|
12.11.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In In re Thurmon, the Bankruptcy Court for the Western District of Missouri (Judge Norton) held that debtors who had ceased operation of their business and sold its assets pre-petition were not “engaged in commercial or business activities,” and therefore could not proceed under new subchapter V of chapter 11. Despite its order, the Court nonetheless signaled its willingness to confirm the debtors’ subchapter V plan with a modification, although the debtor had never sought approval of or distributed a disclosure statement as required for non-subchapter V chapter 11 debtors.
|
|
12.11.2020 |
Originally published Dec. 9, 2020, on Law360.
With the COVID-19 pandemic depriving bankruptcy practitioners of our usual opportunities to meet in court and at conferences to discuss recent developments in the law, I spent time tracking developments in bankruptcy law within the U.S. Court of Appeals for the Eighth Circuit.
|
|
11.16.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In Lund-Ross Constructors, Inc. v. Buchanan (In re Buchanan), the Bankruptcy Court for the District of Nebraska (Judge Saladino) denied an objection to discharge on the basis that tort claims against a non-debtor business were not enforceable against the husband-and-wife chapter 7 debtors who owned the business. The opinion warrants careful consideration by counsel representing property owners and general contractors in Nebraska, because it suggests Nebraska law limits the liability of corporate principals, even when they participate actively in allegedly actionable misrepresentations.
|
|
10.09.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In Veroblue Farms USA, Inc. v. Cassels Brock & Blackwell, LLP (In re Veroblue Farms USA, Inc.), the Bankruptcy Court for the Northern District of Iowa (Judge Collins) held the Court could properly exercise personal jurisdiction over a Canadian law firm in an adversary complaint for turnover. The law firm argued exercise of jurisdiction was improper because it had no pertinent contacts with Iowa; rather, the firm had represented a Canadian company from the firm’s offices in Canada. The firm further argued that it did not give legal advice in Iowa or related to Iowa law.
|
|
09.23.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In State of North Dakota ex rel. Stenehjem v. Bala (In re Racing Services, Inc.) the Eighth Circuit BAP (Judges Dow, Nail and Shodeen) concluded the North Dakota Attorney General lacked standing to file a chapter 7 proof of claim on behalf of eligible nonprofit organizations, but that its tardy filing of a proof of an assigned claim was not barred by laches or subject to disallowance under section 502(b)(1).
|
|
09.16.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In Kelley v. Boosalis (In re Petters Company, Inc.) and Kelley v. Kanios (In re Petters Company, Inc.),[1] the Eighth Circuit (Judges Loken and Benton, with Judge Kelly dissenting in part and concurring in part) held that federal law, not state law, determines whether pre-judgment interest may be awarded on judgments for the value of transfers avoided under section 544(b). In so doing, the Court split with the Ninth Circuit and the First Circuit BAP. The Court also interpreted the application of Minnesota’s Uniform Fraudulent Transfer Act (“MUFTA”) in the context of a Ponzi scheme.
|
|
07.27.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In Slawson Exploration Co., Inc. v. Nine Point Energy, LLC (In re Triangle USA Petroleum Corp.), the Eighth Circuit (Judges Shepherd, Smith, Melloy) held that under North Dakota law, an O&G promote obligation does not run with the land, was not an equitable servitude, and was not a real property interest akin to an overriding royalty. Slawson and the Debtor’s predecessor, TPC, were O&G production companies who teamed up to lease, develop and drill land in North Dakota. Under the terms of their agreement (the “EDA”), either party that acquired an O&G leasehold in a specified area of North Dakota was required to offer the other an undivided interest at cost in the proportion specified in the EDA: 70% for Slawson and 30% for TPC. TPC also agreed to pay “an additional 10% of its share of the drilling, completing, and equipping costs for each well in which TPC elect[ed] to participate” – the “Promote Obligation.”
