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 of...more
The CARES Act, which became law on March 27, 2020, imposes important restrictions on foreclosure activity by servicers of federally-backed mortgage loans.
It also grants expansive rights to borrowers to seek forbearance of...more
While much of the focus of the CARES Act has been on the Paycheck Protection Program, which allocates $349 billion for new SBA loans to cover qualified expenses, the Act contained a key provision related to existing SBA...more
With COVID-19 and the attempts to contain it causing cataclysmic business interruption, many small businesses may find themselves on the brink of insolvency.
While we hope that lenders, landlords, suppliers, and federal,...more
With COVID-19 shutting down whole swaths of the economy, the SBA has issued a notice to SBA 7(a) Lenders and 504 Certified Development Companies (CDCs), reminding them of their unilateral authority to provide borrowers with...more
In the last week, COVID-19 has upended the normal routines of daily life in America. While the health and safety of all Americans is the paramount concern, the economic impact is a reality that cannot be ignored....more
Filing a bankruptcy petition automatically halts efforts to collect pre-petition debts from the debtor outside of bankruptcy.
If a creditor wants to continue a lawsuit against a debtor outside of bankruptcy, repossess...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
When an SBA loan goes into default, the SBA requires a lender to commence litigation when the lender concludes that (1) defensive action is necessary to protect the collateral or ability to collect from the obligor or (2)...more
10/17/2019
/ Affirmative Defenses ,
Best Practices ,
Borrowers ,
Corporate Counsel ,
Counterclaims ,
Defense Strategies ,
Foreclosure ,
Litigation Fees & Costs ,
Litigation Strategies ,
SBA ,
SBA Lending Programs ,
Small Business ,
Small Business Loans
For several years, the United States Small Business Administration (SBA) has experienced continuous growth with its flagship 7(a) and 504 business loan programs. For fiscal year 2018, the SBA made over $24 billion in loans...more
9/26/2019
/ Arms Length Transactions ,
Best Practices ,
Deed of Trust ,
Deed-in-Lieu of Foreclosure ,
Federal Contractors ,
Foreclosure ,
Government Shutdown ,
Liquidation ,
Non-Judicial Foreclosures ,
Property Owners ,
SBA ,
Small Business ,
Small Business Loans ,
Standard Operating Procedures
On Friday, August 23, 2019, the President signed into law the Family Farmer Relief Act of 2019.
The Act increases the debt limit used to determine whether a family farmer is eligible for relief under Chapter 12 of the...more
8/26/2019
/ Agribusiness ,
Agricultural Sector ,
Bankruptcy Code ,
Bankruptcy Reform ,
Chapter 11 ,
Chapter 12 ,
Chapter 7 ,
Debtors ,
Farm & Fisherman Bankruptcies ,
Farms ,
New Legislation ,
Reorganizations ,
Trump Administration
Suppose you own farmland or retail commercial space and you lease your property.
What happens to your lease if the lessee files bankruptcy? And what must be done if your lessee wants to continue to honor your lease...more
8/5/2019
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Commercial Leases ,
Commercial Tenants ,
Eviction ,
Landlords ,
Motion for Relief from Automatic Stay ,
Property Surrender ,
Sale of Assets ,
Section 365 ,
Tenants
When your customer is in bankruptcy, there are two major no-nos that you must remember.
First, don't violate the automatic stay, which prevents a creditor from attempting to collect a debt while the debtor is in bankruptcy...more
6/27/2019
/ Appeals ,
Attorney's Fees ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code § 524(a) ,
Bankruptcy Discharge Order ,
Chapter 7 ,
Civil Contempt Orders ,
Concurrent Litigation ,
Creditors ,
Dischargeable Debts ,
Injunctive Relief ,
Money Judgment ,
Reasonable Belief Test ,
Remand ,
Reversal ,
SCOTUS ,
Standard of Review ,
Statutory Violations ,
Taggart v Lorenzen ,
Vacated
In a victory for Chapter 13 debtors, the United States Court of Appeals for the Fourth Circuit recently issued a major decision that changes the way bankruptcy courts in North Carolina will deal with certain home mortgages in...more
Bankruptcy is meant to provide a fresh start for the honest but unfortunate debtor.
A debtor who files Chapter 7 does so with the presumption that all his or her debts will be forgiven or "discharged." But what about the...more
5/20/2019
/ Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Burden of Proof ,
Chapter 7 ,
Consumer Bankruptcy ,
Debtors ,
Dischargeable Debts ,
Fiduciary Duty ,
Fraud ,
Negligent Misrepresentation
If a Clerk of Court authorizes a foreclosure sale and the trustee sells the property, can a borrower or other aggrieved party later sue to nullify the foreclosure sale or recover damages caused by the foreclosure?
In the...more
Since 2012, ten states and the District of Columbia have legalized marijuana for adult recreational use.
Another 23 states have legalized some form of medical marijuana use. At the federal level, the Agriculture...more
The United States Court of Appeals for the Fourth Circuit — which covers federal courts in North Carolina — recently handed a big victory to lenders whose borrowers file for bankruptcy protection.
In SummitBridge National...more
Recently, we discussed In re CHL, a case involving a real estate developer in Chapter 11.
We focused on the importance of the Disclosure Statement as a prerequisite to a debtor's ability to move forward with a plan of...more
What is virtual currency?
Is it money? Is it a commodity? Is it a hybrid of the two or something else entirely? The answer to the question has profound implications for lenders seeking to secure loans with virtual...more
In my last article, I discussed whether inconsistent dates on a promissory note and deed of trust could cause problems in foreclosure.
But what if you can't even find the original promissory note? Perhaps it was...more
Virtual currencies like Bitcoin and Ethereum have spawned many types of businesses that need banking services.
Many banks "de-risk" -- do not provide banking services -- to these businesses. Many virtual currency...more
9/28/2018
/ Anti-Money Laundering ,
Bank Secrecy Act ,
Bitcoin ,
Compliance ,
Enforcement ,
Enforcement Actions ,
Financial Institutions ,
FinCEN ,
Know Your Customers ,
Money Services Business ,
Money Transmitter ,
Office of Foreign Assets Control (OFAC) ,
Popular ,
SDN List ,
Virtual Currency
Consider this scenario: You loan money to a borrower.
You intend to secure the loan with a deed of trust encumbering real property. Your borrower signs a promissory note dated November 7, 2006. But your deed of trust is...more