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Dischargeable Debts Commercial Bankruptcy

ArentFox Schiff

Breaking: Third Circuit Declares Mallinckrodt’s Future Royalty Payment Obligations Dischargeable – Caution, Warning, and Options

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On April 25, the US Court of Appeals for the Third Circuit issued its precedential opinion in Mallinckrodt v. Sanofi-Aventis, Case No. 23-1111, reminding everyone that “creditors take on risks” when it ruled that the debtor...more

Latham & Watkins LLP

Third Circuit Finds Future Royalty Obligations From Sale Transaction Dischargeable in Bankruptcy

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The Third Circuit ruled that the obligations are prepetition “contingent and unliquidated” claims that can be discharged in a bankruptcy. In the chapter 11 bankruptcy of Mallinckrodt plc and certain subsidiaries (In re...more

Kerr Russell

U.S. Supreme Court to Address Permissibility of Non-Consensual Third-Party Releases in Chapter 11 Bankruptcy Plans

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As the calendar turns to autumn, the United States Supreme Court (“SCOTUS”) is commencing its new term and preparing to address a monumental issue that will impact chapter 11 law and the mass tort system: the permissibility...more

Troutman Pepper

Washington Becomes Latest State to Decide Bankruptcy Impact on Debt Collection Statute of Limitations

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In April, we discussed how Colorado’s state supreme court issued its highly anticipated decision confirming a borrower’s bankruptcy discharge does not accelerate secured installment debt or trigger the final statute of...more

Nelson Mullins Riley & Scarborough LLP

Free and Clear of Post-Petition Guarantor Liability—Not So Fast: A Bankruptcy Discharge May Not Apply to Post-petition Claims...

A somewhat common question that arises after a bankruptcy discharge is granted is whether post-petition liabilities are discharged under pre-petition agreements, like guaranties. To describe the issue in more digestible...more

Kerr Russell

Third-Party Releases In Chapter 11 Bankruptcy

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Historically, a business (known as a debtor) filed for chapter 11 to restructure its debts owed to creditors through a plan of reorganization. The debtor would receive a discharge of any debts not required to be repaid under...more

A&O Shearman

Directors’ Duties in an Insolvency Context: Where Creditor and Shareholder Interests Collide

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UK Supreme Court gives important judgment on directors’ “creditor duty” The UK Supreme Court in BTI 2014 LLC v Sequana SA and ors [2022] UKSC 25 has given an important judgment clarifying the nature of the so-called “creditor...more

Winstead PC

Court Held That Those In Control Of A Limited Liability Company May Owe Fiduciary Duties To The Company And Its Members

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​​​​​​​In In re Mijares, a plaintiff claimed that a defendant defrauded him and breached fiduciary duties owed to him by charging improper, excessive, and unauthorized expenses to their medical practice, causing the...more

Ward and Smith, P.A.

Corporate Bad Behavior Is Not Dischargeable Under Subchapter V

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If a business engages in bad behavior like intentional interference with contract and tortious interference with business relations, then it may not use Subchapter V of Chapter 11 to discharge debts based on that bad...more

Proskauer - Health Care Law Brief

Diagnosing Distress: Top 5 Challenges for Private Credit Lenders in Health Care Restructurings

Despite the strength of the U.S. economy headed into the New Year, a variety of conditions may be conspiring against businesses in certain segments of the health care industry. These include reduced patient census at skilled...more

Miles & Stockbridge P.C.

Maryland Bankruptcy Court Rules Corporate Debtors May Discharge Nondischargeable Debts in Subchapter V Chapter 11 Case

The Small Business Restructuring Act of 2019, Pub. L. 116-54, 133 Stat. 1079 (Aug. 23, 2019) (“SBRA”) became effective February 19, 2020. SBRA, among other things, created a new Subchapter V under Chapter 11 of Title 11 of...more

Dechert LLP

Coal Act Premiums are Nondischargeable Taxes rather than Dischargeable Claims

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Dischargeable Claims - In a recent ruling, the District Court for the Middle District of Florida affirmed a bankruptcy court’s ruling that the premiums arising under the Coal Industry Retiree Health Benefit Act of 1992...more

