Global law firm Hogan Lovells is pleased to announce the Honorable Kevin J. Carey will be joining the firm’s Business Restructuring and Insolvency Practice as a partner effective October 1. Judge Carey joins the firm following his retirement on August 31 from the United States Bankruptcy Court, District of Delaware, where he earned a reputation for being one of the nation’s top bankruptcy judges.“ Judge Carey’s superlative reputation is well earned—in his 18+ years on the bench, he presided over some of the largest and most significant Chapter 11 cases,” said Chris Donoho, Global Head of the Business Restructuring and Insolvency Practice. “He is a great resource for companies and creditors, and we expect that he will play key roles—as examiner or fiduciary—in bankruptcy cases and restructurings across the U.S. and internationally. He also has the cross-border experience needed to be a facilitator in multinational proceedings.”

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CFIUS reviews and the effect on bankruptcy 363 salesThe Committee on Foreign Investment in the United States (CFIUS) is an interagency committee established in 1975 that oversees foreign investment in the U.S. economy. In 1988 CFIUS granted the Executive Office of the President nonreviewable authority to block foreign investments that may present national security concerns. In 2018 the U.S. Congress passed the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). FIRRMA codified, among other things, CFIUS’ jurisdiction over transactions arising from bankruptcy proceedings, such as a bankruptcy 363 asset sale. In the year since FIRRMA, CFIUS reviews have become more common place and affect certain transactions that may have implications for companies who find themselves participating in a bankruptcy 363 sale.

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In Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___ (2019), the Supreme Court held that a debtor’s rejection of a trademark license does not eliminate the licensee’s right to use the trademark through the completion of the contract, settling a split in the Circuits. The Supreme Court also ruled that the case was not moot, despite the bankruptcy estate’s distribution of all of its assets, which may have important implications for the developing jurisprudence on mootness in bankruptcy cases.

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The Supreme Court, in Merit Management Group, LP v. FTI Consulting, Inc., 138 S. Ct. 883 (2018), recently resolved a circuit split in the interpretation of the Bankruptcy Code’s safe harbor provision.  The Court held that section 546(e) does not protect transfers made through a financial institution to a third party regardless of whether the

New York Bankruptcy Judge Sean H. Lane determined that the Australian debtors in a Chapter 15 foreign recognition proceeding satisfied the U.S. property requirements of Section 109(a) of the Bankruptcy Code on the basis of attorney retainers and claims against insiders located in the U.S.

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On February 27, 2018, the U.S. Supreme Court resolved a circuit split under the Bankruptcy Code and determined that where funds passed through financial institutions acting as payment conduits, where the ultimate transfer sought to be avoided was not the type of transaction protected by the safe harbor provisions of the Bankruptcy Code, the safe harbor provisions of Bankruptcy Code Section 546(e), shielding transfers through financial institutions from avoidance actions by bankruptcy trustees, was inapplicable.

The Supreme Court found that prior circuit decisions applying the safe harbor simply because financial institutions were intermediaries in the transfer is not consistent with the language or intent of the safe harbor provisions.
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