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Read More from: BankThink

2 weeks 4 days ago
In the recent opinion issued by Judge Laurie Selber Silverstein of the Bankruptcy Court for the District of Delaware, In re Altegrity, et al., Case No. 15-10226 (LSS) (D. Del. Bankr. Ct. Jan. 15, 2016), the Court considered a motion filed by the Altegrity, et al. (“Altegrity” or “Debtors”) under Section 505 of the Bankruptcy Code to determine its tax liability owed to the State of Oklahoma for the fiscal year ending  Sept. 30, 2011, even though the Debtors have a tax protest proceeding pending before the Oklahoma Tax Commission. The Debtors are privately held information services companies that serve commercial and governmental entities. In denying Debtors’ motion, the Court noted that Debtors, in making this request, “ignore well-established law that a court – including this Court – should not rule on constitutional issues unless such adjudication is unavoidable.” After the filing of Debtors’ chapter 11 petitions, the Oklahoma Tax Commission filed a proof of claim against Debtor TOIC in the amount of $24,710,008 asserting a $1.7 million general unsecured claim, and a $23 million priority unsecured claim under 11 U.S.C. § 507(a)(8).
2 weeks 4 days ago
Arctic oil shipper Primorsk International Shipping Ltd. filed for chapter 11 protection with a deal with bondholders in hand. 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.”) DBR reports via WSJ on the bankruptcy of a Connecticut nursing-home chain that blamed having fewer patients and a dispute with Medicaid for its troubles. Puerto Rico is running out of money more quickly than in thought it would, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 4 days ago
Unless you have been living in a cave, you will have heard the very disappointing news that the current exemption to the Jackson reforms for insolvency claims under the Legal Aid, Sentencing and Punishment of Offenders Act (“LASPO”) will cease as of 1 April 2016. If you are to avail yourself of the benefits of the Jackson exemption, which was one of the few pieces of legislation that levelled out the playing field between Insolvency Practitioners (“IPs”) and rogue directors – then read on. All too often, by the time an IP is appointed over a company in liquidation or a bankrupt’s estate, the assets have been stripped, cash has been diverted and the only asset left in the insolvency estate are claims against the directors or related parties to refund the estate. In order to litigate the IP would inevitably have to obtain after the event insurance (“ATE”) to cover the risk of an adverse costs order being made against them, and enter into a conditional fee agreement (“CFA”) with their lawyers to ensure that the lawyers would only be entitled to be paid in the event that they made a recovery on behalf of the IP. Under the LASPO exemption, in the event that the IP obtained judgment against a third party, the third party would be liable for the ATE insurance premium, as well as the lawyers’ costs (including any uplift) payable under the CFA.

Read More from: eSQUIRE Global Crossings

2 weeks 4 days ago
(c) Creative Commons I will occasionally get a phone call from a family member of someone who is facing a lawsuit, repossession or foreclosure…that is scheduled for next week. Normally, I’d suggest that the potential client facing the lawsuit, repossession or foreclosure come in right away so the we can file an emergency bankruptcy petition to immediately stop the collection action thanks to the Automatic Stay. The problem? The potential client is not legally competent. This could mean that they’re a minor (I have filed a number of Chapter 13 bankruptcies for minors who are the sole owner of real estate, usually as the result of the death of a parent), that they suffer from Alzheimers, or are currently hospitalized and can’t deal with legal matters right now. Are these people out of luck? Must the lawsuit, repossession or foreclosure proceed without any protection from the Bankruptcy Court? No.

