Engelman Berger Sponsors the Arizona Bankers Association’s 116th Annual Convention and Meeting

Engelman Berger is proud to sponsor the Arizona Bankers Association’s 116th Annual Convention on June 6-8, 2019 at the Ritz Carlton at Dove Mountain Arizona. EB shareholders Scott Cohen, Tami Lewis, and Kurt Peterson will attend this “members only” event. They will participate in a business session where attendees will hear from a wide variety of keynote speakers and leading Arizona business professionals on the topics of: Global & U.S. Economic Conditions, Treasury Management, and more. This year’s convention will also include networking events, a Luau party and a Bankers Cup Golf Tournament, where participants will have the opportunity to network and mingle among their fellow attendees.

Scott Cohen has previously served as a subject matter expert for the Arizona Bankers Association and continues to be an active member of the organization. We look forward to hearing about the event from Scott, Tami, and Kurt.

Rejection of Trademark License Not Tantamount to Revocation

Have you ever worried about the status of your intellectual property rights if the licensor filed bankruptcy? Outside of bankruptcy, it was settled law that a licensor who breaches cannot revoke its rights under a contract, absent some special contract terms or unique aspect of law. In a bankruptcy, however, revocation was a serious concern in entertainment law and the fashion industry, for example. Days ago, the U.S. Supreme Court clarified your rights and ended any chance of debtors licensing away their intellectual property rights, declaring bankruptcy, and then re-trading them.

In Mission Product Holdings, Inc. v. Tempnology, LLC, nka Old Cold LLC, 2019 WL 2166392, the Supreme Court addressed the issue of whether a debtor-licensor’s rejection of a contract deprives the licensee of its rights to use the trademark. The Supreme Court held that it does not.  Succinctly put, “A rejection breaches a contract but does not rescind it.” Accordingly, those rights conveyed by the contract survive the breach and remain in place.

This case arises in the context of a licensing agreement but should apply equally to all contracts with debtors. Tempnology primarily manufactured workout clothing designed to keep you cool and marketed those products under the brand name “Coolcore.” It used trademarks to distinguish its gear from the competition. Tempnology entered into a contract with Mission Product Holdings which gave Mission an exclusive license to distribute certain Coolcore products in the U.S. It also granted Mission a non-exclusive license to use the Coolcore trademarks. Before the agreement expired, Tempnology filed a voluntary petition under Chapter 11 of Title 11 of the U.S. Code a/k/a the Bankruptcy Code. Tempnology then asked the bankruptcy court to allow it to “reject” the licensing agreement.

The bankruptcy court approved the rejection, thereby relieving the debtor of any obligation to continue to perform and giving counterparty Mission a pre-petition claim for damages. Tempnology wanted more. Tempnology sued for declaratory judgment asking the court to determine that rejection was tantamount to rescission in that it terminated the rights it granted Mission to use Coolcore trademarks. While the bankruptcy court agreed with Tempnology, the Bankruptcy Appellate Panel for the First Circuit disagreed. The First Circuit Court of Appeals rejected the BAP’s analysis and an opinion out of the Seventh Circuit, and reinstated the bankruptcy court’s decision. 

Numerous courts have struggled with the ramifications of a debtor’s rejection of a contract pursuant to Section 365 of the U.S. Bankruptcy Code. Over time, two views emerged.  Some courts concluded that a contract breach should have the same consequences as a breach outside of bankruptcy. Under this scenario, a breach allows the counterparty a suit for damages while leaving intact the rights the counterparty received under the agreement. Other courts have held that a contract breach is more akin to a rescission in a non-bankruptcy environment. In this paradigm, the counterparty still has a suit for damages but the rejection terminates the entire agreement and corresponding contractual rights conferred upon the counterparty. 

As Professor Baird wrote and Justice Kagan quoted for the majority: “A debtor’s property does not shrink by happenstance of bankruptcy, but it does not expand, either.” This principle applies equally to personal property contracts as it does to license agreements. In fact, the hypothetical Justice Kagan weaves throughout the opinion is that of a law firm’s lease of a copier. Thus, we are guaranteed to see various applications of Tempnology as debtors and creditors explore the boundaries of this latest Supreme Court decision.

About the Author: Scott Cohen has practiced commercial bankruptcy, creditors’ rights, and insolvency litigation for 27 years. He is a Board Certified Specialist in Business Bankruptcy Law and a past Bankruptcy Section Chair of the State Bar of Arizona.