|
|
07.08.2020 |
Objection to IRS Proof of Claim, Filed Before Amendment to Rule 3007 Went Into Effect, Was Properly Mailed Only to IRS
In Nicolaus v. USA (In re Nicolaus), the Eighth Circuit (Judges Stras, Benton and Gras) held that a debtor’s objection to a proof of claim filed by the IRS may properly be served by mail to the IRS, rather than by service on the Attorney General and the local United States Attorney. The Eighth Circuit’s holding is contrary to that of other courts, including the First Circuit BAP.
|
|
05.15.2020 |
Eighth Circuit Bankruptcy Monitor
In Boisaubin v. Blackwell (In re Boisaubin), the Eighth Circuit BAP (Judges Sanberg, Nail, Saladino) affirmed the Bankruptcy Court’s (Judge Rendlen) orders approving a compromise and denying motions to file documents under seal. In so doing, the Court addressed whether an asset that was estate property in a prior case by the debtor, but which was never scheduled, becomes estate property in a later case by the same debtor once the first case is reopened and the asset abandoned. The Court answered that the asset becomes part of the second bankruptcy estate even though the asset itself was not the property of the debtor at the time the second case was filed.
|
|
05.07.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
In County of San Mateo, California v. Peabody Energy Corp. (In re Peabody Energy Corp.), the Eighth Circuit (Judges Arnold, Gruender and Shepherd) agreed that the Bankruptcy Court (Judge Schermer) did not abuse its discretion when it held that litigation against Peabody by various California municipalities was barred by the terms of Peabody’s confirmed chapter 11 plan of reorganization. In so doing, the Court placed particular weight on the presumed intent of the plan drafters in defining exceptions from discharge – a rule of interpretation that may prove significant.
|
|
05.05.2020 |
Eighth Circuit Bankruptcy Monitor
In Richards v. Rabo Agrifinance, LLC (In re Kip and Andrea Richards Family Farm & Ranch, LLC), the Eighth Circuit BAP (Judges Schermer, Shodeen and Sandberg) affirmed the bankruptcy court’s determination that members of a debtor LLC were equitably estopped from claiming ownership of LLC property.
|
|
05.01.2020 |
Eighth Circuit Bankruptcy Monitor
Court May Exercise “Related To” Jurisdiction Over Adversary Complaint by a Creditor Against a Third Party; Orders Transfer of Action to State Court Although Action Originally Filed in Federal Court
In Bushman Custom Farming, LLC v. Stillmunkes (In re Stillmunkes), Bankr. N.D. Iowa, 19-01011, d/e 16, April 30, 2020, Judge Thad Collins found the Court had “related to” subject matter jurisdiction under 28 U.S.C. § 157(b)(3) to entertain a non-core adversary proceeding between a creditor and a third party. The Court elected to abstain and ordered the action transferred to an Iowa state court.
|
|
04.29.2020 |
EIGHTH CIRCUIT BANKRUPTCY MONITOR
Judge Thad Collins of Bankr. N.D. Iowa held, as a matter of first impression, that “§ 1232(a) allows family farmers who have capital gains tax debt under Chapter 12 process to require taxing entities to issue a refund of withheld income taxes to the bankruptcy estate.”
|
|
02.28.2018 |
On February 27, 2018, a unanimous Supreme Court held in Merit Management Group, LP v. FTI Consulting, Inc. (link here) that an otherwise-avoidable transfer is not subject to the safe harbor in Section 546(e) (which provides, in relevant part, a trustee may not avoid a transfer that is a “settlement payment . . . made by or to (or for the benefit of) a . . . financial institution” or that “is a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract”) of the Bankruptcy Code merely because funds flow through covered financial entities. Rather, the availability of the Section 546(e) safe harbor depends on the particular transfer sought to be avoided.
|
|
01.12.2017 |
On January 10, 2017, Missouri Governor Eric Greitens signed Executive Order 17-03 (the “Order”). Among other things, the Order compels all state agencies to review each and every Missouri regulation appearing in the Code of State Regulations that falls within their jurisdiction.
