Commercial Bankruptcy Debtor-Creditor

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Bankruptcy Beat: Seventh Circuit Broadens Ordinary Course of Business Defense to Protect Payments from Preference Recovery

In Unsecured Creditors Committee of Sparrer Sausage Company, Inc. (In Jason’s Food, Inc.), 2016 WL 3213096 (7th Cir. June 10, 2016), the Seventh Circuit Court of Appeals rejected a Bankruptcy Court’s narrow application of the...more

A Win for Creditors: The United States Supreme Court Expands the Meaning of Actual Fraud for Bankruptcy Discharge

The United States Supreme Court recently decided a case that will be a powerful tool for lenders dealing with borrowers who engage in schemes to avoid payment of their debts, such as an improper transfer of their assets...more

Supreme Court’s discharge exception ruling gives creditors more options

One goal of bankruptcy for individuals is the discharge of debts, meaning that, upon the successful completion of their bankruptcy case, the debtor is no longer personally responsible for the obligations owed prior to the...more

U.S. Supreme Court Expands Types of Fraud Which May Bar a Bankruptcy Discharge

The Supreme Court has rewarded creditors and their attorneys with a decision expanding the kinds of “actual fraud” which will prevent the discharge of a bankruptcy debtor. Some lower courts had held that to prevent a...more

Supreme Court Expands Fraud Exception to Favor Creditors

On May 16, 2016 the United States Supreme Court issued an opinion regarding the meaning of “actual fraud” under the Bankruptcy Code. Husky Int’l Electronics, Inc. v. Ritz represents a win for creditors by making it easier to...more

High Court Rejects Narrow Bankruptcy Fraud Exemption

In its recently issued decision in Husky International Electronics, Inc. v. Ritz, a 7-1 majority of the Supreme Court has clarified that intentionally fraudulent transfers designed to hinder or defraud creditors can fall...more

Supreme Court Issues Opinions Favorable to Financial Services Companies

May is usually a busy month on the Supreme Court before the justices head off for some summer R&R. It is historically a time when many opinions are issued, and May 2016 has been no exception. ...more

High Court Broadens the Definition of “Actual Fraud” under Section 523(a)(2)(A)

The Supreme Court’s Decision: On May 16, 2016, in Husky International Electronics, Inc. v. Daniel Lee Ritz, Jr., Case No. 15-145, the Supreme Court held that the term “actual fraud” in § 523(a)(2)(A) of the Bankruptcy...more

Supreme Court Rules Exception to Bankruptcy Discharge for Fraud Claims Extends to Fraudulent Transfer Liability

In a decision rendered on May 16, 2016, in the case of Husky International Electronics, Inc. v. Ritz, the U.S. Supreme Court ruled that the exception to bankruptcy discharge for debts incurred through actual fraud applies to...more

Supreme Court Decides Husky International Electronics, Inc. v. Ritz

On May 16, 2016, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz (No. 15-145), holding that the term “actual fraud” in § 523(a)(2)(A) of the Bankruptcy Code (one of the discharge exceptions)...more

Termination of a Commercial Lease May be an “Avoidable Transfer” in Bankruptcy, holds Seventh Circuit

In March 2016, the U.S. Court of Appeals for the Seventh Circuit ruled that a landlord may be liable to a debtor’s bankruptcy estate for the value of a lease the debtor terminated early, holding the termination may be an...more

Seventh Circuit Holds That Termination of a Commercial Lease Prior to Tenant’s Bankruptcy May be an “Avoidable Transfer”

On March 11, 2016, the US Court of Appeals for the Seventh Circuit (the “Court”) ruled that a termination of lease that occurred prior to the tenant’s bankruptcy may be an “avoidable transfer” under title 11 of the United...more

[Webinar] Dealing with Financially Troubled Customers Outside and Inside of Bankruptcy - Sept.16, 12:00pm CDT

This presentation is designed to provide business professionals involved in supplying goods and/or services on credit with the latest and most effective strategies for dealing with customers experiencing financial difficulty....more

Chapter 11 Sales: Believe It Or Not, There Really Are Limits

In re P.D.M. Co., 523 B.R. 558 (Bankr. W.D. Mich. 2015) – Two affiliated chapter 11 debtors sought court approval of a sale of all of their assets out of the ordinary course of business free and clear of claims.  The...more

The ABI Commission on Business Bankruptcy Reform: Providing Information and Fairness to Creditors

Will Congress Finally Act? This is the fourth in a series of Alerts regarding the proposals made by the American Bankruptcy Institute Commission to Reform Chapter 11 Business Bankruptcies. We discuss here the Commission’s...more

Bankruptcy & Restructuring Litigation Update - May 2015

New Bankruptcy Challenges for Secured Creditors. The Bankruptcy Code provides secured creditors with significant advantages over their unsecured counterparts. During the past year, however, courts have chipped away at secured...more

Recent Unitranche Issues in the RadioShack Bankruptcy Case

As the market for so-called “unitranche” credit facilities continues to increase, the Delaware Bankruptcy Court had an opportunity recently to answer positively the question of whether bankruptcy courts will enforce the...more

Deprizio waivers in bankruptcy cases: Valid, or a sham?

The Ninth Circuit Court of Appeals in In Re Adamson Apparel, Inc. became the first appellate court to address the validity of “Deprizio waivers.” In Adamson, the court held that because the Deprizio waiver was not a “sham”...more

Delaware Bankruptcy Court Grants Summary Judgment Based On Ordinary Course of Business Defense

On December 18, 2014, Bankruptcy Judge Christopher Sontchi issued an opinion granting summary judgment in favor of defendant and against trustee who sought to avoid and recover $1,181,583.84 as preferential transfers pursuant...more

The Business Reality of Bankruptcy Preferences

One of the more demanding, day-to-day aspects of running a business is collecting on accounts receivable. If a customer files bankruptcy, the situation can become more frustrating, and complicated. The customer is now...more

Cœur Défense: the Chronicle of a Foretold Reform of the French Safeguard Proceedings

The end of a legal saga - On April 7, 2014, the Commercial Court of Paris put an end to the Coeur Défense’s legal saga by acknowledging the implementation of the two safeguard plans adopted for Heart La Défense (HoLD),...more

No Claim for “Financial Unseaworthiness” When Passengers Never Board Vessel

This case arose in a bankruptcy proceeding. A creditor had pre-paid a substantial sum for cruises on a vessel. The vessel owner and operator filed bankruptcy before the cruises took place, and the creditor sought return of...more

Third Circuit Concludes Personal Injury Causes of Action Against a Successor to Debtor’s Business are Generalized Claims

In a novel decision, the United States Court of Appeals for the Third Circuit held, in its ruling In re Emoral, Inc., 740 F.3d 875 (3d Cir. 2014), that personal injury claims of individuals allegedly harmed by a bankrupt...more

Eighth Circuit Applies Subsequent New Value Defense To Payments Received From Third Party Creditor

The Eighth Circuit held that preferential payments are subject to a new value defense of § 547(c)(4) where the new value was provided by a third party that benefitted from the preferential transfers....more

Proof of Claim Could Cost You Your Privilege - Bankruptcy Court Holds Attorney's Signature on Proof of Claim Form Renders Attorney...

A properly filed proof of claim serves as prima facie evidence as to a claim's validity. But when this written statement is signed by a creditor's attorney, the court may find that the attorney has become a fact witness and...more

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