Trademark licensing is a driving force in business relationships. One common example is where one business owns a trademark, which it licenses out to other companies who manufacture and sell the products bearing the mark. But, what happens if the trademark owner goes bankrupt? Bankruptcy law gives a debtor the right to “reject” contracts to … Continue Reading
When businesses pay for goods and services, they generally like to receive them. Unfortunately, as any bankruptcy lawyer will tell you, this consistent desire is not matched by uniform experience.
Most recently, the bankruptcy of KSL Media again illustrated the risks and concerns when an advertiser entrusts significant funds to an entity that is too thinly capitalized or, as some allege, guilty of diverting funds that were to be passed through and in breach of a fiduciary duty to its clients. KSL's bankruptcy, of course, was also noteworthy not because KSL was a start-up, but because it was not. We might expect capitalization risks with start-ups. But KSL was an established media company that failed. So the question remains: how can advertisers protect funds entrusted to suppliers, particularly those that are earmarked for payments to third parties?… Continue Reading
This post was written by Michael Venditto and Andy Rahl. During the first quarter of 2009, business bankruptcy filings were at the highest levels since 2001. If the pace of bankruptcies of large corporations continues at the current rate for the balance of the year, the number of large business bankruptcies will be the highest in … Continue Reading
This Alert compares the current recession to prior cycles, and summarizes precautions and protections that advertisers, agencies and media can employ to reduce their exposure to today’s risks. Background of the Credit Crunch It is generally understood that the ongoing credit crunch has led to a shortage of financial liquidity. We now seem to be … Continue Reading