Bankruptcy

Dismissal of Chapter 11 Case Calls Into Question Bankruptcy Protections for Cannabis Companies

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Despite a company’s claim that it deals only in legal hemp products, in January, a federal court denied the company’s access to relief under the Bankruptcy Code. U.S. Bankruptcy Court Judge Joseph Rosania, Jr., of the District of Colorado, dismissed United Cannabis Corporation’s (UCANN) Chapter 11 bankruptcy filing, a move that could cause concerns for cannabis companies that may be seeking bankruptcy relief, particularly in the midst of a global pandemic.

Court Addresses Arbitration Provision in Connection With Post-Petition Debtor Contracts

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In Woodbridge Wind-Down Entity v. Monsoon Blockchain Storage, the U.S. Bankruptcy Court for the District of Delaware (the “Court”) addressed the enforceability of an arbitration provision in connection with a post-petition contract entered into by the debtors and a non-debtor counterparty. The Court first concluded that Paragraph 22(B) did provide for the arbitration of disputes under the APA. However, the Court then found that the Addendum represented the parties’ actual intent and that its language controlled. In light of the Addendum’s unambiguous language, the Court concluded that the parties did not agree to arbitrate claims under the APA.

Professor Jonathan Lipson: 2020 Friel-Scanlan Lecture

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On November 10, 2020, Temple Law Professor and 10-Q Faculty Editor Jonathan Lipson delivered the 2020 Friel-Scanlan lecture titled “Sex, Drugs, and Bankruptcy: Due Process and Social Debt.” The lecture was delivered against the backdrop of the American opioid crisis and recent events surrounding the well-publicized bankruptcies of Purdue Pharma, Boy Scouts of America, and other debtors with liability for egregious misconduct. Professor Lipson argued that a bankruptcy system which offers sweeping releases from civil and criminal liability for those involved in this wrongdoing upsets the basic tenets of Due Process.

SCOTUS Adopts “No Fair Ground of Doubt” Standard for Violations of Bankruptcy Discharge Order

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In a unanimous decision, the U.S. Supreme Court ruled recently in Taggart v. Lorenzen that a creditor in a bankruptcy case may be held in civil contempt, and subject to sanction, where there is “no fair ground of doubt” about whether the discharge order barred the creditor’s conduct. Creditors engaging with consumers post-discharge often face litigation for