As discussed here, the US Supreme Court last term surprised many by deciding that the "plain meaning" of a bankruptcy statute must be filtered through a prism that, "in the main, secure[s] equal distribution among creditors [and] take[s] into account, as well, the complementary principle that preferential treatment of a class of creditors is in order only when clearly authorized by Congress."
Yesterday, as summarized in this post by Scott Riddle at the Georgia Bankruptcy Blog, the US Supreme Court ruled that provisions of the Bankruptcy Code that seemingly provide a debtor with an absolute right to do something (i.e., convert its case from chapter 7 to chapter 13) should be filtered through a lens that screens for the absence of "bad faith." Marrama v. Citizens Bank of Massachusetts, No. 05-996 (2/21/07) (pdf/WL) (previewed here).
The decision isn’t surprising given bankruptcy’s equitable roots and the lack of sympathy one can muster for a "bad faith" debtor like Marrama. More on the case later, as today I’m delivering the following two presentations for this scheduled event at the Licensing Executive Society Winter 2007 Meeting in San Francisco, and thus have neither the time nor the background briefs and transcripts at hand to provide much more insight into the case:
- IP Licensing & Bankruptcy: An Issue Spotting Checklist for Analyzing Questions Regarding Assumption, Rejection, and/or Assignment of IP Licenses in Bankruptcy
– and –
- From Bankruptcy to Success through Licensing: The Cytomedix Story (with CRA International’s Jeff Snell)
Those wanting an insightful and controversial early look at the case, be sure to check out Professor Todd Zywicki’s lengthy post at the Volokh Conspiracy.
2/27/07 Update: Here’s my follow up post on the Marrama decision, entitled 5-4 US Supreme Court Majority Extends a Bankruptcy Court’s Power to Curtail a "Bad Faith" Debtor’s Seemingly Absolute Rights Under the Code.
© Steve Jakubowski 2007