8/25/23 The Firm Obtains Complete Dismissal of Two Bankruptcy Actions Related to Judgement Collection Action

On August 25, 2023, the Firm obtained dismissal with prejudice of two bankruptcy actions that debtor companies filed in an attempt to obstruct collection of a huge money judgment against them. Late last year, the Firm prevailed in an arbitration against two companies that alleged our client misappropriated their trade secrets and confidential information in connection with an international business opportunity. After their claims for tens of millions of dollars were dismissed, the arbitrators granted our motion for attorneys’ fees and costs. Shortly after the award issued, the companies filed a bankruptcy petition, which the Firm contested.

Following accelerated discovery, including deposition of the debtors, the Firm sought dismissal of the bankruptcies on various grounds, including fraudulent conveyance of millions of dollars in intellectual property rights. At deposition, the Firm obtained crucial admissions that just prior to filing for bankruptcy, the companies voluntarily relinquished certain exclusive IP rights to a shareholder who in turn licensed them to a third party for millions of dollars in present and future expected royalties. A federal district court action seeking to execute on the award is proceeding. If you have any questions regarding our litigation and arbitration practices you can contact Jerry Hawxhurst or Kyle Foltyn-Smith to discuss.