|
|
12.17.2015 |
Courts sometimes have trouble determining whether a warranty explicitly extends to future performance. A recent case provides refreshing clarity on the issue.
|
|
11.16.2015 |
A new theory of securities fraud may prove important (and dangerous) to manufacturers.
|
|
11.10.2015 |
If you’re like many manufacturers who sell internationally, your standard terms and conditions provide that the UN Convention on Contracts for the International Sale of Goods (“CISG”) does not apply to your transaction. But, maybe they don’t, or maybe your disclaimer is ineffective (it happens a lot). In those instances, it’s important to understand where CISG differs from Article 2 of the Uniform Commercial Code, which typically covers sales of goods within the United States.
|
|
11.04.2015 |
Today’s column is prompted by a recent decision by the Supreme Court of Missouri, in which the Court denied a Missouri manufacturer a sales tax refund.
|
|
08.19.2015 |
On August 18, 2015, the D.C. Circuit Court of Appeals, sitting en banc, upheld its prior order striking a portion of the SEC’s conflict mineral rule.
|
|
07.06.2015 |
If you review the terms and conditions given by many manufacturers in their invoices (including, probably, yours), you likely will find a provision that says something to the effect of “we agree to sell you this product if, and only if, you agree to each of these terms and conditions.” It’s a common term, and there’s a good reason for it: it can counteract standard form language in the buyer’s purchase order that you don’t like.
|
|
06.26.2015 |
A court recently held that a CGL insurer owed a duty to defend its insured accused of breaching express and implied warranties.
|
|
06.15.2015 |
This is a story about a U.S. manufacturer who got into a dispute with its Chinese supplier.
|
|
05.22.2015 |
In 2011, the FTC requested public comment regarding its interpretations, rules, and guides issued under the Magnuson-Moss Warranty Act. After four years of hard work, the FTC today issued a press release headlined “FTC Will Keep Consumer Product Warranty Rules in Current Form with Some Modifications.”
|
|
05.13.2015 |
If you regularly read this column, you know that one of the things we spend a lot of time discussing is working appropriate protections into your contracts. Plaintiffs’ attorneys understand that, and often try to work around those protections by restyling breach of contract or breach of warranty actions as tort claims – that is, claims for negligence or fraud or the like.
|
|
04.27.2015 |
File this one under “does your warranty really say what you think it says?”
|
|
04.15.2015 |
Beware union organizers loitering around your premises!
|
|
04.03.2015 |
If you’re like many manufacturers, you have no dealings with the end user of your product. Rather, you sell to a distributor or other intermediate seller, who then sells your product to the end user. We have previously discussed disclaiming your implied warranties against your intermediate buyer and whether that disclaimer travels “downstream” to the end user, but we haven’t addressed whether a disclaimer made by the intermediary can protect you in a suit by the end user if, say, you failed to disclaim your implied warranties yourself or if for some reason they are not effective against the end user.
|
|
03.31.2015 |
I previously have urged you to limit the remedies available under your express warranty (e.g. to repair or replacement), and to disclaim liability for incidental and consequential damages. Here, we’ll discuss a common argument made by people who want to render your efforts meaningless.
|
|
03.20.2015 |
For this installment, we turn to an aspect of the implied warranty of merchantability that has not gotten its fair share of attention here: what is “the ordinary purpose” for which your product is used? It seems like a simple question, but it can be deceptively tricky.
|
|
03.10.2015 |
If you read this column with any regularity, it will not surprise you that I was thrilled to read this introduction to a recent court opinion: “The motions to dismiss in this case present a difficult legal issue, as if a civil procedure professor and a Uniform Commercial Code professor conspired on a law school exam question[.]”
|
|
02.12.2015 |
Manufacturer’s Corner. So, there’s a big shipping backlog forming out west while port owners and the longshoremen work a few things out. How’s that affecting your supply contracts?
