Business Law Insolvency Law Committee

A California appellate court has held that a trial court order denying judicial reference under Code of Civil Procedure section 638 et seq. is not appealable until the conclusion of the case, in contrast with the appealability of an order denying arbitration. [J.H. Boyd Enterprises, Inc. v. Boyd, 39 Cal.App.5th 802 (Aug. 23, 2019). Read more

In a 2-1 decision reflecting a circuit split, the Eleventh Circuit holds that a guarantor is not an “applicant” under 15 U.S.C. section 1691(a), and therefore cannot bring an action for discrimination under the Equal Credit Opportunity Act (ECOA or Act). Read more

A promissory note is not rendered non-negotiable solely by virtue of a reference to an extrinsic agreement. Negotiability is only destroyed where the holder of the instrument would be required to look beyond the note to determine such holder’s rights with respect to payment. Read more

The Fifth Circuit affirmed the bankruptcy court’s order denying a motion to compel arbitration in an adversary proceeding to discharge student loan debt following completion of a chapter 13 plan, determining that bankruptcy courts continue to have discretion to deny motions to compel arbitration regarding discharge injunctions after the Supreme Court’s opinion in Epic Systems Corp. v. Lewis, -- U.S. --, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018). Read more

In Radiance Capital Receivables Fourteen, LLC v. Foster, 2019 WL 5445522 (Va. Oct. 24, 2019), the Virginia Supreme Court recently upheld the dismissal of a complaint based on a guaranty of a construction loan which was originated by a bank. The guarantor successfully raised a statute of limitations defense, despite a contractual waiver of limitations defenses which appeared in the guaranty. The case is a sample of the variegated state laws on pre-dispute waivers of limitations defenses. It is of more general interest because it deals with the lender’s unsuccessful argument that the guarantor committed promissory fraud in agreeing to the waiver provision by signing the guaranty in the first place. Read more

Adding to the circuit split on the issue, the Third Circuit Court of Appeals adopted the minority view and ruled that a creditor’s passive retention of collateral it repossessed prepetition pending a bankruptcy court order is not a “willful violation” of the automatic stay. Read more

The following is a case update written by Hon. Meredith Jury (United States Bankruptcy Judge, C.D. Cal. Ret.), a member of the ad hoc group of the California Lawyers Association’s (CLA) Business Law Section, analyzing a recent decision of interest. Read more

The bankruptcy court determined after trial that the bankruptcy trustee had met his burden on claims to avoid and recover actual intent and constructively fraudulent transfers under both the Bankruptcy Code and Connecticut fraudulent/voidable transfer statutes against a member and owner of the debtor. Coan v. Chen (in re LXEng LLC), 2019 WL 4146478 (Bankr. D. Ct. 2019). Read more

The following is a case update written by Uzzi O. Raanan, a member of the ad hoc group of the California Lawyers Association’s (CLA) Business Law Section, analyzing a recent decision of interest. Read more

The following is a case update written by Dean T. Kirby, Jr., a member of the ad hoc group of the California Lawyers Association’s (CLA) Business Law Section, analyzing a recent decision of interest. Read more