Bankruptcy court held that the buyer purchased the assets free and clear of any copyright interests held by the photographer supplier.
M&A Stories
October 3, 2022
Introduction
In a recent bankruptcy case, a buyer who acquired assets from a bankrupt NYC grocery chain obtained the right to display photographs even though the copyright license had expired prior to the seller’s bankruptcy filing. The court ruled in favor of the buyer, stating that the purchase included the assets free and clear of any photographer’s interests.
Background
When the buyer purchased some of the stores in a bankruptcy sale, they also acquired the store furnishings that contained photographs subject to a copyright license previously held by the seller. However, this license had already expired before the seller filed for bankruptcy.
Lawsuit
The photographer, seeking to prevent the buyer from using the photographs, brought the case to bankruptcy court. The court determined that the buyer had obtained the store furnishings and photographs without any rights or claims from the photographer.
See In Re Old Market Group Holdings Corp., Case No. 20-10161 (JLG), (Jointly Administered), United States Bankruptcy Court, S.D. New York, (September 21, 2022).
Comment
Typically, when a buyer purchases assets from a business in bankruptcy, they acquire those assets free and clear of any claims or interests. The photographer argued that they should have been given notice of the proposed sale as a known creditor, but the court deemed this objection untimely since it was not raised earlier in the proceedings. As a result, the photographer’s notice argument was dismissed.
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