Read More from: Bankruptcy Law Network

2 weeks 4 days ago
On January 15, 2016, the Third Circuit Court of Appeals issued a precedential opinion (the “Opinion”) affirming the October 20, 2014 opinion of Judge Gross.  The Opinion is available here.  My blog post about Judge Gross’ opinion is available here: Trump Entertainment – A Debtor’s Rejection of a Bargaining Agreement.  Note, this was a direct appeal from the Bankruptcy Court to the Third Circuit. The Third Circuit, in affirming Judge Gross’ opinion, uses nearly identical reasoning.  It finds “the intent of Congress here also to be clear but that intent was to incorporate expired CBAs in the language of [Section] 1113.”  Opinion at *26.  “To hold that a debtor may reject an expired CBA or its continuing obligations as defined by the expired CBA is also consistent with the purpose of the Bankruptcy Code, which gives debtors latitude to restructure their affairs.”  Opinion at *27. The Appellate Court concludes by stating that “[I]n light of Chapter 11’s overarching purposes and the exigencies that the Debtors faced, we conclude that the Bankruptcy Court did not err in granting the Debtors’ motion.”  Opinion at *30.
2 weeks 5 days ago
In drafting a bankruptcy plan, causes of action often appear to be an overlooked step-child. Type A bankruptcy lawyers like us spend hours carefully drafting or dissecting the language on assets, liabilities, potential preferences, plan effective dates, and the like, while spending very little time fleshing out and providing for causes of action held by the estate. While the debtor is required to list causes of action on its schedules and § 1123(b)(3)(B) allows the plan to provide for the retention and enforcement of these causes of action, more often than not, the plan simply provides that the debtor will retain these causes of action, they are not pursued, and they simply die a natural death by means of a statute of limitation. Sometimes, however, a cause of action is litigated post-bankruptcy and an enterprising defense lawyer will assert that the bankruptcy plan is res judicata. When the judge agrees and dismisses the case with prejudice, the reorganized debtor looks to the bankruptcy lawyer and asks “did you screw up?” Not a good place to be. Res Judicata in the Bankruptcy Context With care, this potential pitfall can be avoided. But first, some discussion of the doctrine of res judicata is necessary to understand the issue.

Read More from: Plan Proponent

2 weeks 5 days ago
Failure to list assets may make you a liar, liar, pants on fire! What is an asset and better still, why do I need to tell anyone about it in bankruptcy?  Let’s start with the definition of an asset.  Merriam-Webster defines an asset as something owned by a person.  Merriam-Webster has provided a simple but most excellent way to describe the term “asset”. To determine if something is an asset, ask yourself, “Do I own it?”  If the answer is yes, you MUST list “it”.  Please allow me to illustrate.  A dog lives with you, do you list it?  If you feed the dog and care for the dog, you probably own the dog.  So list it.  If the dog is not an AKC registered dog or does not qualify as a show dog, then the value is $0.  I know, I know, the dog is part of the family and priceless, but no one else is going to pay a significant amount of money for the dog.  Therefore, the trustee will not want the dog, but you have complied with your duty to list the dog as an asset.

Read More from: Bankruptcy Law Network

2 weeks 5 days ago
Maryland criminal defense attorney, Jeffrey Scholnick explains the meaning of a stet docket as it applies to criminal law.   Stet is a legal concept that is commonly considered and widely used throughout criminal law. When a case is placed on the stet docket, it means that the case is inactive for a period of time and technically closed in the court system, but neither a guilty or not guilty verdict was declared. Cases are typically put on the stet docket so that a defendant can complete any agreed upon conditions such as community service, counseling courses, anger management classes or payment of restitution. “Stet” is a Latin term that means “let it stand” as in “not moving” or “remaining inactive.” When a defendant and his or her legal team agree to the terms of the stet, it is important to understand that the defendant is also giving up his or her right to a speedy trial. According to the United States Constitution and Maryland law, every person charged with a crime has the right to a speedy trial. Since the stet docket means the case is being deemed inactive, a trial may occur at a much later date or it may never occur at all, depending on the case’s specific circumstances.

