Business Law Insolvency Law Committee

The California Court of Appeal recently vacated an arbitration award which had been affirmed by the trial court because the award, which enforced a Late Fee provision in commercial loan documents, constituted an unlawful penalty in contravention of the public policy set forth in California Civil Code § 1671 (§ 1671).  Read more

On August 8, 2022, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal of three actions brought under the Fair Credit Reporting Act (15 U.S.C. §§ 1681 through 1681x) (“FCRA”), adopting a “reasonable reader” standard and holding that delinquent “Pay Status” notations referring to closed accounts are historical information, not reflecting current delinquencies, which are accurate in light of other clarifying language in the credit reports. Read more

The Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) affirmed the bankruptcy court’s approval of a settlement between the chapter 7 trustee (the “Trustee”) of debtor Open Medicine Institute, Inc. Read more

In a case of first impression, the United States Court of Appeals for the Eleventh Circuit (the Circuit) recently ruled that the Bankruptcy Code’s exception to discharge in 11 U.S.C. § 523(a)(4) does not apply to debts incurred by a produce buyer who is acting as a trustee under the Perishable Agricultural Commodities Act (PACA). Read more

The Bankruptcy Appellate Panel of the Ninth Circuit Court of Appeals has determined that the period to give notice under Section 546(b) of the Bankruptcy Code for maintaining or continuing the perfection of a mechanic’s lien is not tolled by Section 108(c). Read more

Attorneys for trustees can be paid for rendering legal services but not for performing trustee duties. That line, however, is not always easy to identify. The Read more

he Fifth Circuit Court of Appeals (the “Circuit”) rejected an exculpation clause for certain non-debtors included in a bankruptcy court’s Chapter 11 confirmation order but approved a gate-keeping function which allowed that court to screen and bar bad-faith litigation against the reorganized debtor, its successors, and other bankruptcy participants that might disrupt the plan’s effectiveness.  Read more

The Third Circuit Court of Appeals (the “Circuit”) reversed a decision by the Delaware bankruptcy court which had dismissed an adversary proceeding because the bankruptcy court ruled it did not have post confirmation jurisdiction to interpret and enforce a discharge injunction contained in the confirmation order. Read more

The United States Court of Appeals for the Fifth Circuit (the Court) recently ruled that confusion that a judgment debtor allegedly experienced from receipt of a debt collection letter was not a concrete injury as required for Article III standing under the Fair Debt Collection Practices Act (FDCPA). Perez v McCreary, Veselka, Bragg & Allen, P.C., 2022 WL 3355249 (5th Cir. August 15, 2022). Read more

On July 8, 2022, the U.S. Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of an action under the Perishable Agricultural Commodities Act (“PACA”), determining that the allegations of a provider of alternative financing were sufficient to show that it acted as a seller of produce and not necessarily as a lender. Produce Pay, Inc. v. Izguerra Produce, Inc., 39 F.4th 1158 (9th Cir. 2022). Read more