'too speculative.'” Id. at *58. But the Second Circuit disagreed, holding that “enforcing the Sale Order [so as to insulate the asset buyer from liability] would violate procedural due process” because, with adequate notice, the “plaintiffs could have had some negotiating leverage [regarding the terms of any sale order] ' and [a meaningful] opportunity to participate in the proceedings.” Id. at *61.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
"Holy Fair Use, Batman": Copyright, Fair Use and the Dark Knight
The copyright for the original versions of Winnie the Pooh and Mickey Mouse have expired. Now, members of the public can create — and are busy creating — their own works based on these beloved characters. Suppose, though, we want to tell stories using Batman for which the copyright does not expire until 2035. We'll review five hypothetical works inspired by the original Batman comic and analyze them under fair use.