Read More from: Scholnick Law

2 weeks 5 days ago
When dealing with security clearances, most people are aware that there are secret clearances and top-secret clearances which allow access to classified material.  Most importantly, secret and top-secret clearances are the required prerequisites in order to get a government, military or a government subcontractor position.  There is, however, a lesser known security clearance requirement for many positions in the government.  These types of positions require a “lesser,” but still important access called “CAC cards” or Common Access Cards. Acquiring a Common Access Card The process to get a CAC card is similar to what people have to go through to obtain a secret or top-secret (TS) security clearance.  For a secret or TS clearance, an individual has to submit a completed Standard Form (SF) 86 through the Electronic Questionnaires for Investigations Processing system (e-QIP).  In order to obtain a CAC card, an individual needs to submit a shorter form under the e-QIP system called a SF 85.  SF 85 forms are probably more common than SF 86 forms as there are generally more jobs throughout the country that require a lesser form of scrutiny as far as getting access to government places and information.

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

2 weeks 5 days ago
Students have taken on more than $1 trillion in debt to pay for the relentlessly rising costs of higher education. With that much debt outstanding, it’s no surprise that there are increasing numbers of borrowers defaulting on student loan debt, and seeking to discharge that debt by filing for bankruptcy protection. But, as a Wisconsin man recently learned, discharging student loan debt in bankruptcy is no easy feat. Read More › Tags: Chapter 7, U.S. Supreme Court

Read More from: Michigan Bankruptcy Blog

2 weeks 5 days ago
When is there sufficient evidence to hold that a fiduciary’s debt to an ERISA benefit plan is non-dischargeable in bankruptcy?  The Bankruptcy Court for the Eastern District of New York recently held in In re Kern, Case No. 13-08096 (Dec. 10, 2015), that there was not sufficient evidence to support a non-dischargeability claim even though the fiduciary had used almost $1.4 million in company funds that otherwise were to be contributed to the ERISA plans.  The Kern case provides guidance not only to ERISA plans seeking to recover missed contributions, but also to creditors seeking to except their claims from the bankruptcy discharge. The debtor, Richard Kern, was the owner of Cool Sheetmetal, Inc. (“CSI”), a closely held corporation located in New York.  CSI was a union shop and had entered into collective bargaining agreements that required CSI to make various contributions to certain benefits funds (the “Funds”) with money from its general corporate funds.  The obligations were not funded through any specific employee withholdings or subject to any earmarking.

Read More from: eSQUIRE Global Crossings

2 weeks 5 days ago
Tax refunds are a primary vehicle for short term savings in many working class families.  The average tax refund is approximately $3000, a significant amount of money.  Bankruptcy can jeopardize the accumulation for one year or, in the case of a chapter 13 bankruptcy, can eliminate this fund from routine use for years.  How does this happen and why? Tax refunds are a peculiar asset.  Because tax rates for individuals can vary dramatically due to the complex set of inclusions and deductions created by congress in the tax code, it is often difficult to predict the exact amount of tax that will be due for each taxpayer.  Compound this by adding mid year changes in the tax code or changes in a taxpayer’s circumstances and it becomes an ever more inexact projection. Tax tables provided by the IRS can only estimate tax for a family using the standard deduction.

Read More from: Bankruptcy Law Network

2 weeks 6 days ago
A foreign company makes a foreign distribution to foreign shareholders shortly before merging with a U.S. company in a highly-leveraged LBO.  The resulting company files a chapter 11 petition in the United States Bankruptcy Court for the Southern District of New York 13 months later.  Can the foreign transfer be avoided as a fraudulent conveyance under section 548 of the Bankruptcy Code?  Previously, the answer was almost certainly not (at least in the Southern District of New York).  Now, after a decision in In re Lyondell Chemical Company, the answer is – it depends on which judge you ask.  Avoidance actions are among the primary protections of creditors.  Because it is not uncommon for foreign jurisdiction to have different avoidance laws (or similar laws with different substantive standards), this choice of law and jurisdictional issue can drive litigation outcomes and shift significant value between a debtor’s creditors and the transferees of the extraterritorial transfer.  So let’s take a closer look and see when U.S. law will be applied.  
3 weeks 22 hours ago
In a Tuesday, July 21, 2015, file photo, rapper Curtis Jackson, also known as 50 Cent, leaves court. Creditors of the rapper filed a repayment proposal this week.
Bebeto Matthews/Associated Press
Impatient for their money, the woman who won $7 million from rapper 50 Cent in a sex-tape dispute and partners in a failed headphone deal have teamed up to take his personal bankruptcy into their own hands. In court papers filed Thursday, the unpaid groups asked a bankruptcy judge to put a Connecticut lawyer named Richard M. Coan in charge of the 40-year-old entertainer’s business affairs, giving him the power to pay off the debts over the next five years. With the title of trustee, Mr. Coan would sell off property owned by 50 Cent, whose real name is Curtis James Jackson III, and oversee the entertainer’s recording contracts, endorsement deals and other pursuits, according to documents filed in U.S. Bankruptcy Court in Hartford, Conn. The 37-page repayment proposal didn’t say how much Lastonia Leviston, the woman behind the sex-tape dispute, or the headphone partners would ultimately collect from Mr. Jackson over the repayment period.

