On May 20, 2019, the Supreme Court decided Mission Product Holdings, Inc. v. Tempnology, LLC, No. 17-1657.  In an 8-1 decision, and in a majority opinion authored by Justice Kagan, the Court held that  the debtor-licensor’s rejection of a trademark license under Section 365 of the Bankruptcy Code “has the same effect as a breach outside bankruptcy” and, as such,  the debtor, through such a rejection, could not rescind the non-debtor’s licensee’s right to continue to use the trademarks; in short, the debtor-licensor’s rejection of the license “cannot revoke the license.”  Slip Op. at 16-17.   Tempnology, of course, has immediate ramifications for structured finance vehicles involving trademarks licenses.  While Section 365(n) of the Bankruptcy Code gives the non-debtor licensee the option to retain the benefits of a rejected lease of intellectual property in return for continued royalty payments and the waiver of setoff and other rights, the Bankruptcy Code does not include trademarks within its definition of intellectual property;  until today, there has been a circuit split as to whether non-debtor licensees of trademarks had a similar option or whether the debtor effectively could rescind the license through rejection.  In Tempnology, the Court clearly holds that a debtor licensor cannot revoke a trademark license through rejection.

Continue Reading Not so distant ripples in the pond: The Supreme Court’s Tempnology decision and equipment leasing

On April 25th, the Alternative Reference Rates Committee, an advisory committee of the New York Federal Reserve Bank (ARRC), released recommended contractual fallback language for U.S. dollar LIBOR denominated floating rate notes and syndicated loans.

This language is part of ARRC’s mandate to help resolve issues with contracts that reference LIBOR.  The ARRC recommends the Secured Overnight Financing Rate (SOFR) as s replacement to LIBOR and has put in place a comprehensive plan of transition – the Paced Transition Plan

 

Mayer Brown Partners Ryan Suda and Sagi Tamir will speak at the 8th Annual Investors’ Conference on CLOs and Leveraged Loans being held on May 20-21, 2019 in New York City. This conference explores important industry and regulation updates, key trends, opportunities and challenging headlines facing the leveraged loans market.

Ryan Suda will moderate the panel on “The Innovation Game: Alternative CLO Structures” and Sagi Tamir will participate on the “Assessing the Landscape: Europe and the U.S.” panel on May 21.

Continue Reading Mayer Brown partners speaking at IMN’s investors’ conference on CLOs and leveraged loans

On Wednesday, April 10, Mayer Brown co-hosted with Fitch Ratings a “CLOs and Direct Lending in Chicago” seminar. This was the 7th consecutive annual iteration of this event with Fitch. An audience of over 120 attendees (and in excess of 200 registrants) heard from middle market participants and researchers. The agenda included a macroeconomic update by Fitch’s Chief Economist, a panel on the Growth and Appeal of Direct Lending as an Asset Class, a Regulatory Update by Mayer Brown lawyers Brian Hirshberg (counsel, NY), Adam Kanter (partner, DC), Joanna Nicholas (counsel, NY) and Sagi Tamir (partner, NY), a panel on CLO Dynamics and a keynote presentation by David Preston of Wells Fargo, who gave a Middle Market CLO 2019 Outlook. Attendees also enjoyed a networking reception that followed the seminar.

The presentation slides are available upon request to jgold@mayerbrown.com.

Mayer Brown Partners Paul Jorissen and Lauren Pryor will speak at the 6th Annual Residential Mortgage Servicing Rights Forum being held April 15-16, 2019 in New York City. This conference explores the key industry issues, including the origination trends, views from the regulators, and more.

Paul Jorissen will moderate the panel on “Financing in the MSR Market” and Lauren Pryor will moderate the panel on “Buying a Mortgage Servicer/Originator vs. Rights vs. Subservice” on April 15. Continue Reading Mayer Brown partners speaking at IMN’s residential MSR forum

Montana may be, like New Mexico and possibly Colorado,[1] permitting utility tariff bonds related to certain electrical generating plant retirements. If enacted as proposed, the law would be called the “Montana Energy Impact Assistance Act.” Continue Reading Utility tariff bonds for coal and other electrical generating plant retirements in Montana?

Joining other coastal states (including Florida, Louisiana and Texas[1]), North Carolina (NC) is considering permitting utility tariff bonds for storm recovery. In both SB 559, filed in NC’s Senate on April 2, 2019, and in HB 624, filed in NC’s House on April 4, 2019, storm recovery costs (and related storm recovery reserves) would be permitted to be covered by a required “financing order,” and an applicant utility obtaining such a financing order would be permitted to issue related utility tariff bonds and bill customers for a non-bypassable charge to repay those bonds. Continue Reading Utility tariff bonds for storm recovery in North Carolina—Coming to your state soon?

On March 15, 2019, the Japanese Financial Services Agency (the “JFSA”) published the final version of its amendment to the regulatory capital requirements relating to investments by certain types of Japanese financial institutions, including Japanese banks and bank holding companies, in securitizations. The amendment, which takes effect on March 31, 2019, adds to such regulatory capital requirements (i) a set of due diligence and information collection requirements for investments by covered Japanese financial institutions in securitizations and (ii) a risk retention rule for such investments. To provide guidance regarding these new regulatory requirements, the JFSA published, together with the final version of the amendment, a series of responses to selected comments that it received with respect to its initial proposal of these regulatory changes as well as a series of answers to frequently asked questions concerning the application of these regulatory changes. This Legal Update focuses on the risk retention rule portion of the amendment. Continue Reading Legal Update: New Japanese risk retention rule takes effect on March 31, 2019

In what we believe to the first and only transaction of its kind, the Connecticut Green Bank (Green Bank) is monetizing certain solar renewable energy credits (SHRECs) generated under its Solar Home Renewable Energy Program and sold to Connecticut Light and Power (d/b/a Eversource Energy) and United Illuminating (UI) according to a related presale report (and as had been announced in an earlier request for proposal). Continue Reading Connecticut green bank monetizes solar renewable energy certificates in a rated securitization

As anticipated, Japan’s Financial Supervisory Authority (FSA) has released its final risk retention rule (in Japanese) in substantially the same form (including as to grandfathering) as FSA had previously published last December. Our chart comparing the Japanese proposal with existing EU and US risk retention requirements is here. FSA has also released related FAQs as well as responses to comments received.