Business Law Insolvency Law Committee

The United States Court of Appeals for the Third Circuit (the Circuit) recently vacated and remanded a denied class certification motion pertaining to consumer requests for disclosures under the Fair Credit Reporting Act. Read more

The United States Bankruptcy Court for the Southern District of New York (the “Court”), In re Corinthian Communications, Inc., 2022 WL 3051570 (Bankr. S.D.N.Y. August 3, 2022) recently found cause to expand the Subchapter V trustee’s powers under bankruptcy code section 1183(b)(2) to include an investigation of the debtor, operation of the debtor’s business, and to make a determination about the desirability of the continuation of such business pending further consideration of removing the Subchapter V debtor from possession for cause under section 1185(a) before removing the debtor notwithstanding the statutory requirement to do so before expanding the trustee’s powers. Read more

In a recently published opinion, the United States Bankruptcy Appellate Panel for the Ninth Circuit (the BAP) held that the findings necessarily made by the Oregon state court in issuing a judgment for financial elder abuse against a debtor had issue preclusive effect in a nondischargeability proceeding brought in the bankruptcy court under § 523(a)(4) of the Bankruptcy Code (the Code), specifically as to larceny and embezzlement. Read more

The Sixth Circuit Court of Appeals held that in determining the reasonableness of professional fees under section 330(a)(3) of the bankruptcy code, the lodestar factors specifically codified by Congress do not preclude consideration of other relevant factors, including the “results obtained” by the professionals. Read more

In Ad Hoc Committee of Holders of Trade Claims v. Pacific Gas and Electric Company (In re PG&E Corp. (“PG&E”), 46 F.4th 1074, 2022 WL 3712478 (August 29, 2022), the United States Ninth Circuit Court of Appeals (the “Ninth Circuit”) held that in a solvent Chapter 11 case the debtor’s plan had to pay unimpaired unsecured creditors who were not allowed to vote postpetition interest at the contract or state law default rate rather than the federal judgment rate. Read more

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