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Supreme Court justices grappled yesterday with a question at the intersection of bankruptcy and trademark law that has split the circuits and stumped Congress, the National Law Journal reported.The question posed by Mission Product Holdings v. Tempnology is what happens when a bankrupt entity “rejects” its trademark licenses. New Hampshire-based Tempnology LLC argues that the licenses are swept into the bankruptcy estate as would any other “executory” contract, leaving the licensee with a pre-petition claim for damages that’s typically worth pennies on the dollar. New York-based Mission Products Holdings Inc. and a squadron of amici curiae are calling on the Supreme Court to adopt the Seventh Circuit’s position that licensees should be free to continue using the marks they’ve bargained for and, in many cases, invested their own money in. Assistant to the Solicitor General Zachary Tripp asked the justices to imagine a McDonald’s franchisee who spends millions developing a restaurant. Under the rule adopted by the First Circuit in this case, “they can pull the rug out from under every single one of its franchisees and basically put them to an extortionate choice between paying a higher royalty payment or shutting down their business and firing all their workers.” Read more. 

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Women’s fashion retailer Charlotte Russe Holdings Corp. is still searching for a buyer that can purchase the cash-strapped chain out of bankruptcy, but is preparing to liquidate if it can’t find a deal in the next couple of weeks to save the business, the Wall Street Journal reported. Charlotte Russe has signed a stalking-horse agreement with liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC, according to papers the company filed on Tuesday in the U.S. Bankruptcy Court in Wilmington, Del. The agreement with liquidators, which is subject to higher bids, starts the clock on a crucial two-week window that likely will determine the fate of Charlotte Russe. The company could close the chain if a buyer doesn’t place a better bid to keep the retailer operating out of bankruptcy as a going concern.

A bankruptcy judge has rejected the proposed sale of the Palm House Hotel to a former owner who claimed a $37.3 million secured interest in the unfinished hotel-condominium in tony Palm Beach, Law.com reported. A dispute between the owner and a key creditor KK-PB Financial LLC, which is managed by Wellington developer Glenn Straub, has jammed up the proceedings on a property tainted by civil allegations of EB-5 investment visa fraud. The owner and debtor, 160 Royal Palm LLC, filed for chapter 11 protection last August, putting the Palm House Hotel in line for auction. KK-PB Financial wants to place a credit bid, saying it holds a senior mortgage on the property where a 79-unit development was planned. Straub bought the property at auction for $10 million in 2009 and sold his membership interest in the company in 2013. KK-PB Financial maintains 160 Royal Palm defaulted on the $27.5 million mortgage issued with the 2013 sale and now claims a security interest of $37.3 million. The stalking horse bid for the bankruptcy auction is $32 million. KK-PB asked U.S. Bankruptcy Judge Erik Kimball to estimate its secured claim to get a credit from the auction. 160 Royal Palm’s court-appointed manager Cary Glickstein, a former Delray Beach mayor, responded by asking the court to limit KK-PB’s ability to credit bid.

The chief restructuring officer in charge of the Sears bankruptcy said Wednesday that the company's proposed sale to its controversial chairman and ex-CEO would be a better deal for creditors, workers and vendors than liquidation, USA Today reported. Mohsin Meghji, who was appointed as the Sears restructuring chief when Chairman Eddie Lampert resigned as CEO in October, defended the retailer's plan to sell itself in shrunken form to Lampert's ESL Investments. Meghji testified in bankruptcy court on the second day of a hearing to decide the retailer's fate that he had analyzed the difference between a deal to sell Sears to ESL and an alternative move to liquidate the company. A committee of unsecured creditors that is seeking the liquidation of Sears disagreed with Meghji's conclusion, questioning ESL's intentions and the structuring of the deal, saying it appeared to primarily benefit Lampert.

South Carolina-based Life Settlements Absolute Return I LLC has found a buyer for its portfolio of life-insurance policies, which it holds as an investment bet on how long aging people who originally took out those policies will live, WSJ Pro Bankruptcy reported. In court papers, Life Settlements Absolute Return officials said that the $5.65 million offer from BPCP Life Settlement LLC would transfer “ownership of the business to a financially stable buyer” that can continue to make policy payments. The deal still needs approval from a bankruptcy judge. The Greenville, S.C., firm, which used pension fund money to invest in the life-settlements market, filed for bankruptcy in the U.S. Bankruptcy Court in Wilmington, Del., on Dec. 29, 2017, running low on money to make payments that would prevent life-insurance policies from expiring. Shortly after filing, several potential portfolio buyers contacted the firm’s lawyers, according to court documents. Life Settlements Absolute Return officials asked Judge Mary Walrath to hold a scheduling hearing on Feb. 19 to determine a bid deadline for other potential buyers and an auction date if multiple bids come in.

Two of the world’s largest precious metals refiners, Valcambi and Asahi, are separately bidding for the assets of their bankrupt Miami-based rival Republic Metals Corp. (RMC), Reuters reported. The two companies will go head to head in an auction in a New York bankruptcy court today. RMC is one North America’s largest precious metals refineries and filed for bankruptcy in November. RMC refines gold and silver and also processes carbon. Other bidders have made offers for the carbon assets, while Valcambi and Asahi have bid for the entire company.

Walgreens Boots Alliance Inc. has been named the successful bidder at about half of the approximately 120 pharmacies at which bankrupt retailer Shopko auctioned off assets a few days ago, the Wall Street Journal reported. Agreements have been signed, or are in the process of being signed, that are expected to generate $52 million in pharmacy auction proceeds for Shopko, the company said on Saturday. A Walgreens spokesman said on Saturday that the company was pleased with the auction results and, pending the sales’ approval by the bankruptcy court, looks forward to welcoming Shopko customers to the chain’s pharmacies. A hearing to approve the sales to the successful bidders is expected to be held Monday in U.S. Bankruptcy Court in Omaha, Neb. An auction for Shopko’s pharmacy assets, including prescription inventories, records, customer lists and patient profiles, was held on Wednesday in the Chicago office of Kirkland & Ellis LLP, one of the law firms representing the general-merchandise chain since it filed for bankruptcy earlier this month.