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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 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.
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.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
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.
Transfer Tax Implications on Real Property Leases
The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.