News & Analysis as of

Debtors

Only The Financially Distressed May File For Bankruptcy

by Fox Rothschild LLP on

On February 13, 2018, Judge Silverstein of the Delaware Bankruptcy Court granted a motion to dismiss the Rent-A-Wreck of America bankruptcy case (Bankr. D. Del. case 17-11592). Judge Silverstein’s opinion is available here...more

Maine Ups the Ante on Debt Collection Licensing

by Hinshaw & Culbertson LLP on

The State of Maine recently enacted legislation that greatly expands those entities required to obtain a debt collection license. Previously, a debt collector needed to obtain a license if it was attempting to collect a debt...more

Pierre v. Midland Credit: Three Significant Lessons for Debt Collectors

by Locke Lord LLP on

On February 5, 2018, debt collectors took a significant defeat in the United States District Court for the Northern District of Illinois in Pierre v. Midland Credit Management, Inc., 1:16-cv-02895. Judge Henry D. Leinenweber...more

Winning While Losing with Attorneys' Fees Provisions

by Ward and Smith, P.A. on

The United States District Court for the Middle District of North Carolina recently issued a decision that demonstrates the power of attorneys’ fees provisions in promissory notes and guaranty agreements. In TD Bank v. Jay...more

Third Circuit Holds “Settlement Language” in Collection Letter Can Be Misleading

by Blank Rome LLP on

In a change of course from its prior holding in Huertas v. Galaxy Asset Mgmt., 641 F.3d 28 (3d Cir. 2011), the Third Circuit rules that the terms “settlement” and “settlement offer,” in connection with collecting of a time...more

Read Before You Leap: Providing Telephone Number To Communicate With Collector Does Not Overshadow Validation Rights

by Hinshaw & Culbertson LLP on

The New Jersey federal court has rejected a claim that providing a debtor with a telephone number and other options to communicate with a collector does not overshadow required language that the debtor must dispute the debt...more

The First Circuit Casts a Shadow on Sunbeam

In the recently decided case, Mission Product Holdings, Inc. v. Tempnology, LLC, the United States Court of Appeals for the First Circuit took a hardline position that trademark license rights are not protected in bankruptcy....more

4th Circuit Defines “Defendant” Narrowly under CAFA for Federal Jurisdiction

by Weiner Brodsky Kider PC on

The Fourth Circuit recently reaffirmed its holding in Palisades Collections LLC v. Shorts, 552 F.3d 327 (4th Cir. 2008), that an additional counter-defendant is not entitled to federal removal jurisdiction under the Class...more

“Golden Share” Equity Holder Can Bar Bankruptcy Filing

The Bankruptcy Court in the Southern District of Mississippi (the “Court”), in In re Franchise Services of North America, Inc., Case No. 1702316EE (Bankr. S.D. Miss. Dec. 18, 2017), upheld the blocking power held by a...more

One and Done. Cramdown Requirement for an Impaired Assenting Class Applies on a Per-Plan, Not a Per-Debtor, Basis.

Confirmation of a Chapter 11 plan of reorganization generally requires the consent of each impaired class of creditors. But, upon satisfaction of additional statutory requirements, a plan proponent can obtain confirmation of...more

Preference Actions Filed In Hancock Fabrics

by Fox Rothschild LLP on

On January 31, 2018, Hancock Fabrics Inc., the post-effective date debtor, filed approximately 68 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and...more

Third-Party Releases in Chapter 11 Plans

by Hogan Lovells on

U.S. Bankruptcy Judge Kevin Gross sitting in Delaware recently approved J.G. Wentworth’s (the “Debtor’s”) Chapter 11 plan after overruling an objection from the U.S. Trustee regarding third-party releases. The Debtor’s...more

Enforcing a Security Interest in Domain Names

by McGuireWoods LLP on

For many businesses, a domain name is among its most valuable assets. Lenders routinely seek to use domain names as collateral. However, perfecting a security interest in a domain name is only the first step because...more

Eastern District of New York Court Holds Debt Collection Letter Stating Settlement May Have Tax Consequences Does Not Violate the...

