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November 2020

ANAND LAW PC > 2020 > November

No longer need all that space? Termination of Leases in Bankruptcy

[vc_row triangle_shape="no"][vc_column][vc_column_text]What happens to a lease agreement after filing for bankruptcy? Does it automatically terminate or must the obligations in the agreement be upheld?[/vc_column_text][vc_empty_space][vc_column_text] THE AUTOMATIC STAY [/vc_column_text][vc_empty_space][vc_column_text] Immediately upon the filing of a bankruptcy petition, an “Automatic Stay” goes into effect which prevents creditors such as landlords from commencing eviction proceedings, continuing an eviction proceeding, or collecting past due rent. [/vc_column_text][vc_empty_space][vc_column_text] TENANT PROTECTIONS [/vc_column_text][vc_empty_space][vc_column_text] In addition to this protection, a debtor may also “assume” or “reject” an unexpired lease with court approval. Under a Chapter 11 or a Chapter 13 bankruptcy proceeding, there is no fixed amount of time in which the debtor must reject a...

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NEWS : Guitar Center Files for Chapter 11, Ironically as Sales of Guitars Soar

[vc_row triangle_shape="no"][vc_column][vc_column_text] NEWS : Guitar Center Files for Chapter 11 Bankruptcy Protection As Sales of Fender, Taylor, Gibson Guitars Boom The Filing Comes One Week After a Massive Debt-Restructuring Agreement [/vc_column_text][vc_empty_space][vc_column_text] A week ago, Guitar Center announced a debt restructuring agreement which is planned to slash $1.3 billion debt by nearly $800 million.  The Chapter 11 filing indicates that the company seeks to obtain $375 million in Debtor-In-Possession financing from existing note holders and lenders, and an additional $335 million in new secured loans. The company says it will continue operating as normal (as normal as it was in 2020 -- with a majority of its 300...

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The Absolute Priority Rule and the “New Value” Exception

[vc_row triangle_shape="no"][vc_column][vc_column_text]In a Chapter 11 bankruptcy proceeding, if a company or individual filer (the “debtor”) is unable to pay its creditors in full, the absolute priority rule bars owners from retaining their interests unless the owners contribute “new value” to the business.[/vc_column_text][vc_empty_space][vc_column_text] The Absolute Priority Rule [/vc_column_text][vc_empty_space][vc_column_text] The absolute priority rule is codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code. This section requires that for a reorganization plan to be fair and equitable “the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim...

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Guidance on the Supreme Court’s Decision in USPTO v. BOOKING.COM

[vc_row triangle_shape="no"][vc_column][vc_column_text] The United States Patent and Trademark Office (“USPTO”) has issued Examination Guide 3-20, which provides guidance on “Generic.com Terms after USPTO v. Booking.com” In June 2020, the Supreme Court reversed decisions of USPTO, rejecting a rule that a mark which consists of the combination of a generic term and a generic top-level domain (like “.com”) is automatically generic.  The USPTO had held that the proposed mark BOOKING.COM was generic as applied to the identified hotel reservation services, or, in the alternative, was merely descriptive and had not acquired distinctiveness.  The USPTO had been affirmed by the Trademark Trial and Appeals...

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