California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

Court reversed a trial court ruling under Article 3 of the UCC that exonerated a bank from liability for accepting for deposit to an employee's account a series of checks payable to his employer, but endorsed with an illegible scrawl that appeared to be the employee's initials. Read more
The FRBP, rather than the FRCP, govern a non-core case being adjudicated in US District Court under that court's "related to" bankruptcy jurisdiction. Read more
An inherited 401(k) account is not property of the estate and not subject to turnover by the debtor to a chapter 7 trustee. Read more
Letter from a debt collector extending an offer to settle a credit card debt in full that failed to inform the consumer about potential accruing interest and fees was not a violation of the FDCPA. Read more
Automatic stay in a bankruptcy proceeding did not prevent a judgment creditor from renewing a judgment while the case was pending, but Bankruptcy Rule 108(c) extended the time to renew until 30 days after the stay was terminated. Read more
In appropriate circumstances, reverse veil piercing is an available remedy for a judgment creditor who could not collect directly from the judgment debtor. Read more
Court dismissed chapter 7 trustee's constructive fraudulent conveyance claim against defendant electrical company and rejected trustee's theory that defendant failed to provide services to a property owned by a third party with whom debtor had contracted to manage a portfolio of properties that included the subject property. Read more
A legal fee award entered in a civil action that is litigated parallel to and intertwined with ongoing dissolution proceedings comes within the scope of 11 U.S.C. section 523(a)(15). Read more
Under Massachusetts law, a pharmacist correctly filling a prescription could not be held liable for damages suffered by a patient under a claim for breach of implied warranty under the UCC. Read more
In Kasolas v. Nicholson (In re Fox Ortega Enterprises, Inc.), -- B.R. --, 2021 WL 1605169 (Bankr. N.D. Cal. 2021), the bankruptcy court ruled on summary judgment that delivery of product by the debtor to its customer, who had previously ordered and paid for the product, constituted an avoidable fraudulent conveyance because (1) the delivery came after threats by the customer relating to the non-delivery of the product, and (2) the debtor’s principal, later, in a criminal proceeding, conceded that the operation of the business was, at least in part, a Ponzi scheme. Read more

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