Help Center

ABI Blog Exchange

The Chapter 13 trustee objected to the debtors’ repayment plan because they did not plan to devote their Social Security income to repaying creditors.   And, he complained, they proposed to keep and pay for vehicles that are luxury items. The plan is not proposed in good faith, he claimed, as required by the Bankruptcy Code. The trustee fought for inclusion of the debtors’ Social Security payments through three different courtrooms.  Yesterday, the  9th Circuit Court of Appeals decided in the debtors’ favor.
The good faith test for confirmation is not a back door around the statutory calculation of disposable income to be paid to creditors nor does it entitle courts to second guess which pre bankruptcy secured creditors the debtor pays through his plan.
Chapter 13 plans that meet the statutory tests for confirmation cannot be rejected under the catch all provision that they lack “good faith”.  Drummond v. Welsh. Good faith doesn’t require SS
2 weeks 6 days ago
When a Chapter 13 trustee complains that the means test is not easy to administer when only one spouse files, should I be sympathetic? After all, Chapter 13 confirmation is often a negotiation on disputed issues between the trustee and debtor’s counsel. Here’s what I said recently at ConsiderChapter13.org on that issue.
Come on, Madame Trustee, get over it. What is there about BAPCPA that leads you to expect that it or its misbegotten spawn of a means test treats debtors fairly or equally? And where does the Chapter 13 trustee have a mandate to challenge the filing of a case by a debtor whose spouse will not or cannot join in the filing? The Bankruptcy Code clearly permits a married person to file without their spouse. I see no basis to deny relief to one spouse or to hedge that relief because their spouse does not file. The single spouse filing has become more attractive for debtor’s counsel in a world of longer periods between bankruptcy filings and Chapter 13 debt limits that disqualify homeowners in sections of the country that once had a hot real estate market. I will join in the chorus of boos about how the means test is obscure. In so many ways, it simply does not fit neatly with a myriad of real world configurations.
3 weeks 6 hours ago
In re Restaurants Acquisition I, LLC, Case No. 15-12406 (KG), 2016 WL 855089 (Bankr. D. Del. Mar. 4, 2016) In this Memorandum Opinion, Judge Gross denied a motion to transfer venue to the Bankruptcy Court for the Northern District of Texas brought by the Texas Comptroller of Public Accounts and the Texas Workforce Commission (the “Movants”).  The Court recognized the strong interest in resolving state tax disputes in a local forum, but explained that the analysis must be viewed from the lens of all interested parties, with the primary focus concerning the economic administration of the estate and the impact on a debtor’s efforts to reorganize if transferred. Read More › Tags: Jurisdiction & Venue, Venue

Read More from: Delaware Bankruptcy Insider

3 weeks 8 hours ago
Paul Krugman claims that "Many analysts concluded years ago" that the big banks were not at the heart of the financial crisis and that breaking them up would not protect us from future crises.  Incredibly, his claim is linked to an article by ... Paul Krugman.  Maybe a Nobel Prize comes with a license to cite oneself as Gospel authority, but I don't believe that Krugman's Nobel Prize was for his expertise on bank regulation.  So what's wrong with Krugman's claim?  Let's go piece by piece.  Claim 1.  "Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial."

Read More from: Credit Slips

3 weeks 9 hours ago
The recent decision from the United States District Court for the Eastern District of Michigan, ECP Commercial II LLC v. Town Center Flats, LLC (In re Town Center Flats, LLC), gives us at the Weil Bankruptcy Blog a reason to revisit the issue of “absolute” assignments of rent.  As we have reported before, in our posts Actions Speak Louder Than Words: Assignments of Rent and Property of the Estate, and Another Look at “Absolute” Assignments of Rent Under New York Law, determining the exact interests a debtor or creditor may have in rents can be contentious.  These rents are often particularly important in single asset real estate cases—either protecting lenders against further losses from a defaulting borrower, or helping carry a debtor through a much needed reorganization.
3 weeks 22 hours ago
By Stephen W. SatherBarron & Newburger, P.C.Austin, TXA U.S. District Judge in Arizona  has ruled that the “community discharge” in bankruptcy does not grant an in personamdischarge to a non-filing spouse, thus thwarting the FDCPA claim of a pro se litigant.   The case is important because it shines light on the parameters of a poorly understand aspect of bankruptcy law.   The case is Parker v. First Step Group of Minnesota, LLC, 2016 U.S. Dist. LEXIS 5372 (D. Ariz. 2016).What HappenedJohn Parker was married to Regina Parker.   Regina filed chapter 7 and received a discharge.   John did not file.   Later the couple divorced.    On February 4, 2015, First Step Group of Minnesota, LLC, a debt collector, sent a demand letter relating to a debt in the amount of approximately $3,500.   John responded by filing a pro se action contending that the debt had been discharged in his ex-wife’s bankruptcy and that the community discharge protected him.   Because he claimed that the debt had been discharged, he filed a suit under the Fair Debt Collection Practices Act.The Defendants answered and file a motion for judgment on the pleadings under Fed.R.Civ.P.

