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The Relationship between Declaring Bankruptcy and Piercing the Corporate Veil

By: Lauren Gross

St. John’s Law Student

American Bankruptcy Institute Law Review Staff

In Music Mix Mobile, LLC v. Newman (In re Stage Presence, Inc.), the United States Bankruptcy Court for the Southern District of New York held that the plaintiffs’ alter ego allegations were sufficient to withstand a defendant’s motion to dismiss. Plaintiffs, Music Mix Mobile, LLC, et al., alleged they were not paid by Stage Presence Incorporated (a chapter 11 debtor), One for Each Island Ltd. (“OFEI”) and three individual producers of the benefit program: Newman, Weiner, and Marquette for audio, editing, teleprompter, music mixing and other services they provided in connection with the Childhelp program. Among other theories of contract liability against defendants, the plaintiffs asserted that OFEI, Newman, Weiner, and Marquette should jointly share in the contract liabilities of Stage Presence on “alter ego” grounds.

Debt Collection ‘versus’ Consumer Protection: The FDCPA’s Prohibition on False Representations of the Legal Status of Debt

By: Sara Brenner

St. John’s Law Student

American Bankruptcy Institute Law Review Staff

In In re Murray, chapter 13 debtor Mr. Murray (the “Debtor”), sued Revenue Management Corporation and Donald Aucoin (“Defendants”), alleging that the Defendants violated the Fair Debt Collection Practices Act (“FDCPA”). According to the Debtor, the Defendants violated the FDCPA by including a reference to purported litigation as reflected by inserting a “vs” between the Defendants’ names and the Debtor in the top right corner of a collection letter.

Delaware Bankruptcy Court Creates Vendor-Friendly Forum by Preserving Reclamation Rights in the Face of DIP Lenders’ Liens

By: Dean Katsionis

St. John’s Law Student

American Bankruptcy Institute Law Review Staff

Section 546(c) of the Bankruptcy Code preserves a vendor’s right to reclaim goods sold to an insolvent debtor within forty-five days of the debtor’s bankruptcy filing.[1] Courts have had to address whether a post-petition lender’s subsequently perfected security interest defeats the vendor’s reclamation rights when a post-petition loan is used to repay the debtor’s prepetition secured loan, which are generally subject to reclamation rights.[2] In In re Reichold Holdings US, Inc., the United States Bankruptcy Court for the District of Delaware overruled a liquidating trustee’s objection to a vendor’s reclamation claim, holding that the vendor’s reclamation rights arose before a post-petition DIP lender’s liens attached, and as such, those liens were subject to the prior reclamation rights of the vendor.[3]

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