Business Law Insolvency Law Committee

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

The United States District Court for the District of Connecticut recently reversed a Bankruptcy Court order dismissing the chapter 7 case of a former manufacturing company that had ceased operations in 2004 and sold its assets in 2008 but faced thousands of asbestos lawsuits arising from its operations. Read more

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware ruled that a secured creditor did not have a perfected security interest in the proceeds from a court-approved settlement of litigation because those funds arose from the pursuit of commercial torts and the security agreement did not specifically describe that collateral as required by Article 9 of the Uniform Commercial Code (UCC). Read more

he United States District Court for the Southern District of Texas (the Court), ruling on a Bankruptcy Code § 523(a)(6) nondischargeability issue arising from a California judgment, agreed with bankruptcy courts in the Ninth Circuit that a jury finding that a plaintiff is entitled to punitive damages does not automatically mean the debt arose from willful and malicious conduct. Read more

The U.S. Bankruptcy Court for the Northern District of California held that a debtor’s pre-filing decision to return an $8.1 million PPP loan within a safe harbor period constituted a rescission of the PPP loan agreement. Read more

On October 21, 2022 the Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) addressed the issue of whether or not a chapter 13 debtor had an absolute right to dismiss his chapter 13 case. It found that the debtor’s right to do so was nearly absolute. Read more