News & Analysis as of

Chapter 7

Tax Sales and Bankruptcy Stays

It is well understood that under section 362 of the Bankruptcy Code, a bankruptcy filing triggers an “automatic stay” preventing creditors from taking any act to obtain possession of or enforce a lien against property of the...more

Sixth Circuit Adopts Minority Interpretation of Mootness

by Robins Kaplan LLP on

The United States Court of Appeals for the Sixth Circuit recently held that parties arguing mootness under section 363(m) of the Bankruptcy Code must establish that the appellate court is unable to grant effective relief...more

Anticipating and Managing Bankruptcy Risk

by Blank Rome LLP on

Blank Rome Partner Ira Herman authored “Anticipating and Managing Bankruptcy Risk,” a series of articles prepared for the Financial Restructuring & Bankruptcy module of Lexis Practice Advisor, a comprehensive practical...more

Supreme Court Rules: Even Gifts Must Play by the (Absolute Priority) Rule

by PretiFlaherty on

Last week, the Supreme Court handed down its opinion in Czyzewski v.Jevic Holding Corp., stating that non-consensual, priority violating, structured dismissals are not allowed under the Bankruptcy Code. In a well-reasoned...more

Breach of Fiduciary Duty (and Related) Claims Are Not Easily Defeated: A Case Study in Motions for Judgment on the Pleadings

by Robins Kaplan LLP on

Just what must be alleged for claims for breach of fiduciary duty to proceed past initial pleadings and into meaningful fact development? In a recent decision, the United States Bankruptcy Court for the Eastern District of...more

Best in Law: How Courts Sort Out Property Rights in Tough Bankruptcy Cases

by Best Best & Krieger LLP on

A Chapter 7 bankruptcy liquidation proceeding, in its simplest form, is straightforward. When a person or company is unable to pay its debts, a bankruptcy trustee is appointed. The debtor’s property becomes a bankruptcy...more

Ruined, Missing Wine leads to Million Dollar Hangover for Debtor

by Bryan Cave on

A Chapter 7 debtor’s failure to comply with a bankruptcy court order to preserve a $2 million dollar-plus collection of fine wines has led to the imposition of sanctions of over $1 million, most of which could be charged...more

A Hypothetical Question Deserves a Hypothetical Answer: The Ninth Circuit’s Approach to Preference Transfers in In re Tenderloin...

As a creditor, the news of a debtor who owes you a substantial sum of money filing bankruptcy is often the most alarming news you can learn—that is, until you seek advice of counsel and learn that payments the debtor made to...more

2016 Bankruptcy Statistics for the Western District of Wisconsin: Overall Filings Decreased 5.5%, but Chapter 12 Farm Bankruptcies...

by Ruder Ware on

The 2016 bankruptcy statistics tell an interesting story.  While the total number of bankruptcy cases filed in 2016 in the Western District of Wisconsin (“WDW”) fell 5.5% to its lowest level in ten years, Chapter 12 farm...more

U.S. Bankruptcy Court Reminds Us to “Get the Note” or File a Financing Statement

by K&L Gates LLP on

In a recent opinion, the U.S. Bankruptcy Court for the District of Oregon reminds all finance lawyers (and participants trying to document a finance transaction without legal assistance) that recording an “assignment” of a...more

Paid Rejection: Bankruptcy Court Allows Professional Fees Despite Trustee’s Flawed Strategy

by Robins Kaplan LLP on

Can a bankruptcy court deny fees requested by a professional simply because her client chose a poor strategy? The Bankruptcy Court for the District of Idaho recently rejected such a notion, holding that an accounting...more

Financial Services Weekly News - February 2017 #3

by Goodwin on

Editor's Note - A Not So New Tool for Reigning in Federal Regulations. President Trump has signed a Joint Resolution of Congress which “disapproves the rule submitted by the SEC relating to ‘Disclosure of Payments by...more

Lenders Seeking Loan Modification After Bankruptcy, Beware!

