Tagged: Bankruptcy

Non-Settling Insurers Now Have a Seat at the Bankruptcy Table

Justice Sonia Sotomayor delivered the Supreme Court’s unanimous opinion1 in Truck Insurance Exchange v. Kaiser Gypsum Company, Inc., et al. (Case No. 22-1079) (“Kaiser Gypsum”). Reversing the opinion of the United States Court of Appeals for the Fourth Circuit in In re Kaiser Gypsum Co., Inc., 60 F.4th 73 (4th Cir. 2023), the Court held that, pursuant to section 1109(b) of the Bankruptcy Code, “[a]n insurer with financial responsibility for a bankruptcy claim is sufficiently concerned with, or affected by, the proceedings to be a ‘party in interest’ that can raise objections to a reorganization plan.” In doing so, the Court rejected, as “conceptually wrong” and making “little practical sense,” the “insurance neutrality” doctrine that denies insurers the status of parties in interest in confirmation-related matters if the proposed plan neither increases the insurer’s pre-petition obligations nor impairs its rights under the insurance policies it has issued to the debtors. Kaiser Gypsum is an asbestos mass tort Chapter 11 case. A plan of reorganization (“KG Plan”) was confirmed on September 12, 2021. The KG plan provided, inter alia, for uninsured claims to be administered by an asbestos claims trust (“KG Asbestos Trust”), while insured claims were to be resolved through the tort system and paid (less a small deductible) by the debtors’ primary liability insurer,...

Gibbons Recognized as a Leading Firm in 2022 ‘Chambers USA Guide’

The 2022 edition of the Chambers USA Guide to America’s Leading Lawyers for Business features the highest numbers of Gibbons P.C. practices and attorneys ever ranked in the publication in one year. The 2022 guide recognized 12 Gibbons practice areas, with 27 firm attorneys earning individual rankings. Three attorneys and one practice were selected for the first time this year. One of the legal industry’s leading client- and peer-review resources, Chambers annually rates the nation’s leading business lawyers and law firms through both comprehensive interviews with top companies, attorneys, and business executives, and extensive supplementary research. For the full list of Gibbons practice areas and attorneys highlighted in the 2022 guide, please click here.

Breaking Bankruptcy News: Subchapter V Debt Limit Extension

On February 25, 2021, Sen. Richard Durbin (D-IL) and Sen. Charles Grassley (R-IA), the Chair and Ranking Member of the U.S. Senate Judiciary Committee, respectively, announced the introduction of a bipartisan bill that will provide continued relief to businesses impacted by the ongoing COVID-19 pandemic. The bill, referred to as the COVID-19 Bankruptcy Relief Extension Act, would extend for an additional year—to March 27, 2022—certain bankruptcy-related provisions originally enacted into law in March 2020 as part of the Coronavirus Aid, Relief, and Economic Stabilization Act (“CARES Act”). Under the CARES Act passed on March 27, 2020, Congress increased to $7.5 million the debt limits for debtors seeking relief under the recently-enacted Subchapter V of chapter 11 of the Bankruptcy Code. 11 U.S.C. §§ 1181-1195 (Subchapter V, enacted in 2019 through the Small Business Reorganization Act, streamlined chapter 11 cases for businesses with non-contingent, secured, and unsecured debts totaling less than $2,725,625. By proceeding under Subchapter V of the Bankruptcy Code, a debtor may, among other things, solicit disclosure and confirmation in a single-step confirmation process, make use of expedited filing deadlines, and retain equity ownership without those equity holders satisfying the “new value” exception to the absolute priority rule under 11 U.S.C. § 1129(b)). If passed, the COVID-19 Bankruptcy Relief Extension Act will ensure that...

Reversing the First Circuit, the Supreme Court Holds That Rejection of an Executory Trademark License Does Not Bar the Licensee From Continuing to Use the Mark

In Mission Product Holdings v. Tempnology, the Supreme Court, in an 8-1 opinion delivered by Justice Kagan, held that a debtor’s rejection of a trademark license under Section 365 of the Bankruptcy Code does not terminate the licensee’s rights to use the trademark under the agreement. Tempnology made clothing and accessories designed to stay cool during exercise, and marketed those products under the brand name “Coolcore.” In 2012, Tempnology gave Mission Product Holdings an exclusive license to distribute certain Coolcore products in the United States and granted Mission a non-exclusive global license to use the Coolcore trademarks. The agreement was set to expire in July 2016. In September 2015, however, Tempnology filed for relief under Chapter 11 of the Bankruptcy Code, and rejected the license agreement under Section 365(a). The Bankruptcy Court held that Tempnology’s rejection of the agreement revoked Mission’s right to use the marks. The Bankruptcy Appellate Panel reversed. The First Circuit rejected the Bankruptcy Appellate Panel’s view and reinstated the Bankruptcy Court’s decision. The First Circuit reasoned that Congress, in enacting Section 365(n) in 1988, “expressly listed six kinds of intellectual property,” but not trademarks. The First Circuit thus held that trademark licenses are categorically unprotected from court-approved rejection. The Supreme Court granted certiorari, and reversed the First Circuit. Section 365(a) of...

Tenth Circuit finds that Ch. 11 Bankruptcy Debtor’s Settlement of CERCLA Claims No Bar to Post-Reorganization Contribution Action Against Other PRPs

The Tenth Circuit recently ruled in Asarco, LLC v. Noranda Mining, Inc. that a mining company (“Plaintiff”) could maintain a contribution action against another mining operation (“Defendant”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) despite the Plaintiff’s earlier representation in Bankruptcy proceedings that its fair share of liability for contamination at the site in question was $8.7 million — the amount it paid to settle the Environmental Protection Agency’s claim. The pertinent facts arose, largely, from the Plaintiff’s Chapter 11 Bankruptcy and a global settlement of all environmental claims. The global settlement, reached in 2009, resolved environmental claims at 52 different sites across 19 states, with a total cost of about $1.79 billion. Included among the myriad claims being settled was the one at issue in this case: an $8.7 million payment to address the Plaintiff’s share of liability at two related sites near Park City, Utah (“the site”). Defending the reasonableness of the settlement figure before the Bankruptcy Court, the Plaintiff maintained that $8.7 million represented its proportionate share of liability for contamination at the site. In 2013, following its Chapter 11 reorganization, the Plaintiff filed a CERCLA contribution claim against the Defendant, another potentially responsible party at the site, arguing that the $8.7 million it paid to settle the EPA’s...

IP Licenses in Bankruptcy Webinar!

The recently announced Kodak bankruptcy has focused much needed attention on the intersection of bankruptcy law with IP rights. Gibbons P.C., with robust bankruptcy and IP practices, will be participating in a live webinar on Tuesday, February 21, 2012 from 1:00 – 2:30 pm to address the impact of the Bankruptcy Code on IP licenses. The webinar will feature an update on case law developments and practical tips for dealing with IP licenses in a bankruptcy. Participants will be invited to a live Q & A session with the speakers at the end of the panel discussion. CLE credit will be available.

IP and Chapter 11 Intersection: Kodak Files for Bankruptcy

As anticipated, Eastman Kodak Co. filed a petition for Chapter 11 bankruptcy relief this morning in the United States Bankruptcy Court for the Southern District of New York. This development followed a recent flurry of patent infringement suits involving Kodak, and on the heels of Kodak’s unrequited efforts to license or sell off its substantial intellectual property (“IP”) portfolio.