|
|
01.30.2015 |
As I’ve noted before in these columns, an implied warranty disclaimer is an essential part of your terms and conditions. But giving an effective disclaimer is sometimes easier said than done, especially when you do not sell your product directly to the end user, but rather through a wholesaler, retailer, or other intermediary.
|
|
01.22.2015 |
Shortly before issuing his State of the Union address, President Obama released a proposed federal law mandating notification to individuals whose personal information is compromised in certain data breaches. Not long ago, I wouldn’t have written about this issue in a Manufacturer’s Corner column, but since I recently decided that the Internet of Things will expose manufacturers to litigation over data privacy, it seems appropriate.
|
|
01.16.2015 |
Here is good news for a certain subset of Manufacturer’s Corner readers.
|
|
01.13.2015 |
This is not a litigation column, but I’m a trial attorney, so litigation is always on my mind. I’ve been hearing a lot of chatter lately about consumer class actions. Specifically: what must a putative consumer class do to show that the class members are ascertainable – that is, that the court and the lawyers and the class members can figure out who is in the class and who is not.
|
|
01.07.2015 |
Here’s a thing that probably appears in your standard terms and conditions: “This agreement cannot be modified or rescinded, except in writing signed by an authorized agent of [your company].” You can go ahead and check. It’s probably down toward the bottom, above the miscellaneous provisions like choice of law.
|
|
12.19.2014 |
An easily-overlooked portion of a contract for the sale of goods is the one that addresses what notice the buyer must give the seller in the event the goods do not conform to contract specifications or warranties. These provisions warrant your close attention, however, because they can be outcome-determinative in the event of litigation over the alleged non-conformity.
|
|
11.26.2014 |
Here is a troubling new case from the Missouri Supreme Court. And I don’t mean troubling in the abstract sense of “oh maybe there could be liability down the road if you don’t do this,” which is pretty much the bread and butter of this column. I mean troubling in the “you may have already botched this, so you better pull out the books and call the accountants and lawyers” sense.
|
|
11.21.2014 |
Now that we have completed our brief detour into what the Supreme Court could maybe do with the BP oil spill case if it decides to do anything with it, we resume our ongoing series on what law applies when you incorporate software into your products.
|
|
11.16.2014 |
We take a break from our series on incorporating software into your products to talk about a case the Supreme Court is considering that may prove significant to manufacturers. This column is not typically the place to go for predictions on what the Supreme Court may do, but I want to bring this case to your attention, and circumstances are forcing me to do it now rather than later.
|
|
11.07.2014 |
In the first installment of this series, we discussed the general scope of Article 2 of the Uniform Commercial Code, and, in the broadest terms, whether and when the purchase or sale of software falls within that scope. In this installment, we’ll move toward our goal of understanding when your purchase or sale of software is governed by Article 2 by looking at how the question has been treated by various courts over time.
|
|
11.03.2014 |
This column spends a lot of time talking about Article 2 of the Uniform Commercial Code. A lot of time. That’s because it’s a column directed to manufacturers, and Article 2, generally speaking, deals with sales of goods.But that “generally speaking” glosses over quite a bit, and it can cause us to miss important issues.
|
|
10.26.2014 |
Remember when I wrote a glowing column about a Master Development and Supply Agreement Apple and its lawyers drafted? It was one of the most-read posts I’ve written, so I bet a good number of you do. Since the post was so popular, and since there have been some, well, we’ll say “unanticipated consequences” for Apple, I thought it warranted some follow up.
|
|
10.13.2014 |
There’s an unwritten rule that if you blog about manufacturing, you must blog about the Internet of Things. I blog about manufacturing, so here we are.
|
|
10.09.2014 |
This post comes to you based on a story by the always-excellent Matt Levine of BloombergView. Evidently Apple loaned a company called GT Advanced Technologies a bunch of money so GTAT could develop and supply Apple with sapphire screens for a long time. Anyway, there may have been a default under part of that agreement, and GTAT filed for bankruptcy protection because that default was going to ruin everything (at least according to industry speculation).
