Cabin Fever? Try CLE

The top 10 things to do if you become bored being in quarantine:

10.  Train your dog, parrot or hamster to do helpful chores.

9.    Take up a new hobby like sewing (masks for healthcare workers) or knitting (sweaters and blankets) for the homeless.

8.    Buy the most complicated Lego set online or a 1,000 piece jigsaw puzzle and build/assemble it. (Note: Anything that says “So easy a child can assemble it” usually means ONLY a child can figure out how to assemble it!)

7.    Find those old board games you mothballed when you started playing online video games.

6.    Play Bingo remotely with as many people as you can using video conference technology.

5.     Convince all your neighbors to open their windows and rotate who picks the song everyone must sing every hour on the hour.

4.    Get cultured (no, not yogurt). The Metropolitan Opera is streaming nightly.

3.    Learn to play an obscure instrument like a zither, contrabass balalaika, crwth, hardanger fiddle or a lur.

2.    Since no one is going for haircuts or to beauty salons, try out a new hairstyle and experiment with your hair differently every day.

                             OR

1.     You could tune in online for one or more Continuing Legal Education (CLE) courses offered as part of Rimon’s Complimentary CLE Webinar Series 2020.

 

Retaining Jurisdiction Requires More than Just Words

By Douglas Schneller, Partner, Rimon Law

Bankruptcy plans and contracts approved by bankruptcy courts routinely include “retention of jurisdiction” provisions, but a case decided last month, Gupta v. Quincy Med. Ctr. (“Gupta”), reminds us that the jurisdiction of a bankruptcy court is not unlimited merely by reciting the words. In the Gupta decision, the First Circuit held that unless the dispute involves or affects the debtor’s estate or requires interpretation of a bankruptcy court order or bankruptcy law underlying the dispute, the appropriate venue to consider the dispute may be state court, even against the expectations or wishes of the parties.

In this case, the parties entered into an agreement for the sale of assets by the seller and in the contract, the buyer agreed to pay severance to any employees of the seller that were fired after closing. Literally the day after signing the agreement, the seller (the ‘debtor’) filed voluntary Chapter 11 petitions and a sale motion under the Bankruptcy Code seeking approval of the asset purchase agreement. The Bankruptcy Court approved the agreement and sale, which then closed. The Bankruptcy Court’s order, as well as the order confirming the proposed Chapter 11 plan of reorganization, each contained a provision that the Bankruptcy Court would retain jurisdiction over disputes.

You can guess what happened next. After the closing of the asset sale, the buyer terminated the seller’s executives, effective as of the closing date and refused to pay severance. Inevitably, the lawsuits followed. Although the Bankruptcy Court decided it had jurisdiction to hear the claims based on the ‘retention of jurisdiction’ clauses, on June 2, 2017, the First Circuit Court of Appeals decision concluded that the Bankruptcy Court lacked subject matter jurisdiction. The First Circuit vacated the judgments against the buyer and remanded the case with instructions to dismiss the claims against the buyer. In short, the court concluded that the contract language in the asset purchase agreement was not sufficient by itself for the Bankruptcy Court to retain jurisdiction to hear disputes, because a bankruptcy court cannot retain jurisdiction it never had. Indeed, the court noted that the claims could well have arisen entirely outside of bankruptcy and could be decided solely under Massachusetts contract law.

There is a lot more detail and analysis and if you want to read the entire Client Alert: First Circuit: Bankruptcy Court “Retention of Jurisdiction” Provision Requires More Than Mere Words and contact Douglas Schneller directly.

Of course, you should always feel free to contact me, Joe Rosenbaum, or any of the professionals at Rimon Law with whom you routinely work.