Disclaimer: This blog is not legal advice and is only for general, non-specific informational purposes. It is not intended to cover all the issues related to the topic discussed. If you have a legal matter, the specific facts that apply to you may require legal knowledge not addressed by this blog. If you need legal advice, consult with a lawyer.

Engelman Berger Wishes Everyone a Safe and Memorable Memorial Day

Engelman Berger takes this moment to wish our community a safe and memorable Memorial Day. We hope you are able to enjoy the holiday weekend with friends and family as we keep those who have died in service to our country close to our hearts.

Memorial Day is a national American holiday that honors the men and women in the U.S. Military who lost their lives serving our country. Memorial Day was first known as “Decoration Day” and was established a few years after the Civil War. It became an official federal holiday in 1971. Many individuals, families, friends, etc. visit cemeteries or memorials to honor those who served but did not come home.

Engelman Berger Has Officially Moved

Engelman Berger has officially moved into our new office. We would like to remind our clients, friends, and the public that we are now located at 2800 N Central Ave, Suite 1200 Phoenix, Arizona 85004. Our telephone and email information remain the same.

TMA is Hosting NOW (Network of Women) Summit on May 7th

Be empowered, motivated, and inspired by fellow professional women at the annual TMA NOW Summit. The event will be held in Chicago on May 7th at Kirkland & Ellis from 10:00AM to 7:00PM. Learn more about “Managing Your Financial Health,” “Healthcare Restructuring Panel” and “Maximizing Your Networking” from motivating, powerful, and influential women. Included in the event’s agenda, you will find keynote speaker and entrepreneur, Heidi Ganahl, speaker and business coach, Marianne Trost – The Women Lawyers Coach, along with a networking reception at AceBounce.

Engelman Berger attorney, Tami Lewis, is on the planning committee for the TMA NOW summit and will be attending the event. For more information and to register for the summit, visit https://now.turnaround.org/.

Brad Pack and Michael Rolland Selected for Inclusion in 2019 Super Lawyers® Rising Stars List

Brad Pack and Michael Rolland have been selected for inclusion in the 2019 Super Lawyers® Rising Star list. These attorneys have displayed excellence in the categories of Bankruptcy, Appellate, General Litigation, and Business/Corporate. Congratulations Brad and Michael!

We would like to congratulate Michael Rolland for being included for the first time in the Super Lawyers® Rising Star list!

Super Lawyers® is a legal industry rating service of outstanding lawyers in more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. Only 4% of attorneys in Arizona are named as Super Lawyers® and only 2.5% of lawyers under the age of 40 are named as Rising Stars. For more information about Super Lawyers®.

Engelman Berger 2019 Southwest Rising Stars®:

  1. Bradley D. Pack – Bankruptcy, Appellate, General Litigation
  2. Michael P. Rolland – Business/Corporate

Five Engelman Berger Attorneys Selected for Inclusion in 2019 Southwest Super Lawyers® List

Five Engelman Berger attorneys have been selected for inclusion in the 2019 Southwest Super Lawyers® list. These attorneys have displayed excellence in the categories of Bankruptcy, Alternative Dispute Resolution, Business/Corporate, Business Litigation, Real Estate, Creditor Debtor Rights, Closely Held Business, General Litigation, Banking, and Civil Litigation: Defense. Congratulations Steve, David, Scott, Kevin, and Patrick!

Steve Berger was also selected again by Southwest Super Lawyers® as one of the Top 50 Arizona Lawyers. Congratulations, Steve!

We would also like to congratulate Patrick Clisham for being included for the first time in the Southwest Super Lawyers® list!

Super Lawyers® is a legal industry rating service of outstanding lawyers in more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. Only 4% of attorneys in Arizona are named as Super Lawyers® and only 2.5% of lawyers under the age of 40 are named as Rising Stars. For more information about Super Lawyers®.