|
|
10.06.2014 |
A thing I like to do is approach people at parties and other gatherings and ask them if they know they can use contracts to shorten some statutes of limitations. Usually I get quizzical looks, but I guess the context just worked better when I mentioned it while speaking at a recent event put on by the Kansas Bar Association. An especially attentive participant asked a good follow-up question that warrants some discussion: can you shorten the limitations period for fraud?
|
|
09.10.2014 |
In the first four installments of this series, we covered the essential components of an effective limited warranty. But each of those installments carried an important caveat: that you were not selling consumer goods. In this fifth and final installment of the series, we turn our attention to additional warranty issues to consider when selling consumer goods.
|
|
08.28.2014 |
We pick up our discussion of effective limited warranties by addressing limitations of remedies.
|
|
08.17.2014 |
In our last installment in this series, we looked at the express warranty portion of an effective limited warranty. We now turn our attention to the importance of shortening the limitations period for bringing a warranty claim. Please remember that, for our purposes here, we’re assuming a non-consumer sale.
|
|
08.06.2014 |
By
Patrick T. McLaughlin, Ryan C. Hardy
Pat and I recently had the opportunity to publish an article with Practical Law, called “Manufacturing Custom-made Goods in the United States.”
|
|
08.01.2014 |
In our last installment, I introduced the importance of making your warranty terms clear. Now, we turn to the specifics, beginning with the express warranty itself. Here are some of the boxes you need to check when reviewing your express warranty.
|
|
07.25.2014 |
It’s a sad fact of life at companies and law firms that sometimes things are done a certain way just because that’s how they’ve always been done. Part of the reason this column spends so much time talking about your terms and conditions, however, is because that’s dangerous: how you do things now should be informed by the past, but not bound by the past.
|
|
07.18.2014 |
I’m going to break my self-imposed rule of writing for manufacturers instead of lawyers. This post is some pretty in-the-weeds stuff, but the topic has been on my mind and I think it’s interesting. If you have opinions on it, I’d love to hear them.
|
|
07.11.2014 |
Expanding on our recent discussion about how your shipping terms can affect risk of loss in the product you sell, let’s turn to other contract provisions that implicate the same issue: sales on approval or return.
|
|
07.03.2014 |
It’s inevitable: at some point, you will ship goods to your buyer, and the buyer will complain that they don’t conform to the contract specifications. When you’re dealing with a small shipment or a great customer, often the simplest solution is to accept the return and send replacement goods. Other times, however, you’ll be dealing with a major shipment or a problem customer, and you must be certain that you protect yourself while responding to the customer’s concerns.
|
|
06.25.2014 |
In recent installments of the Manufacturer’s Corner, we have discussed how to protect yourself from insolvent customers and how your shipping terms can expose you to unexpected risk. Thanks to the Bankruptcy Court for the Eastern District of Pennsylvania, we can explore how those two issues play together.
|
|
06.20.2014 |
We continue our discussion of June’s interesting implied warranty cases with a trip south to the Supreme Court of Texas. As I mentioned in the previous installment of the Manufacturer’s Corner, the Court declared a simple, bright-line rule on how a valid disclaimer of the implied warranty of merchantability affects remote purchasers.
|
|
06.16.2014 |
In this head-scratcher of an opinion, the Michigan Court of Appeals makes three legal conclusions that will shock practitioners.
|
|
06.06.2014 |
The Oregon Supreme Court has given us a great platform to discuss what happens when a buyer simply decides that breaching the contract is a better idea than performing. It’s an important case to consider, both in your capacity as a seller of goods, and in your capacity as a frequent buyer of goods under long-term sales contracts.
|
|
06.02.2014 |
In a happy coincidence of timing, the Eleventh Circuit Court of Appeals recently issued an entertaining opinion addressing the Carmack Amendment, which is a federal law limiting the liability of motor carriers for loss or damage of goods during shipment. The opinion will allow us to continue our discussion of mitigating shipping risks, introduced in the last installment of this column.
|
