Automatic Stay

News & Analysis as of

Lincoln General Insurance Company Enters Liquidation in Pennsylvania

The Insurance Commissioner of Pennsylvania has placed Lincoln General Insurance Company into liquidation in Pennsylvania. As a result, the Insurance Commissioner as Liquidator takes over the property, business, and affairs of...more

Court Rules that Medicare and Medicaid Payments to Nursing Home Must Continue Pending Jurisdictional Dispute

On October 27, 2015, United States District Judge James S. Moody, Jr. extended a stay of proceedings thereby permitting Bayou Shores SNF, LLC (“Bayou Shores”) to remain viable and continue receiving Medicare and Medicaid...more

Sixth Circuit Files Win for Bankruptcy Debtors Harassed During Automatic Stay

Creditors of bankruptcy debtors beware: a recent opinion from the Sixth Circuit Court of Appeals makes clear that creditors cannot circumvent the ban on collection efforts following the petition for bankruptcy by trying to...more

Delaware Bankruptcy Court Allows Debtor to Sidestep “Make-Whole” Payment

Bankruptcy Judge Christopher S. Sontchi recently ruled in the Energy Future Holdings case that the debtor will not be required to pay the $431 million “make whole” demanded by bondholders upon the debtor’s early payment of...more

50 Cent Files for Bankruptcy, Trades In Da Club for In Da Courthouse

The rapper Curtis James “50 Cent” Jackson III filed a voluntary chapter 11 bankruptcy petition in Connecticut bankruptcy court on Monday, July 13, 2015. Jackson rose to prominence with songs like In Da Club and P.I.M.P. from...more

Energy Future Holdings – More Bad News for Bondholders on Make-Whole Premiums

Make-whole premiums are often used in connection with the issuance of debt in order to protect noteholders with long term investment horizons from being repaid early. At the time of the bankruptcy filing of EFH in April 2014,...more

“Deed in Lieu”: Deed That Is Not Really In Lieu Of Foreclosure Will Likely Not Be Treated As a Deed

In re Primes, 518 B.R. 466 (Bankr. N.D. Ill. 2014) – A mortgagee moved for relief from the automatic stay, arguing that it acquired title to property prior to the bankruptcy under a quit claim deed given to it by the...more

Is an Underinsured Motorist Policy Subject to the Automatic Bankruptcy Stay?

Imagine: an employee is injured in a car accident with another driver who is at fault. The employee settles with the at-fault driver for the limits of her liability policy. The employee, whose injuries exceed the at-fault...more

OAS UPDATE: Bankruptcy Court Grants Limited Temporary Relief in Chapter 15 Case

Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15,...more

SCRA Post-Service Protections Extended

The Servicemembers’ Civil Relief Act (SCRA) was created to help relieve or suspend the financial burdens placed upon those serving in the U.S. military. One of the key protections afforded by the SCRA is a temporary stay of...more

Bankruptcy Beat: Single Asset Real Estate Debtor Could Not Show That Plan with Substantial Balloon Payment had a Realistic Chance...

At issue in GRG Acquisitions, LLC v. MDM Golf of Gillette Ridge, LLC (In re MDM Golf of Gillette Ridge, LLC), Case No. 14-21565 (ASD) (December 23, 2014), was whether relief from the automatic stay should be granted to a...more

Bankruptcy Beat: The Automatic Stay Does Not Preclude A Foreclosure Committee From Seeking Fees From A Non-Debtor Party In A...

On January 5, 2015, the Honorable Albert S. Dabrowski issued a decision concerning the applicability of the automatic stay of Bankruptcy Code Section 362(a) (the “Automatic Stay”), which decision highlights and clarifies...more

Derivatives in Review - March 2015

NYDFS Releases Revised BitLicense Proposal - On February 4, 2015, the New York State Department of Financial Services ("NYDFS") released a revised version of its proposed virtual currency regulations (commonly referred...more

When automatic stay violations require fee awards

In America’s Servicing Co. v. Schwartz-Tallard, 2014 DJDAR 12063, the United States Court of Appeal for the Ninth Circuit decided an interesting case arising from allegations that a debt servicing entity violated the...more

Real Estate Cases: Bad Faith Filing Does Not Necessarily Mean That You Are A Bad Person

In re Sterling Bluff Investors, LLC, 515 B.R. 902 (Bankr. S.D. Ga. 2014) – A mortgagee moved to dismiss a real estate debtor’s chapter 11 case, or in the alternative for relief from the automatic stay. It contended...more

Prepetition Stay Waivers: Which Way Is The Wind Blowing?

In re Triple A & R Inv., Inc., 519 B.R. 581 (Bankr. D. P.R. 2014) – A mortgagee moved for relief from the automatic stay based on the debtor’s prepetition consent to stay relief.  The debtor argued that a prepetition waiver...more

Delinquent Property Tax Collection: Dancing Around the Automatic Stay

In re Killmer, 513 B.R. 41 (Bankr. S.D.N.Y. 2014) – After reopening a bankruptcy case, a mortgagee moved for a determination that a post-petition delinquent property tax sale was void because it was held in violation of the...more

Creditor's Willful Violation of Automatic Stay Results in Fee Award

In Snowden v. Check Into Cash of Washington Inc. (In re Snowden), 2014 DJDAR 12677, the United States Court of Appeals for the Ninth Circuit decided a bankruptcy case involving the award of attorney fees....more

Rehearing Petition Dramatizes Second Circuit's Comity Rejection

Recognition of a foreign main proceeding under Chapter 15 of the Bankruptcy Code has “effects” under Section 1520 that are automatic and powerful, including application of the automatic stay of Section 362 and the...more

Automatic Stay: What Happens When a Case is Reopened?

U.S. Bank, N.A. v. Brumfiel (In re Brumfiel), 514 B.R. 637 (Bankr. D. Colo. 2014) – After a debtor reopened her chapter 7 bankruptcy case, a lender moved for relief from the automatic stay in order to continue with a...more

Stay Relief: What Happens to “Unreasonable” Fees?

Wells Fargo Bank, N.A. v. 804 Congress, L.L.C. (In re 804 Congress, L.L.C.), 756 F.3d 358 (5th Cir. 2014) – After an oversecured creditor obtained relief from the automatic stay and foreclosed on some property, the...more

Just When You Thought You Were Out, They Pull You Back In

It is a rare occasion for a secured lender to foreclose on collateral with a value in excess of the entire debt owed, particularly following a bankruptcy filing by the borrower, but on that rare occasion the lender should...more

Third-Party Protections In Mass Tort Chapter 11 Cases

A defendant facing thousands of mass tort lawsuits in federal and state courts throughout the country often will seek to address the litigation by seeking Chapter 11 relief under the Bankruptcy Code. The Chapter 11 process...more

Lender Risk Management for Bankruptcy Stay Violations

A recent decision by the U.S. Court of Appeals for the Ninth Circuit in a bankruptcy case highlights a risk to consumer lenders and suggests a practical approach to risk management through clear policies and employee...more

Subcontractors Can Still Perfect Mechanic’s Liens After Prime Contractors File Bankruptcy

One of the most common and effective ways for a subcontractor to secure a payment claim is to file a lien. Assuming any applicable, pre-lien notice requirements are satisfied, an unpaid subcontractor can lien a private...more

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