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A license agreement “deemed rejected by operation of law” could not be acquired under a court-approved asset purchase agreement, held the U.S. Court of Appeals for the Fifth Circuit on Oct. 29, 2018. In re Provider Meds, LLC, 2018 WL 5317445, 2 (5th Cir. Oct. 29, 2018). Although the acquirer claimed “that it purchased a patent license from [the] debtors in bankruptcy sales of their estates,” the court explained that “a rejected executory contract … could not have been transferred by the bankruptcy sales in question ….” Id., at 1. The court also declined to “approve of the use of a” bankruptcy court sale order “to avoid the requirement that an executory contract be assumed and assigned under” Bankruptcy Code (Code) §365. Id., at 9.
By Adam C. Rogoff
In today’s global economy, companies often have multiple business lines operating through separate entities. Outside of bankruptcy, these affiliated operations sometimes transact in a holistic — albeit legally distinct — debtor-creditor relationship with their counterparty. But, as this article discusses, the legal separateness of affiliates can hinder economic protections that a creditor might have otherwise when its counterparty files for bankruptcy.
By Joel H. Levitin, Richard A. Stieglitz Jr. and Stephen J. Gordon
Bankruptcy Provisions in First Lien/Second Lien Intercreditor Agreements
While intercreditor agreements (ICAs) are not necessarily the most attention-grabbing of the various loan documents common to large financing transactions, they are nevertheless important, and lack of attention to detail with respect to their provisions could lead to unintended results in any future bankruptcy case.
By Earl M. Forte
In January, a bench trial occurred in In re Covenant Partners, L.P., in which the Trustee of Debtor, Covenant Partners, L.P., sued for breach of fiduciary duty.
By Richard J. Mason
This article looks at some of the issues that may arise if a cryptocurrency exchange becomes a debtor in a case under the Bankruptcy Code.