by Ward and Smith, P.A. on

Lenders cannot revive a guaranty obligation discharged in bankruptcy with a subsequent modification or forbearance agreement, even with new consideration; and attempting to do so may lead to lender liability exposure....more

Massachusetts Bankruptcy Court Sends a Reminder on Avoiding the Substantive Consolidation Trap

There are numerous reasons why a company might use more than one entity for its operations or organization: to silo liabilities, for tax advantages, to accommodate a lender, or for general organizational purposes. Simply...more

Imperfect!!! – Recordation Alone May Not Be Suficient To Perfect Deeds Under California Law

by Ervin Cohen & Jessup LLP on

Once a lender records a deed of trust, isn’t that sufficient under California law to perfect the deed against a Chapter 7 trustee’s attempt to set it aside? Based on the recent bankruptcy court decision of In re Nowlin, the...more

When Construction Contracts Go Sideways in Bankruptcy

The contractor on a project files a bankruptcy case. How should the property owner and subcontractors proceed? When a party to a contract files bankruptcy, the other party’s actions are constrained by the bankruptcy code....more

No Trustee Left Behind – Another Bankruptcy Court Requires Colleges to Return Tuition to the Bankruptcy Estate

by Bryan Cave on

Another bankruptcy trustee catches another hapless college unaware. In Roach v. Skidmore College (In re Dunston), Bankr. S.D. Ga. (Jan 31, 2017), a trustee appears to win the next battle of “bankruptcy estates v. child’s...more

Mass. Bankruptcy Court: Mortgage with Incorrect Legal Description Is Avoidable by Chapter 7 Trustee

by Goodwin on

On January 4, 2017, the United States Bankruptcy Court for the District of Massachusetts found that a Chapter 7 Trustee could avoid the debtor’s mortgage and preserve it for the benefit of the bankruptcy estate. The opinion,...more

Substantive Consolidation: It’s Alive and Well (or Maybe Just Alive)

by Dechert LLP on

The doctrine of substantive consolidation (generally- the power of a bankruptcy court to consolidate the assets and liabilities of affiliated entities in bankruptcy) is a recognized remedy exercised by bankruptcy courts – one...more

Southern District of New York holds that intercreditor agreement allows for payment of subordinated lender’s post-petition...

by King & Spalding on

On January 27, 2017, the United States District Court for the Southern District of New York ruled that the subordinated creditor was entitled to payment of post-petition interest prior to repayment of the senior lender’s...more

Be Sure to Observe Formalities to Protect Business Assets

by Burns & Levinson LLP on

When entering into a new venture, it is not uncommon for a new legal entity to be formed in order to insulate an existing company from the liabilities associated with the new business. While the law absolutely permits this, a...more

Massachusetts Bankruptcy Court Finds that Debtor Can Claim an Exemption in Her Home Even if She Does Not Live There

by PretiFlaherty on

In a recent decision, the bankruptcy court for the District of Massachusetts found that a debtor who had not lived at a property for over 30 years could still claim an exemption in that property, even though her principal...more

Admission of Fraudulent Intent Is Not Conclusive Evidence of Fraudulent Intent (Sometimes)

by Robins Kaplan LLP on

In a previous blog post, we discussed a situation in which actual fraud could be found where the transferor had the noblest of intentions and had demonstrated no intent to defraud creditors. This week, we address a situation...more

Supreme Court Hears Argument on Stale Claims and FDCPA

by PretiFlaherty on

As reported on our blog, the Eleventh Circuit ruled that filing a time barred proof of claim does not violate the Fair Debt Collection Practices Act, an issue which has divided courts and Courts of Appeals. The Supreme Court...more

First Circuit: Sending Form 1099-A Post-Chapter 7 Discharge Does Not Violate the Discharge Injunction

by Goodwin on

On December 14, 2016, the United States Court of Appeals for the First Circuit affirmed the New Hampshire Bankruptcy Court and District Courts’ findings that a mortgage lender sending Internal Revenue Service Form 1099-A to a...more

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