Holland & Knight LLP

U.S. Court of Appeals Holds That Climate Change Tort Claims are Dischargeable in Bankruptcy

Holland & Knight LLP on

On May 6, 2020, in the case of In re Peabody Energy Corporation, 958 F.3d 717 (8th Cir.), the U.S. Court of Appeals for the Eighth Circuit held, in an apparent case of first impression, that state statutory and common-law...more

Spilman Thomas & Battle, PLLC

Top 10 Bankruptcy Truths for Creditors to Know

Much of the bankruptcy chatter arising from the pandemic world in which we find ourselves is now focusing on the cascade of new bankruptcy cases that are predicted to arrive soon. We have already seen the effects of closed...more

Dechert LLP

Fresh Air and Fresh Start: Are Environmental Regulatory Penalties Dischargeable?

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Two courts recently answered “yes,” finding that environmental claims brought against reorganized debtors by government entities were discharged under confirmed Chapter 11 plans of reorganization. In In re Exide Techs., 613...more

Skadden, Arps, Slate, Meagher & Flom LLP

Skadden's 2020 Insights

Despite political and economic uncertainties, markets and deal activity were resilient in 2019, and strong fundamentals remain in place heading into 2020. Companies continue to face a challenging litigation and enforcement...more

Fox Rothschild LLP

PACA Trust Not Trust Giving Rise To Non-Dischargeability Claim Under Section 523(a)(4)

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Perishable Agricultural Commodities Act (“PACA”) creates a trust to protect produce suppliers. In a recent S.D. of Florida Bankruptcy Case, the issue before the Court was whether a PACA trust is the type of trust that...more

Morris James LLP

Proceed with Caution: Although a False Oral Statement about a Single Asset Constitutes a Statement Respecting the Debtor's...

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The Supreme Court held that a statement about a single asset can be a "statement respecting the debtor's financial condition" and instructed that if the statement was not in writing, then the associated debt may be discharged...more

Jones Day

From the Top in Brief: U.S. Supreme Court Clarifies Whether Debts Based on False Statements Can Be Discharged in Bankruptcy

Jones Day on

On June 4, 2018, the U.S. Supreme Court ruled in Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, 138 S. Ct. 1752, 2018 WL 2465174 (U.S. June 4, 2018), that an individual debtor's false statement about a single asset, as...more

BCLP

Florida Proves Safe Haven for Individuals Liable for Breach of the PACA Trust (bonus: form complaint attached)

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For those of you who like to get something you can use from blog posts, attached here is a Form PACA Nondischargeability Complaint for a PACA seller against a party that controlled a PACA buyer, where such controlling party...more

McGuireWoods LLP

Statement By Debtor About Single Asset Can Be Statement Respecting Debtor’s Financial Condition Under Bankruptcy Code Section...

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Section 523(a)(2)(B) of the Bankruptcy Code provides that a discharge under the Bankruptcy Code does not discharge an individual debtor from any debt for money, property, services, or an extension, renewal, or refinancing of...more

Ward and Smith, P.A.

In Chapter 7, Oral Lies Are Safer Than Written Lies

Ward and Smith, P.A. on

In my last article, I discussed how the Fourth Circuit Court of Appeals affirmed the denial of a Chapter 7 debtor’s discharge because the debtor intentionally lowballed the value of his interest in a real estate investment...more

BakerHostetler

Supreme Court Holds That a Statement About a Single Asset Can Be a Statement Respecting a Debtor's Financial Condition

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The Supreme Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” for purposes of determining the application of the exception to discharge set forth in Section...more

BCLP

SCOTUS Reminds Us To Get It In Writing When Dealing with Someone that Owes You Money

BCLP on

The recent decision from the United States Supreme Court in Lamar, Archer & Cofrin, LLP v. Appling (“Lamar”), further restricts a creditor’s ability to pursue future recovery on its debt through a nondischargeability action...more

Patterson Belknap Webb & Tyler LLP

Supreme Court Resolves Circuit Split on the Dischargeability of Debts Obtained by Oral Misrepresentations

On June 4, the Supreme Court decided Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, in a unanimous opinion by Justice Sotomayor. The Court affirmed the Eleventh Circuit and resolved a circuit split about the meaning of...more

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