For example, you make a commercial real estate loan and record your deed of trust. The borrower pays you for a time but then defaults. You tried loan forbearance and modification, but it was unsuccessful. The borrower falls...more
A hallmark of bankruptcy law is equal treatment of similarly-situated creditors. The Bankruptcy Code frowns upon a debtor who, while insolvent, pays some creditors but not others in the run-up to bankruptcy – whether...more
The 16th Century gave plenty to the world – Leonardo da Vinci's "Mona Lisa," the Scientific Revolution, the Protestant Reformation, Michaelangelo's "David," and the Statute of Elizabeth. That last one may be a...more
For a lender in bankruptcy, the best situation is to be an over-secured creditor, meaning the value of your collateral exceeds your debt. A creditor in this exalted category can recover principal, interest (including...more
On June 27, 2024, the United States Supreme Court decided the Purdue Pharma appeal.
In a five-to-four decision, the Supreme Court held that a bankruptcy court may not extend to non-debtors the benefits of a Chapter 11...more
7/9/2024
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Debtors ,
Non-Debtors ,
Opioid ,
Pharmaceutical Industry ,
Purdue Pharma ,
Third-Party Release Agrements
Subchapter V of Chapter 11 of the Bankruptcy Code, which took effect four years ago, creates a more streamlined and less expensive Chapter 11 reorganization path for small business debtors....more
For creditors, it can be difficult to navigate the financial difficulties of your customers. It seems like it would only get worse in bankruptcy, but that is not always the case. Subchapter V of Chapter 11 of the Bankruptcy...more
A recent decision from a bankruptcy court in Delaware provides a cautionary tale about the risks of involuntary bankruptcy. In the Delaware case, the debtor managed a group of investment funds. The business was all but...more
3/13/2024
/ Attorney's Fees ,
Automatic Stay ,
Bankruptcy Court ,
Chapter 7 ,
Commercial Bankruptcy ,
Damages ,
Debtors ,
Delaware ,
Involuntary Bankruptcy ,
Legal Costs ,
Willful Violations
February brings us Valentine's Day, and we bring you a tale as old as time. Two people meet, maybe online, maybe at a Chamber of Commerce mixer, maybe over lunch arranged by a broker. They hit it off and commit to a...more
Subchapter V of Chapter 11 of the Bankruptcy Code, which turned three earlier this year, created a more streamlined and less expensive Chapter 11 reorganization path for small business debtors. It also created a new position...more
The Bankruptcy Code generally allows a debtor to wipe out all pre-bankruptcy debts and get a fresh start in life.
But not all debts are equal. Some debts can't be discharged, meaning they survive bankruptcy, and the...more
What can you do to collect on a judgment, and when can you do it?
And does it matter if you're going after the judgment debtor directly, or after the property of the judgment debtor in the hands of a third party? In a...more
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
In a welcome feat of bipartisanship, Congress passed a bill to restore the Subchapter V debt limit to $7.5 million, and President Biden signed it into law on June 21. ...more
Subchapter V of Chapter 11 of the Bankruptcy Code, which took effect in February 2020, creates a more streamlined and less expensive Chapter 11 reorganization path for small business debtors. Under the law as originally...more
For creditors dealing with debtors in the shadow of bankruptcy, a common scenario repeats itself.
The creditor repossesses collateral, attaches an account, or sets off a bank account, and then the debtor files a...more
This is a story about contempt and clarity -
It comes to us from a July 2021 North Carolina district court decision reversing a $115,000 sanctions order by a North Carolina bankruptcy court. The story offers a lesson and...more
We previously informed you that if you are a small business that needed to file bankruptcy to save your company, then you may be able to take advantage of Subchapter V of Chapter 11 of the Bankruptcy Code.
The new...more
The Consolidated Appropriations Act of 2021 ("CAA") took effect on December 27, 2020.
The mammoth spending and COVID-19 pandemic relief bill contains provisions related to commercial real estate leases in bankruptcy. ...more
When a debtor files bankruptcy under Chapter 11, the bankruptcy court does not automatically appoint a trustee.
Unlike Chapter 7, where the court appoints a trustee to investigate the debtor's assets, liquidate assets, and...more
9/18/2020
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Debtors-in-Possession ,
Liquidation ,
Perjury ,
Reorganizations ,
Trustees
We have previously informed you that if you are a small business that needed to file bankruptcy to save your company, then you may be able to take advantage of Subchapter V of Chapter 11 of the Bankruptcy Code.
The new...more
We previously informed you that if you are a small business that needed to file bankruptcy to save your company, you may be able to take advantage of Subchapter V of Chapter 11 of the Bankruptcy Code.
Subchapter V was part...more
Under the Bankruptcy Code, filing a bankruptcy petition automatically halts efforts to collect pre-petition debts from the debtor outside of bankruptcy.
This is the "automatic stay," and it is a command, not a suggestion....more
1/21/2020
/ Appeals ,
Automatic Stay ,
Bankruptcy Court ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Dismissals ,
Federal Rules of Bankruptcy Procedure ,
Motion for Relief from Automatic Stay ,
Reaffirmation ,
Right To Appeal ,
Ritzen Group Inc v Jackson Masonry LLC ,
SCOTUS ,
Time-Barred Claims
If you lend money, you know – or should know – it is a cardinal sin to collect a debt or repossess collateral after a borrower files bankruptcy.
Bankruptcy triggers the automatic stay – a command, not a suggestion, that...more
12/13/2019
/ Actual Damages ,
Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 13 ,
Creditors ,
Debtors ,
Harley-Davidson ,
Lenders ,
Punitive Damages ,
Section 362 ,
Willful Violations
Bankruptcy court is not the first place that comes to mind when a lender thinks about full recovery on a loan.
Usually, debtors file bankruptcy because they can't pay all their creditors in the ordinary course of business....more