The Bottom Line

The Bottom Line

The Bottom Line

Addressing an issue of first impression in the Eleventh Circuit, the Court in Mantiply v. Horne (In re Horne), 876 F.3d 1076 (11th Cir. 2017), recently held that section 362(k)(1) of the Bankruptcy Code authorizes payment of attorneys’ fees and costs incurred by debtors in successfully pursuing an action for damages resulting from an automatic stay violation and in defending the damages award on appeal.

What Happened?

Overview

Bottom Line

In its recent decision in Mitchell v. Zagaroli, Adv. Pro. No. 20-05000, 2020 WL 6495156 (Bankr. W.D.N.C. Nov. 3, 2020), the Bankruptcy Court for the Western District of North Carolina held that the Chapter 7 trustee could step into the shoes of the IRS and utilize the IRS’ longer look-back period to avoid fraudulent transfers.

What Happened?

What: This evening, March 19, Senate Majority Leader Mitch McConnell introduced a bill called the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The proposed bill is intended to provide relief to various sectors of the U.S. economy. Of particular interest is the Coronavirus Economic Stabilization Act of 2020, set forth in Division C, Title I of the proposed bill, which provides assistance to severely distressed sectors of the U.S. economy, including (but not limited to) airline carriers.

Who Does This Impact:

The Bottom Line

In Whirlpool Corp. v. Wells Fargo Bank (In re hhgregg Inc.), Case No. 18-3363 (7th Cir. Feb. 11, 2020), the Seventh Circuit held that a trade creditor’s later-in-time reclamation claim was subordinate to lenders’ pre-petition and debtor-in-possession (“DIP”) financing liens. The Seventh Circuit found that Sction 546(c) of the Bankruptcy Code creates a “federal priority rule,” making clear that a reclamation claim is subordinate to prior rights of a secured creditor.

What Happened?

The Bottom Line

On May 20, 2019, in Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ---, 139 S. Ct. 1652 (2019), the Supreme Court resolved a split among the circuits, holding that a licensor’s rejection of a trademark license in bankruptcy constitutes a prepetition breach, but does not terminate the license.

The Bottom Line