Read More from: CLLA Bankruptcy Blog

3 weeks 1 day ago
This week the Seventh Circuit Court of Appeals ruled that claims under Section 1692g of the FDCPA can survive summary judgment, even without extrinsic proof the plaintiffs were confused by a creditor’s correspondence.  In Janetos v. Fulton Friedman & Gullace, Case No. 15-1859, 2016 U.S. App. LEXIS 6361 (7th Cir. Apr. 7, 2016), the Plaintiffs brought suit alleging a law firm/debt collector had violated the FDCPA by failing to disclose the identity of the current creditor and by failing to disclose that the current creditor could be vicariously liable for the law firm’s actions. The district court granted the law firm’s motion for summary judgment, recognizing the letters at issue were ambiguous as to the identity of the current creditor but ruling that the Plaintiffs needed to present extrinsic evidence of confusion to survive summary judgment.

Read More from: Creditors' Sidebar

3 weeks 1 day ago
[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NE710_JUMIOj_P_201603211820..." J="http://si.wsj.net/public/resources/images/BN-NE710_JUMIOj_J_201603211820..." M="http://si.wsj.net/public/resources/images/BN-NE710_JUMIOj_M_201603211820..." caption="Facebook co-founder Eduardo Saverin speaks during a Wall Street Journal event in Singapore in 2013. Under a plan for an auction, identity-verification company Jumio Inc.  will put Mr. Saverin first in line to take over." credit="Roslan Rahman/AFP/Getty Images" placement="Inline" suppressEnlarge="false" ] Tuesday in Wilmington, Del., Jumio Inc. will ask U.S. Bankruptcy Court Judge Brendan Shannon to approve an auction process that puts Facebook co-founder Eduardo Saverin first in line to take over the business. Jumio helps companies quickly verify drivers’ licenses, passports and other credentials in online and mobile transactions, and Mr. Saverin was one of its earliest backers. He is a major shareholder, served on the company’s board and is also its largest creditors, owed about $15.7 million, according to court papers.

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 1 day ago
Federal rules for technology-based firms providing the fast-moving sector certainty and consistency would be a benefit, even if rules are suboptimal.

Read More from: BankThink

3 weeks 1 day ago
The question of what constitutes a tax “return” for purposes of 11 U.S.C. §523(a)(1) has been the subject of conflicting Circuit Court cases the last several years.   The Eleventh Circuit Court of Appeals addressed the issue in In re Justice, No. 15-10273, 2016 WL 1237766 (11th Cir. March 30, 2016) (click for .pdf of opinion).  The Debtor sought to discharge taxes for tax years 2000-2003, but had filed the returns for those years several years late and only after the IRS had issued notices of deficiency and assessments.  The Bankruptcy Court held that the taxes were non-dischargeable and the District Court affirmed. Section 523(a)(1) excepts from discharge any debt:

Read More from: Georgia Bankruptcy Blog

3 weeks 1 day ago
Chesapeake Energy is like a real life DallasYou know, the late 1970’s TV show that introduced America to televised family drama between the battling Ewing brothers.  Chesapeake Energy may not have two brothers at each other’s throats but it has seen its share of drama in recent years as a power struggle between cofounder, Aubrey McClendon, and activist investor, Carl Icahn, resulted in McClendon’s ouster.  On March 2, 2016, Aubrey McClendon is believed to have taken his own life by driving his truck into a wall at high speed after being indicted for bid rigging.

Read More from: Bonds & Botes, P.C.

3 weeks 1 day ago
Banks should prepare for renewed scrutiny of their anti-money-laundering efforts in the wake of the headline-grabbing leak of the Panama Papers.

Read More from: BankThink

3 weeks 1 day ago
Restructuring partners Mark Salzberg and Karol Denniston, together with financial services partner, Michael Cuda, recently authored a chapter in “Inside The Minds: Chapter 11 Bankruptcy and Restructuring Strategies – Leading Lawyers on Navigating Recent Trends, Cases and Strategies Affecting Chapter 11 Clients” published by Thomson Reuters/Aspatore. In their chapter, entitled “New Developments in Chapter 11 and Chapter 9 Filings,” Mark, Karol and Michael analyze, among other topics:
  • Key judicial decisions rendered in 2015
  • Energy trends in 2015 and the expected increases in workouts and bankruptcy filings in the oil and gas markets
  • Trends in municipal bankruptcies, including the expected fallout from the Detroit Chapter 9 bankruptcy
The chapter will be a helpful resource to restructuring professionals.

