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Facets on a gem bend light and change how we see things. The same thing happens when bankruptcy law encounters a small business owner and the business itself. Seen from one angle of the law, the business is a valuable asset. Seen from another, it is nothing more than a job for the owner, having no real value without the owner. It depends on where you stand and where the light hits. Is incorporating dangerous? The question comes up when individuals have a small business that provides a living, but the owners have accumulated crushing debt. I wrote earlier about how incorporation could create a separate legal entity that could continue to operate during the bankruptcy of its shareholders. My good friend Doug Jacobs pointed out that under some circumstances, incorporation could be seen as a fraudulent transfer. A fraudulent transfer is one where the entity conveying property either intends to put it beyond the reach of his creditors, or, receives less than the asset was worth in exchange, leaving the transferor less able to pay his debts.
9 hours 44 min ago
The Cathedral of St. Paul in St. Paul, Minn.
Associated Press
Lawyers representing more than 400 clergy sexual-abuse victims will head to court this week to fight a request from the Roman Catholic Archdiocese of St. Paul and Minneapolis’s parishes for permission to review victims’ confidential bankruptcy claims. Victims’ lawyers said that if the parishes’ request is approved by a judge, it could result in the dissemination of “unusually detailed and intensely personal” information to more than 1,000 additional recipients. “Many of the additional permitted parties will reside in smaller parishes outside of the metropolitan area where confidential information is more likely to be linked to specific claimants,” Robert Kugler, a lawyer for the committee representing abuse victims, said in court papers. Lawyers for the parishes, however, say the information included in the claims is crucial to efforts to broker a settlement with victims.

Read More from: WSJ.com: Bankruptcy Beat

9 hours 55 min ago
Authored by Mark S. Mitchell and Timothy D. Hedrickand Mark S. Mitchell and Timothy D. Hedrick of Rogers TowersThrough the economic turmoil of the late 2000s, borrowers came up with creative (and at times, inequitable) ways to protect their investments. One such method—the borrower’s indirectly purchasing and foreclosing a senior lien to rid the investment of junior liens—was recently rejected by Florida’s Third District Court of Appeal. In CDC Builders v. Biltmore-Sevilla Debt Investors, LLC, 151 So. 3d 479 (Fla. 3d DCA 2014), a real estate investor, McBride, owned a large development through a group of companies he formed and controlled. The development was financed through a mortgage with SunTrust, and McBride’s companies hired a contractor to construct homes on the development. When McBride’s companies could not pay the contractor for the last eight homes constructed, the contractor recorded statutory construction liens against the development.

Read More from: Florida Banking Law Blog

10 hours 42 min ago
Getty Images
Junior creditors of the former RadioShack are suing hedge fund Standard General LP to try to get repaid, Daily Bankruptcy Review reports via The Wall Street Journal. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Ex-Apple Inc. sapphire supplier GT Advanced Technologies Inc. is cutting 40% of its workforce, DBR reports in WSJ. Patriot Coal Corp. won approval to auction its remaining assets this month, DBR reports.

Read More from: WSJ.com: Bankruptcy Beat

11 hours 57 min ago
One of the functions of the UK Insolvency Service is to investigate directors’ conduct and if appropriate to commence directors disqualification proceedings or enter into disqualification undertakings. As the Insolvency Service has recently reviewed in its Newsletter the type of conduct which led to the longest disqualification bans in 2014/2015, now would seem like a perfect opportunity to reflect on the lessons learned from the biggest offenders. The Insolvency Service’s latest quarterly statistics on enforcement outcomes for April to June 2015 also reveal that:
  1. 309 directors were disqualified in that period;
  2. the average length of disqualification was 6 years;
  3. the number of directors who were disqualified for between 10 and 15 years increased from 12% in the same quarter last year to 16% this year;
  4. the most common form of allegation was unfair treatment of HMRC compared to other creditors.
             

Read More from: eSQUIRE Global Crossings

14 hours 55 min ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for August 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 39 years of newly imposed sentences for people involved in Ponzi schemes; at least 3 new Ponzi schemes involving over $143 million; and an average age of approximately 59 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.    Bryan Anderson, 41, was sentenced to 7 years and 3 months in prison in connection with a Ponzi scheme to which he had previously pleaded guilty. Anderson defrauded a dozen investors out of more than $3 million. During most of the scheme, Anderson was a registered financial broker working with MetLife Securities and then Pruco Securities.    Roland Barrera, a bar owner, was ordered to pay a $150,000 penalty for breaking federal regulations when he helped persuade a businessman to invest $3 million in a Ponzi scheme run by Robert Helms and Janniece Kaelin through their company, Vendetta Royalty Partners, Ltd., claiming to have royalties on 2,000 oil and gas wells. The scheme involved as many as 129 investors who invested at least $18 million.

