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Bankruptcy Code § 365(n) provides significant protections to licensees under intellectual property licenses that are rejected by debtor-licensors.[1] Section 365(n) permits a licensee to retain its rights in licensed intellectual property post-rejection in exchange for the continued payment of royalties.[2] Where the licensee elects to retain its rights, the debtor-licensor has no continuing obligations under the license.[3]

[1]In the latest installment of the Lehman Brothers subordination litigation, the U.S. Bankruptcy Court for the Southern District of New York held that certain creditors’ claims were not claims for damages arising from “securities of the debtor,” and did not have to be subordinated to claims of creditors, notwithstanding that the debtor was treated as an issuer, for regulatory purposes, as an issuer of the mortgage-backed securities.[2]

The secondary bankruptcy claims market has become big business over the past several years, resulting in a proliferation of court rulings that underscore risks and “regulation” around claims-trading, especially when claims are purchased for strategic objectives and not anticipated cash recovery. Commentators have reviewed the decisions of In re KB Toys Inc.,[1] Dish Network Corp. v. DBSD N. Am. Inc. (In re DBSD N. Am.

[1]Over the years, claims-trading has become the norm in bankruptcy cases. Claims are bought and sold for various reasons, including to liquidate a position, profit from an increase in the claim’s value and/or leverage a claim into the ownership of the debtor. Regardless of the reason, litigation has arisen as to whether the buyer of a claim will be subject to the same attacks as the original claim owner. Based upon recent case law, the courts seem to be saying “yes.”

Editor’s Note: This two-part article discusses how the U.K. and U.S. have become the two main jurisdictions where debtors outside of such jurisdictions (foreign debtors) have been able to successfully restructure their businesses. Due to the flexibility of both legal systems and their shared focus on reorganization as opposed to liquidation, which often would be the outcome of the debtors’ domestic insolvency process, foreign debtors have used the U.K. or the U.S. legal systems to successfully restructure.

The “presumption against extraterritoriality” is a statutory canon of construction that embodies the “longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.”[1] Stated simply, it provides that “[w]hen a statute gives no clear indication of an extraterritorial application, it has none.”

[1]A powerful and commonly utilized tool in a restructuring is the commencement by a company of an insolvency proceeding, whether under the Bankruptcy Code or analogous law, in order to achieve desired changes to its capital structure and/or operations. However, there are certain instances where, due to legal or commercial reasons, the use of an insolvency proceeding is not available.

Editor’s Note: The following article, “Loehmann’s Department Store: A Case Study Questioning the § 365(d)(4) Liquidation Narrative Following BAPCPA,” won the prize for third place in the Sixth Annual ABI Bankruptcy Law Student Writing Competition. The author, Brian Phillips, is a student at University of North Carolina School of Law, Chapel Hill, N.C. In addition to recognition and publication of his article in the Business Reorganization Committee Newsletter, Mr.

Editor's Note: The following article, "Bridging the Gap: Receivership and the Absence of Discipline in Chapter 9," won the prize for second place in the Sixth Annual ABI Bankruptcy Law Student Writing Competition. The author, Randall Thomas, is a student at New York University School of Law. In addition to recognition and publication of his article in the Business Reorganization Committee Newsletter, Mr.

In certain situations, the sale of an operating entity as a going concern in a receivership proceeding is a viable alternative to seeking relief under the Bankruptcy Code. Receivership going-concern sales may be especially appropriate in complex situations where enterprise value is declining, but the company is not hopelessly insolvent. This article briefly highlights those conditions, factors, situations and circumstances that may contribute to or impede a successful going-concern transaction within a court-supervised commercial receivership.