Read More from: eSQUIRE Global Crossings

3 weeks 1 day ago
[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NI794_CLIMFI_P_201603311728..." J="http://si.wsj.net/public/resources/images/BN-NI794_CLIMFI_J_201603311728..." M="http://si.wsj.net/public/resources/images/BN-NI794_CLIMFI_M_201603311728..."" credit="Jim Richardson/Corbis" placement="Inline" suppressEnlarge="false" ] Chinese coal company Winsway Enterprises Ltd. is seeking chapter 15 protection in the U.S. as it looks to restructure more than $349 million in debt. The Wall Street Journal has the Daily Bankruptcy Review article here. (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.”)

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 1 day ago
By Donald L. Swanson Pickle Jar Reuters reports that, Caesars Entertainment signs a “non-disclosure agreement” with various parties “as part of mediation process.” Here’s saying that the parties to any such “non-disclosure agreement” are in a bit of a pickle. Here’s why. The Bankruptcy Court in Chicago recently deleted its Local Rules on mediation. So, the question is this: To what extent is a “non-disclosure agreement” in support of a mediation-without-court-authorization enforceable in Chicago’s Bankruptcy Court against others who don’t sign it? Presumably, someone has this figured out. But, typically, legal authority for mediation arises from statutes or court rules that provide, explicitly, for confidentiality of information shared in mediation–and for non-discoverability of such information from a mediator. But now, operating without such rules in Chicago, how can anyone be certain of confidentiality? Ok. Ok. The focus of my entire blog is this: “Promoting Bankruptcy Mediation.” So everyone should realize that I’m not much-impressed with what the Chicago Bankruptcy Court is doing on mediation. But it’s not just me. Here is mandatory language from a United States Statute (28 U.S.C. Sec. 651) on providing local mediation rules:
“Definition.— . . . [A]n alternative dispute resolution process includes . . . mediation . . . (b)Authority.—

Read More from: Mediatbankry

3 weeks 1 day ago
[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NA045_50inco_P_201603100839..." J="http://si.wsj.net/public/resources/images/BN-NA045_50inco_J_201603100839..." M="http://si.wsj.net/public/resources/images/BN-NA045_50inco_M_201603100839..." caption="Curtis "50 Cent" Jackson arrives at court for a bankruptcy hearing March 9 in Hartford, Conn." credit="Jessica Hill/Associated Press" placement="Inline" suppressEnlarge="false" ] Rapper 50 Cent got slapped on the wrist from his bankruptcy judge for bringing his phone into the courthouse, where it appeared he had taken a photo of himself with stacks of fake cash tucked into his belt and posted it to Instagram last month. At the end of Wednesday’s court hearing, Judge Ann Nevins reminded the 40-year-old entertainer that cellphones aren’t allowed in the courtroom and hinted at irritation that he isn’t taking the legal process seriously. “There’s nothing funny going on here. This is very serious stuff,” Judge Nevins said. “I’m not trying to tell anybody what they can or cannot say or how they can exercise their right to free speech, but I would appreciate if we could keep things that are very serious here appropriately viewed that way.”

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 2 days ago
How an undocumented immigrant rose through the ranks at Goldman Sachs; why one bank embraced a highly unusual strategy (and why you may want to copy it); and what Ally Bank's Diane Morais and Bank of America's Andrea Smith are up to now. Also, a pot (Hollywood) calls out a kettle (Wall Street) for a lack of women in leadership roles, and a high demand for airline pilots could make for more female-friendly skies.

Read More from: BankThink

3 weeks 2 days ago
Regulators and lawmakers must exercise healthy caution before granting fintech firms preemptive powers via national bank charters or otherwise.

Read More from: BankThink

3 weeks 2 days ago
Pacific Sunwear of California, Inc. (Nasdaq: PSUN) and two of its affiliates have commenced cases (Lead Case No. 16-10882 (LSS)) under Chapter 11 of the Bankruptcy Code before the U.S. Bankruptcy Court for the District of Delaware.  The Honorable Laurie Selber Silverstein will preside over these cases.  The debtors have filed a proposed disclosure statement and chapter 11 plan of reorganization and are seeking approval of debtor-in-possession financing.  The petitions (including consolidated list of top 40 creditors), first day declaration and dockets are available through Prime Clerk.  The debtors have published a press release regarding their reorganization.
3 weeks 2 days ago
When is a claim contingent?  When is a claim subject to a bona fide dispute and who has the burden of proof? When is a claim against a person? When is a claim too small to count?  When is an alleged debtor generally not paying his debts as they come due?  Are we there yet?  All but the last represents a sample of the exhaustive litany of questions recently addressed by the Bankruptcy Court for the Northern District of Florida in an analysis of whether an involuntary case was properly commenced under section 303 of the Bankruptcy Code.  In re Peter H. Bos, Jr. and Legendary Holding, Inc. Ultimately, though section 303 may have supported the involuntary petition, the court took a hard turn after 50 pages of the opinion and found that it should abstain and dismiss the involuntary proceedings under section 305 of the Bankruptcy Code. Background (a/k/a when sophisticated parties dig in their heels and refuse to settle)
3 weeks 2 days ago

Pages