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 1 day ago
Baker Botts L.L.P. has filed its application for retention as debtors’ counsel in In re New Gulf Resources, LLC, et al. (Case No. 15-12556, Bankr. D. Del.), and the application incudes a novel “Fee Premium.” Essentially, Baker Botts’ aggregate fees incurred in the case will be increased by 10% (subject to court approval) but … Baker Botts will waive the entire Fee Premium “if, and only if, Baker Botts does not incur material fees and expenses defending against any objection with respect to an interim or final fee application.” The Fee Premium is a clear attempt to work around the Supreme Court’s ruling in Baker Botts L.L.P. v. ASARCO LLC, 135 S.Ct. 2158 (2015). In that case, ASARCO (represented by Bracewell & Giuliani LLP) argued, and the Supremes agreed, that bankruptcy courts cannot award fees to a law firm for the time its lawyers spent defending its fees in bankruptcy court. I know – No fees for arguing about fees? Oh the humanity! Click here for our blog entry on the Supreme Court decision.

Read More from: Basis Points

3 weeks 1 day ago
If you don’t pay your Walworth County real estate taxes, you will lose your home. That statement is straight to the point. Walworth County real estate taxes are due at the end of January. Is this the third year you have been unable pay? If so, you may lose your home due to unpaid property taxes.   What Happens When Walworth County Real Estate Taxes are Delinquent? Most homeowners set up an escrow account with their mortgage lender to pay their Walworth County real estate taxes. An “escrow account” means that in addition to their monthly mortgage payment, the homeowner pays additional funds each month to pay for real estate taxes. The escrow amount is rolled into the monthly mortgage amount. For instance, if your Walworth County real estate taxes are $2800 a year, you can divide that amount by 12 (for 12 months in a year) and that amount, which is $233, would be added into your monthly mortgage payment.

Read More from: Wynn at Law, LLC

3 weeks 1 day ago
Dov Charney is photographed at American Apparel 's factory in downtown Los Angeles on April 3, 2012.
Gary Friedman/Los Angeles Times/Getty Images
Wednesday, American Apparel Inc. will head to the Wilmington, Del., court to seek approval of its bankruptcy-exit plan, where it will face off with ousted Chief Executive Dov Charney. Mr. Charney is working with two investors, Hagan Capital Group and Silver Creek Capital Partners, who put forth a rival $300 million buyout offer for the company. The bid proposes an injection of $130 million, including $90 million of new equity and a new $40 million term loan. Friday, people familiar with the situation said American Apparel rejected the rival bid, though they said negotiations are still ongoing and any revisions to the offer could still be reviewed before Wednesday’s hearing. They added that Mr. Charney’s involvement is one reason for the bid’s rejection and that a revised bid would likely have to address that and would possibly need to provide more capital.

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 1 day ago
Ceres, an environmental nonprofit organization, released this week an SEC Sustainability Disclosure Search Tool. This tool, available here, is the next step in Ceres’s campaign for increased, and more transparent and comparable, climate change and other sustainability disclosure. (See prior blog posts on this topic available here, here, and here.
3 weeks 1 day ago
Drafting internal honor codes, and having employees pledge to follow them, could be a good first step to reversing negative opinions about banking.

Read More from: BankThink

3 weeks 1 day ago

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