Read More from: The Ponzi Blog

19 hours 29 min ago
“Render unto Caesar the things that are Caesar’s, and unto [CEC] the things that are [CEC’s] [?]” – Matthew 22:21 (as revised) Last week, Judge Shira Scheindlin issued a much-awaited decision in the pending litigation over the so-called “parent guarantee” in connection with the Caesars bankruptcy case.  We discuss the decision in a two-part series beginning today.  But before we go any further, the short, short version:
  • The Trust Indenture Act (TIA) prohibits certain nonconsensual impairment of certain noteholders rights.
  • Courts are divided regarding what kind of impairment violates the TIA.
  • Judge Scheindlin (S.D.N.Y.) held that the applicable provision of the TIA bars impairment of the right to payment, as well as the right to bring suit, but only with respect to nonconsensual (i) amendments to core terms of a debt instrument or (ii) out of court debt reorganizations.
  • Judge Scheindlin further held that any alleged impairment must be evaluated as of the date that a payment becomes due, rather than the date of the transaction ultimately giving rise to the alleged impairment.
  • Judge Scheindlin certified questions regarding the interpretation of the TIA to the Second Circuit.
1 day 2 hours ago
This ruling, handed down today by the Second Circuit, may spell the end of one phase of the NML litigation. For some time, the plaintiffs have been trying to find a way to seize assets held by Argentina's central bank. Their latest effort sought an order declaring that Banco Central is an alter ego of Argentina, at least insofar as U.S. law is concerned. The effect of such an order would be to eliminate the bank's claim to be treated as a separate legal entity, making it liable for the government's debts. I understand that Banco Central has already moved most if not all of its assets out of the U.S., and earlier Second Circuit rulings already protect funds held at the Federal Reserve Bank of New York. But the plaintiffs could have taken the order to another country where Banco Central has assets and (conceivably) parlayed it into an order allowing them to attach bank funds. 

Read More from: Credit Slips

1 day 2 hours ago
By: Steven P. Taylor Law Office of Steven P. Taylor, P.C. August 31, 2015 Commonly, in consumer bankruptcy cases, Debtors have attempt resolve their financial issues by raiding their retirement accounts. For those debtors that are younger than 59 ½ years of age, this leads to the 10% additional tax (an “exaction”) of the withdrawn amount as part of their current tax bill in addition to the normal income tax. Bankruptcy may be an appropriate method to deal with tax debt and other times it’s not-and something like the Offer in Compromise program may be a much better option than bankruptcy tax relief. In the bankruptcy world, whether the Internal Revenue Service has assessed a “tax” or “tax penalty” has different implications. The priority scheme treats income taxes and tax penalty claims differently. Income taxes that a debtor owes to the government are entitled to eighth priority distribution under § 507 of the Bankruptcy Code which are not dischargeable. In contrast, tax penalties that do not compensate for the government’s actual pecuniary loss are subordinated to general unsecured claims and are dischargeable.
1 day 3 hours ago
Divorce causes stress and amplified emotions for all family members. Once you realize you must also reconcile marital debt, you can double the stress for you and your spouse. Filing a Kenosha bankruptcy before divorcing, preferably jointly, can be a great solution to marital debt problems. We’ve put together a list of seven reasons why filing a Kenosha bankruptcy before divorcing may be the perfect option for you and your spouse. 1. Filing bankruptcy jointly before a divorce to save money. When you file a joint Kenosha bankruptcy, debts can be cleared under one bankruptcy case, thus saving a lot of money on court and attorney fees. If you qualify for a Chapter 7 Kenosha bankruptcy, you both can eliminate unwanted debts, such as your credit card and medical debt. A bankruptcy may also decrease your divorce costs as well; you will avoid arguing over debt and simplify your divorce filing.

Read More from: Wynn at Law, LLC

1 day 4 hours ago
On August 4, 2015, we posted: “Equitable Mootness In The Third Circuit: Dead Or Alive?”, which analyzed the Third Circuit’s opinion in In re One2One Communications.   The post predicted that Judge Krause’s concurrence would likely result in further opinions on equitable mootness.  Less than a month later we have such an opinion.  In Aurelius v. Tribune, 14-3332 (3d Cir. August 19, 2015) (the “Tribune Opinion”), a different panel of the Third Circuit addresses equitable mootness, and in a concurring opinion replies to Judge Krause’s concurrence. Background In December 2007, the Tribune Company (which published the Chicago Tribune) became the subject of a leveraged buy-out (“LBO”).  The LBO failed, Chapter 11 followed, and a creditor committee promptly filed suit on account of “LBO-Related causes of action”.