Engelman Berger 2019 Southwest Super Lawyers®:

  1. Steven N. Berger – Bankruptcy, Alternative Dispute Resolution, Business/Corporate, Business Litigation, Real Estate, Creditor Debtor Rights
  2. David Wm. Engelman – Creditor Debtor Rights, Closely Held Business, Bankruptcy
  3. Scott B. Cohen – Bankruptcy, General Litigation, Banking, Creditor Debtor Rights
  4. Kevin M. Judiscak – Business Litigation, Civil Litigation: Defense
  5. Patrick A. Clisham – Bankruptcy, Business/Corporate, Business Litigation

EB Attorney Scott Cohen Will Be Presenting at ABI Spring Meeting in D.C. “Not So Free, Not So Clear: An Ethical Walk Through Asset Sales” Panel

On April 12, 2019, Engelman Berger attorney Scott Cohen will be presenting at ABI “Not So Free, Not So Clear: An Ethical Walk Through Asset Sales” panel. This panel is a joint session between both the ABI Asset Sales Committee and the ABI Ethics & Professional Compensation Committee. Faculty will discuss the ethical problems facing counsel and their clients in § 363 sales including collusion, abuses during due diligence, and successor liability. The other panelists include Peter J. Barrett, the moderator, of Kutak Rock LLP; Peter J. Roberts of Fox Rothschild LLP; and Cynthia Romano of CR3 Partners LLP.

ABI is known as the nation’s largest association of bankruptcy professionals. The organization is made up of more than 12,000 attorneys, bankers, judges, lenders, turnaround specialists, accountants and other professionals. Since 1982, ABI has provided congressional leaders and the general public with non-partisan reporting and analysis of bankruptcy regulations, laws, and trends. ABI also takes part in many education and research activities dedicated to the better understanding of insolvency.

Come Join Engelman Berger as we Participate in the 6th Annual AASK Family Fun Walk on May 4th

Come join Engelman Berger on Saturday, May 4th, as we participate in the 6th annual Aid to Adoption of Special Kids (AASK) Family Fun Walk. We are forming a team and raising funds in support of this amazing and impactful organization that connects children with foster families, adoptive families, siblings, kin, and adult mentors. To join Engelman Berger’s team or to donate funds towards AASK, visit this link http://familyfunwalk.org/teampage.asp?fundid=896#.XIXB3s9KiCR.

The walk will take place at Steele Indian School Park, Phoenix Green Area, 300 E. Indian School Road, Phoenix (entrance off 7th street). Registration opens at 7:30AM and the walk begins at 8:30AM. The AASK Family Fun Walk is a 1.5-mile loop around the park that begins and ends in the walk’s expo area where families, friends, and children of all ages can enjoy music, food, games, and activities. We hope to see you there!

“Aid to Adoption of Special Kids” (AASK) founded by “Kax” Herberger in 1988 has been providing relationships for Arizona’s children in the foster care system for over 29 years. AASK connects children with foster families, adoptive families, siblings, kin, and adult mentors. AASK families and mentors have seen first-hand the difference a committed, caring adult has in the lives of a child in foster care and how the emotional connection of an enduring relationship can help children who have experienced trauma, abuse and neglect heal. AASK hosts free informational meetings in both Spanish and English for those who are interested in becoming a parent or a mentor to a child in foster care. For more information about AASK visit, http://www.aask-az.org/

Engelman Berger is a Sponsor of the Black & White Ball Honoring Barbara & Mathis Becker and Melanie & Barry Becker

On April 7, 2019, Beth El Congregation is hosting a Black & White Ball honoring Barbara and Mathis Becker, and Melanie and Barry Becker, four longtime Beth El members and supporters. Barbara was recently appointed as president of Beth El, Mathis has displayed strong leadership of the Endowment Committee, Barry is an active participant in the Cemetery Committee, and Melanie has volunteered many hours in the Talmud Torah and Beth El’s preschool. For two generations, the Becker family, including parents, has supported Beth El and the Phoenix community. These individuals are especially important to our firm, as they are friends of Engelman Berger co-founder, David Engelman and other members of the firm. The event will be hosted at the Beth El Congregation at 5:30pm and will include a celebratory and fun night filled with cocktails, dinner, dancing, and a silent auction. To commemorate the Becker families that are being honored at the event, a tribute journal, designed by members of Beth El, will be distributed to the attendees of the event. Those who attend the event can then add messages or ads in the journal to support the honorees. For more information about the event or to RSVP, visit this link https://www.bethelphoenix.com/black-white-ball/.

Beth El is a synagogue that accepts all who wish to have access to Judaism. Beth El hopes and strives to provide its members with a place to go when they need company, friends, and community; a place to participate in Jewish ritual and programming; and a place where you have a support system of clergy and staff who will cater to your needs as pertaining to your synagogue experience.