Tagged: Abandonment

NJ Appellate Division Case Highlights Importance of Thorough Due Diligence Regarding Properties Containing “Abandoned” Railroad Lines

The conveyance of property containing embankments or former railroad facilities may invoke complicated title issues that could lead to significant costs and delays for real estate purchasers seeking to develop the property if such issues are not adequately addressed prior to the acquisition. On January 23, 2019, the New Jersey Appellate Division issued an unpublished decision in 212 Marin Boulevard, LLC, et al. v. Chicago Title Insurance Company and Consolidated Rail Corporation, concerning a party’s alleged misrepresentation about whether the conveyed embankment property was subject to the Surface Transportation Board’s (“STB”) abandonment authority. The STB is the federal agency established to oversee rate and service disputes for railways, as well as railway restructuring transactions, including abandonment of rail lines. Presumptively, any abandonment of rail lines by an entity regulated by the STB requires STB approval, unless excepted under federal statute. The seller, Consolidated Rail Corporation (“Conrail”), represented to Chicago Title Insurance Company (“Chicago Title”) that STB abandonment was not required, and Chicago Title, in apparent reliance on this statement, issued policies for the conveyed parcels when the purchaser closed on the property. Even so, the Appellate Division rejected Chicago Title’s third party complaint against Conrail for negligent misrepresentation. The decision should remind real estate developers to be wary of properties containing railroad lines, whether in...

Case Highlight: Spiro v. Vions Technology, Inc. – State Court Maintains Subject Matter Jurisdiction In Dispute Surrounding Intellectual Property Ownership Rights of A Now-Bankrupt Corporation

Intellectual property and bankruptcy disputes are matters typically reserved for the subject matter jurisdiction of the federal courts. However, in Spiro v. Vions Technology, Inc., C.A. No. 8287-VCP (Del. Ch. March 23, 2014) the Court of Chancery of the State of Delaware (“Chancery Court”) addressed a procedural question as to subject matter jurisdiction and held that where a debtor’s intellectual property and related licensing agreements had been abandoned by the bankruptcy trustee, the Chancery Court has subject matter jurisdiction over an action to determine, among other things, the ownership of such intellectual property. Specifically, plaintiff Spiro, a creditor in the bankruptcy action and a former shareholder of the bankrupt corporation, Ionsep Corporation Inc. (“Ionsep”), brought an action in the Chancery Court seeking, along with damages, that the Court: (i) void the exclusive licensing of the intellectual property as an allegedly fraudulent transfer, (ii) enjoin further licensing of the intellectual property by the licensee and (iii) return the intellectual property to the shareholders of Ionsep. Defendant Vions Technology Inc. (“Vions”), to which the intellectual property at issue had been transferred pre-bankruptcy, argued that Spiro had no standing to bring the fraudulent transfer action and that the bankruptcy court maintained jurisdiction over the intellectual property in question.