What You Need to Know About the PPEBA
April 27, 2006
The union of the Internet and commerce has lead to increases in productivity, convenience, and access for consumers everywhere. At the same time, it has spawned tremendous privacy concerns. It is not uncommon these days to hear of businesses inadvertently publicizing consumers' personal data, or worse, hackers obtaining personal financial information.
First and Second Liens
April 27, 2006
One of the leading issues currently faced by bankruptcy practitioners can be found in the frequently recurring disputes between first and second lienholders ' an issue that was recently addressed in the context of a ' 363 sale. In <i>Contrarian Funds, LLC v. Westpoint Stevens, Inc.</i> (<i>In re Westpoint Stevens, Inc.</i>), 333 B.R. 30 (S.D.N.Y. 2005), the United States District Court for the Southern District of New York (the District Court) reversed a ' 363(b) sale order (Sale Order) of the bankruptcy court on the grounds that the Sale Order authorized an in-kind distribution of equities ' rather than cash ' to first lien holders outside the Chapter 11 plan confirmation process.
The Calpine Case
April 27, 2006
When is an executory contract not just an executory contract? When it's also a regulation, of course. So ruled Judge Richard Casey of the District Court for the Southern District of New York in <i>In re Calpine</i>, 337 B.R. 27 (S.D.N.Y. Jan. 27, 2006), dismissing Calpine's request for authority to reject under 11 U.S.C. ' 365 certain regulated wholesale power supply contracts that fall within the exclusive jurisdiction of a federal administrative agency. Casey's decision and the subsequent appeal to the Second Circuit Court of Appeals, where the case is currently pending, culminate a 3-month legal sprint through the executive and judicial branches of government in a case that pits the authority of the judiciary against the jurisdiction of the Federal Energy Regulatory Commission (FERC) ' the administrative agency tasked with regulating the wholesale sale and transmission of electric power.
Bankruptcy Court Subject Matter Jurisdiction
March 29, 2006
In the January, 2006, issue of <i>The Bankruptcy Strategist</i>, we discussed the impact of two recent bankruptcy opinions out of the Delaware Court: <i>IT Litigation Trust v. D'Aniella et al.</i> (<i>In re: IT Group, Inc. et al.</i>) and <i>Shandler v. DLJ Merchant Banking, Inc., et al.M.</i> (<i>In re Insilco Technologies, Inc.</i>). We included a brief update in the February, 2006 issue after the Delaware courts weighed in on the subject for the third time in only 3 months. Now we discuss, in depth, the possible implications of <i>Insilco</i> and <i>IT Group</i> on plan structuring.
Recharacterizing Debt
March 29, 2006
The first half of this article, which appeared in last month's issue, discussed the purpose and effect of recharacterization of debt to equity, distinguished recharacterziation from equitable subordination, and reviewed various approaches, including multi-factor tests, that different courts have employed in determining whether to recharacterize a claim in bankruptcy and non-bankruptcy contexts. This concluding installment explores further the Third Circuit Court of Appeals' decision in <i>In re SubMicron Systems Corporation, et al.</i>, 432 F.3d 448 (3d Cir. 2006) and discusses lessons learned from that case.
Debtors Cannot Assume or Assign Trademark License Without Licensor's Consent
March 29, 2006
Trademarks serve as symbols of good will and are a valuable asset of the business associated with the mark. Not surprisingly, trademark licenses typically require the licensor's consent for assignments, because licensors want the right to pass on the abilities of new potential licensees. In the event of bankruptcy filing by the licensee, the contractual restriction on assignment is ordinarily unenforceable. <i>See</i> 11 U.S.C. ' 365(f)(1). Bankruptcy Code ' 365(c)(1), however, provides an exception to this general rule: a debtor may not 'assume or assign' any executory contract without consent of the non-debtor if 'applicable law' provides that the non-debtor can refuse to accept performance from a third party.
Integrating Software Escrows into Intellectual Property Strategy
March 01, 2006
Software developers invest a great deal of time and effort developing complex code that performs unique functionality for which there is a viable market. These software developers typically offer software licenses that only license object code, <i>ie</i>, the code that can be read by a machine, rather than the source code, <i>ie</i>, code that can be deciphered and read by a person.
Are Attorneys 'Debt Relief Agencies' Under The BAPCPA?
February 27, 2006
According to the newly enacted Bankruptcy Abuse Pre-vention and Consumer Protection Act of 2005 (BAPCPA), attorneys practicing bankruptcy law may in fact be required to identify themselves as debt relief agencies. One of the new and significant aspects of the BAPCPA are the provisions designed to restrict and monitor the activities of so-called "debt relief agencies." Among other requirements, Section 528(a)(4) mandates that a "debt relief agency shall ... clearly and conspicuously use the following statement in such advertisement: 'We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.' or a substantially similar statement." See generally Sections 526, 527 and 528 for the restrictions on and requirements for debt relief agencies. However, who and what a debt relief agency is, and more specifically, whether attorneys are debt relief agencies, remains a matter of great debate, dispute and confusion.
