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Education Bankruptcy

Read need-to-know updates, commentary, and analysis on Education issues written by leading professionals.

Private Schools Defeat Clawback Claim by Chapter 7 Trustee

by Shipman & Goodwin LLP on

Over the last few years, Chapter 7 Trustees have aggressively sought to clawback tuition payments made to colleges and universities by parents on behalf of their children after the parents filed for Chapter 7 bankruptcy....more

The Non-Dischargeable Student Loan - BB&K Attorney Cathy Ta Writes for Riverside Lawyer Magazine

by Best Best & Krieger LLP on

Obtaining a bankruptcy discharge of debts is the primary tool in providing the "honest but unfortunate debtor" a fresh start. Yet, a student loan made or guaranteed by a governmental unit or nonprofit is excepted from the...more

The Supreme Court - March, 2017 #3

by Dorsey & Whitney LLP on

The Supreme Court of the United States issued decisions in three cases today: Czyzewski v. Jevic Holding Corp., No. 15-649: Respondent Jevic Transportation filed for Chapter 11 bankruptcy. This spawned two lawsuits. ...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

Second Circuit Adopts Narrow Interpretation of Trust Indenture Act Provision Intended to Protect Bondholders

On January 17, the US Court of Appeals for the Second Circuit rendered a much anticipated decision in Marblegate Asset Management, LLC v. Education Management Corp., No. 15-2124-cv(L), 15-2141-cv(CON), reversing the Southern...more

The Trend Reverses: College Tuition Payments Shielded from Avoidance in Bankruptcy - Bankruptcy Court Rules in Favor of University...

by Holland & Knight LLP on

It is the start of a new semester, and all across the country, parents are writing tuition checks to the colleges and universities that their children attend. Colleges accept the checks on behalf of the students, the tuitions...more

Caught in the Cross-Fire: Student Loan Lenders and Servicers’ Risks in the Bankruptcy Fight over College Tuition Clawbacks

Many parents hope to fund, in some part, their children’s college educations, and the federal government has created a system of incentives, including tax advantaged 529 plans, to support that expectation. Recent research...more

Court Grants Student Loan Debt Relief to a Graduate of a Non-Accredited Medical School

by Dorsey & Whitney LLP on

On April 4, 2016, the U.S. Bankruptcy Court for the Eastern District of New York issued a decision that may significantly change the landscape of student debt relief. In re Decena, No. 15-72903, 2016 WL 1371031 (Bankr....more

Perspectives - September/October 2015

by Benesch on

In a decision in which no opinion commanded a majority, the Ohio Supreme Court sided with a private entity — a charter school operator — in a dispute over the ownership of personal property purchased by the operator with...more

Reversing the Trend: Will Congress Act to Except College Tuition Payments from Clawback in Bankruptcy? - Congress Weighs...

by Holland & Knight LLP on

A trend emerging in consumer bankruptcy cases around the U.S. is causing concern for many parents, students and undergraduate schools. As was reported by The Wall Street Journal in an article published on May 5, 2015, an...more

Bankruptcy Beat: An Emerging Trend: Bankruptcy Trustees Seeking to Claw Back Tuition Payments Made by Unsuspecting Parents

by Pullman & Comley, LLC on

A developing trend in our nation’s bankruptcy courts has been the number of lawsuits filed or threatened by bankruptcy trustees to recover tuition payments made by a student’s parents when the parents later file for...more

Bankruptcy Trustees Target Colleges and Universities

by Ballard Spahr LLP on

Over the past few years, higher education institutions have seen an increase in litigation from an unexpected source: bankruptcy trustees. Trustees appointed in personal bankruptcy cases are seeking to claw back tuition...more

For-Profit Corinthian Colleges, Inc. Files Chapter 11 Bankruptcy In Delaware

by Morris James LLP on

On May 4, 2015, one of the largest for-profit post-secondary education companies in the United States and Canada, Corinthian Colleges, Inc., and 24 of its affiliates, filed voluntary chapter 11 petitions in the Bankruptcy...more

General Assembly Considers Municipal/Local Government Bankruptcy Legislation

by Franczek Radelet P.C. on

Illinois legislators are considering a bill that would amend the Illinois Municipal Code to allow municipalities and other local government entities to file for bankruptcy. Representative Ron Sandack (R-Downers Grove) has...more

Real Property, Financial Services & Title Insurance Update: Week Ending February 6, 2015

by Carlton Fields on

REAL PROPERTY UPDATE - Service of Process: return of service is not required to expressly list the factors defining the “manner of service” contained in Section 48.031(1)(a), Florida Statutes, not included in the...more

7th Circuit Provides (No) Clarity on Compulsory Counterclaims

by Foley & Lardner LLP on

Federal procedure requires a defendant to plead all counterclaims that arise out of the same transaction or occurrence as the plaintiff’s claim, or his claim may be barred in a later suit. Fed. R. Civ. P. 13(a). Although the...more

Why colleges in bankruptcy should have access to federal financial aid

by Thompson Coburn LLP on

With the reauthorization of the Higher Education Act (HEA) in full swing, the time is ripe for Congress to reconsider current laws prohibiting postsecondary institutions that declare bankruptcy from participating in the...more

Restructuring in Higher Education

by DLA Piper on

Since 2011, there have been an increasing number of restructurings in higher education. What may have started with the foreclosure and sale of ATI Schools and Colleges has continued this year with last month’s conversion of...more

Protecting Private Wealth: Recent Bankruptcy Cases Involving Tuition Payments and Profit Sharing Plans

by BakerHostetler on

Two recent decisions may affect the assets of individuals available to satisfy creditors' claims in bankruptcy. In the first decision, the Bankruptcy Court for the Eastern District of New York determined that married, joint...more

Are School Tuition Payments Fair Game For Bankruptcy Trustees in Parents' Personal Bankruptcy?

by Pullman & Comley, LLC on

Parents who are forced to file for personal bankruptcy may be surprised to find that school tuition payments they made for their children years earlier could become the target of recovery by an aggressive bankruptcy trustee. ...more

Dean: Law Schools Use Merit Scholarships To Boost Rankings

by Bloomberg Law on

Oct. 10 ( Bloomberg Law) -- Law schools need to find ways to cut the expense of merit scholarships, which they "use to buy students . . . with high LSATs" to improve the schools' US News rankings, Brooklyn Law School Dean and...more

What is an Irrevocable Trust?

by Jaburg Wilk on

Phoenix business law firm Jaburg Wilk's Estate Planning attorney Beth Cohn discusses irrevocable trusts. She talks about how people use them and the process involved with them. She explains what decanting is and the...more

Student Loans: Nondischargeability Questioned in Seventh Circuit and Beyond

Conventional wisdom says that it is nearly impossible to obtain a discharge of student loan debt in bankruptcy. Indeed, Section 523(a)(8) expressly excepts student loans from discharge, unless the exception of such...more

Bill on Bankruptcy: Easterbrook Turns the Tide on Student Loans

by Bloomberg Law on

April 18 (Bloomberg) -- Why and when U.S.-managed hedge funds can go bankrupt in the Caribbean, not in the U.S., is the first item discussed on the new bankruptcy video with Bloomberg Law's Lee Pacchia and Bloomberg...more

New Legislation Introduced to Allow Discharge of Private Student Debt

by Dechert LLP on

The Consumer Financial Protection Bureau (the “CFPB”) reported in 2012 that U.S. borrowers are burdened by more than $1 trillion in student debt, including over $150 billion of private student loans. According to TransUnion,...more

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