Read More from: eSQUIRE Global Crossings

1 day 5 hours ago
Duck Commander Family Foods and Chinook USA
A Kentucky beverage maker is protesting a $250,000 bill that “Duck Dynasty” stars charged for appearance fees, arguing that Si Robertson (aka “Uncle Si”) was a no-show when it came to promoting an ice tea drink named after him. In recently filed court papers, lawyers for the bankrupt maker of Uncle Si’s Iced Tea asked a federal judge to cancel the bill from Duck Commander Inc., the Robertson clan’s duck-call business in Louisiana that’s profiled in the hit A&E reality TV show. The beverage maker, Chinook USA LLC, has argued in an lawsuit that the Robertson family broke a contract that called for them to promote Chinook’s ice tea drink inspired by Uncle Si, who drinks from a bottomless cup of ice tea on the show. As a result, sales haven’t been great for the beverage, which was unveiled last year at a Nascar race near Dallas. That contract violation should enable Chinook to avoid paying the appearance bill, along with a $500,000 request for royalties, according to documents filed in U.S. Bankruptcy Court in Louisville, Ky. Under the five-year contract, the beverage maker agreed to pay a minimum of $1 million to the Robertsons’ business every year.

Read More from: WSJ.com: Bankruptcy Beat

1 day 6 hours ago
Boomerang Systems, Inc. Et Al. Boomerang Systems, Inc. (BMER, OTCBB), a developer of automated parking systems, and three of its affiliates have filed chapter 11 petitions in Delaware. (Note: This filing does not appear to be related to Boomerang Tube). The docket and other information about the case is available through Garden City Group at http://www.gardencitygroup.com/cases-info/BMR/ The petition and first day declaration are attached here.
1 day 6 hours ago
By Stephen W. SatherBarron & Newburger, P.C.

Read More from: CLLA Bankruptcy Blog

1 day 7 hours ago
Debt comes with a silent partner – stress. Unless you’re careful, that stress can build to life threatening levels. We’re told from an early age that we need to get out into the world and make something of ourselves. The subtext is, “go out and make a lot of money so you can buy a big house and a nice car!” The message is reinforced by commercial messages encouraging us to buy a home, get a new car, and go on fancy vacations. As if that weren’t enough, our celebrity-obsessed culture encourages us to model our lives on Kim and Kanye, Beyonce and Jay Z, and the rest of the mega-wealthy jetsetters that flood our Facebook streams. But for most of us, the only way to pay for the car, the home and the vacation is to take on debt. This, on top of the debt we take on to go to college. That debt creates stress, which breaks us down physically and mentally. We don’t sleep as restfully. We eat too much or not enough. Our relationships suffer. We’re at a higher risk of major health issues, including death. The Debt-Stress Connection
1 day 7 hours ago
ItÂ's time for the mortgage industry to take a lesson from the presidential hopefuls who have gained an upper hand by playing up their individual brands.

Read More from: BankThink

1 day 8 hours ago
  Divorce usually requires the division of the debts of the marriage along with the assets. The legalese usually requires each party to indemnify and hold harmless the other from the debts assigned to that party. Most folks skim over that provision to worry about the division of assets or support issues or the termination of their status as married people. Indemnification is worth another look. Long after the personal property that was divided has worn out and the need for support has passed, the right to indemnification may live on. Given the length of some statutes of limitation and an industry selling and collecting on time barred debt, the obligation to indemnify your ex may live longer than the marriage. So, what’s indemnification all about? Indemnification creates a new debt First, let’s define indemnify.  It means to make someone whole should they suffer a particular kind of loss. In the case of a divorce, a right to indemnity would require one spouse to pay all the damages inflicted on the other by reason of a debt assigned to the other spouse.
1 day 9 hours ago
Receiving Wide Coverage ... Interest Rate Outlook: The Wall Street Journal suggests the Fed is likely to stick to the plan to raise rates before the end of the year, based on discussions at the Federal Reserve Bank of Kansas City's annual policy retreat in Jackson Hole, Wyo. Market volatility and economic troubles in China aside, the paper says, a majority of Fed officials think the U.S. is largely on track for a quarter-percentage point increase. Â...

Read More from: BankThink

1 day 9 hours ago
Construction of the Baha Mar resort on the beach in the Bahamas. Baha Mar’s bankruptcy judge likely will rule on a bankruptcy case dismissal next month. 
Baha Mar
Baha Mar Ltd.’s bankruptcy judge outlined two different middle grounds on dismissal of the resorts project’s bankruptcy, Daily Bankruptcy Review reports via The Wall Street Journal. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) According to WSJ, Puerto Rico’s governor extended a draft restructuring plan deadline. A judge awarded Thornburg Mortgage Inc.’s liquidating trustee $45 million in a lawsuit against the Royal Bank of Canada, DBR reports via WSJ.

Read More from: WSJ.com: Bankruptcy Beat

1 day 11 hours ago
On August 26, 2015, Santa Fe Gold Corporation and three of its subsidiaries, filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Court”).  The case no. is 15-11761 and is pending before the Honorable Mary F. Walrath. The Debtors are continuing in possession of their properties and are managing their businesses, as debtors in possession, in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Santa Fe Gold is a U.S.-based mining and exploration enterprise.  Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; and (iii) a deposit of micaceous iron oxide (MIO) in Western Arizona. According to their petition, the Debtors have approximately $19 million in total assets, and $29.8 million in total debts. Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.
1 day 12 hours ago

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