by Blank Rome LLP on

In Ceban v. Capital Management Services, L.P., Case No. 17-cv-4554 (E.D.N.Y. Jan. 17, 2018), the District Court held that the statement “[t]his settlement may have tax consequences” in a debt collection letter does not...more

Lease Profit-Sharing Provision Unenforceable Condition to Assignment in Bankruptcy

by Jones Day on

In Antone Corp. v. Haggen Holdings, LLC (In re Haggen Holdings, LLC), 2017 WL 3730527 (D. Del. Aug. 30, 2017), the U.S. District Court for the District of Delaware considered whether, as part of a bankruptcy asset sale, a...more

New York Bankruptcy Courts Hold That a Debtor’s Failure to Make Postpetition Loan Payments is a Basis for Granting Relief from the...

by Pullman & Comley, LLC on

February 2, 2018 There are basically two alternative grounds for a secured lender to achieve a lifting of the automatic stay imposed by the bankruptcy filing of its borrower. One is to establish that the debtor has no equity...more

Eighth Circuit rejects foreseeability test for notice to unknown creditors

In Dahlin v. Lyondell Chemical Co., 2018 U.S. App. LEXIS 1956 (8th Cir. Jan. 26, 2018), the Eighth Circuit Court of Appeals rejected an argument that bankruptcy debtors were required by due process to provide more prominent...more

Split Third Circuit Holds Transfer By Non-Debtor Cannot Be Fraudulent Transfer

Refusing to rely on “equitable principles” when interpreting the Delaware Uniform Fraudulent Transfer Act (DUFTA), the Third Circuit (2-1 decision) in Crystallex Int’l Corp. v. Petroleos De Venezuela, S.A, et als. held that a...more

Restructuring and Insolvency Bulletin Issue 3 - January 2018: Takata's Japanese Bankruptcy Case Survives Public Policy Objection

by Dechert LLP on

As has been widely reported, over the last several years Takata Corporation and its various worldwide subsidiaries (together “Takata”) have been involved in a multitude of governmental investigations, class actions and...more

Fraudulent Transfer Act: Be Wary Of The Uncollectable Judgment Debtor

by SmithAmundsen LLC on

Financial institutions that become judgment creditors should always take a hard look at a judgment debtor’s financials and assets after getting a judgment against them. This is especially the case if the financial institution...more

Western District of Wisconsin Ranks 1st in the Nation in Chapter 12 Farm Bankruptcy Filings in 2017.

by Ruder Ware on

Low grain and milk prices have negatively affected Wisconsin’s ag economy for a few years now. As further evidence of the financial stress on Wisconsin farmers, the national bankruptcy statistics show that, in 2017, more...more

Limiting Ponzi Scheme Recoveries in Bankruptcy: United States Supreme Court Declines to Review Fraudulent Transfer Ruling in Favor...

by Ward and Smith, P.A. on

The United States Supreme Court recently declined to review a decision from the United States Court of Appeals for the Fourth Circuit favorable to a bank regarding alleged fraudulent transfers to the bank. In doing so, the...more

Bankruptcy Court Holds Credit Union Policy Does Not Violate Discharge Injunction

by Nexsen Pruet, PLLC on

CentsAbility: Creditors' Rights Law Update - A New York Bankruptcy Court has held that a statement from a credit union in response to a Chapter 7 debtor who received a discharge of his obligations owed to the credit union ...more

3rd Circuit Holds Delaware Tolling Statute Does Not Apply to Out-of-State Resident Subject to Service of Process

by Weiner Brodsky Kider PC on

The U.S. Court of Appeals for the Third Circuit recently held that under Delaware law, a debtor’s out-of-state residency alone did not toll the Delaware statute of limitations. The Third Circuit overturned the U.S. District...more

Exelco’s US Chapter 11 Case Dismissed in Favor of Belgian Proceeding

by Dechert LLP on

The Delaware Bankruptcy Court recently dismissed a Chapter 11 bankruptcy case pending before it and recognized, under Chapter 15 of the Bankruptcy Code, the debtor’s bankruptcy proceeding in Belgium. Exelco NV (“Exelco”), a...more

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