Author Archives: Benjamin M Riskin

Twenty-Six Years Later, a Lubrizol Split by the Seventh Circuit

Chief Judge Frank Easterbrook of the Seventh Circuit recently created a split of authority regarding the rejection intellectual property licenses in bankruptcy by upholding a decision protecting a trademark licensee’s ability to use a debtor licensor’s trademark after the licensing … Continue reading

Loose Lips Sink Hostile Bids: Delaware Chancery Court Enforces Non-Disclosure Agreement with Injunctive Relief

In an eloquent account of consensual merger negotiations between Martin Marietta and Vulcan Materials, the two largest players in the domestic aggregates business, Chancellor Leo Strine of the Court of Chancery of Delaware recently prohibited Martin Marietta from using information shared by Vulcan in connection with consensual merger negotiations to pursue a hostile takeover bid and related proxy contest. Martin Marietta Materials, Inc. v. Vulcan Materials Company, 2012 Del. Ch. LEXIS 93 (Del. Ch. May 4, 2012).
The decision offers a real world application of the limitations on use and information gained in non-disclosure agreements. While the court decided this case in the Delaware corporate law context, restructuring parties in and out of bankruptcy frequently obtain information under similar restrictions. Indeed, information may be exchanged in connection with the marketing and sale of assets, or in connection with out-of-court work outs. Recipients of this information should exercise caution when using information obtained consensually to pursue non-consensual or aggressive strategies.
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VeraSun: Claims Under “Change in Control” Agreements Subject to Cap Governing “Employment Contracts”

In a recent decision in the VeraSun bankruptcy cases, the U.S. Bankruptcy Court for the District of Delaware held that “change in control” agreements between former executives and the debtors are “employment contracts” under section 502(b)(7) of the Bankruptcy Code. Accordingly, the Court determined that the former executives’ claims asserted under the agreements were appropriately capped by the claims-allowance scheme set forth in section 502. In re VeraSun Energy Corp., et al., 2012 Bankr. LEXIS 1262 (Bankr. D. Del. Mar. 26, 2012). Continue reading

MF Global: No Statutory Authority for Broker Customer Committee, Compensation from Estate, in SIPA Liquidation

Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York recently denied a motion filed by commodity broker customers of MF Global Inc. seeking the appointment of an official committee of commodity broker customers whose fees and expenses would be paid by the debtor’s estate. Judge Glenn held that he lacked statutory authority to appoint an official customer committee in a broker-dealer liquidation under the Securities Investor Protection Act, and could not pay a chapter 7 official committee from estate expenses. Further, Judge Glenn noted that customers’ interests were sufficiently protected by an experienced SIPA Trustee subject to significant oversight. In re MF Global Inc., 462 B.R. 36 (Bankr. S.D.N.Y. 2011). Continue reading

International Forum Shopping Trip Cut Short by SDNY

Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York recently weighed in on the standing of a chapter 15 debtor’s foreign representative to allege a violation of the automatic stay following commencement of … Continue reading