On May 16, 2016, the United States Supreme Court decided the term “actual fraud” in Bankruptcy Code § 523(a)(2)(A) encompasses forms of fraud, like fraudulent conveyance schemes, that can be effected without a false representation by a debtor. Importantly, the Husky International Electronics, Inc. v. Ritz, No. 15-145, 2016 WL 2842452 (U.S. May 16, 2016) opinion clears up a split among the lower courts on the question of whether the phrase “actual fraud” requires a false representation to be made to a creditor.

Delaware has long been the bellwether for law concerning the duties that corporate officers and directors owe to a company and its creditors, and Florida courts often look to Delaware cases and compelling authority in evaluating disputes alleging breaches of fiduciary duties by directors or officers.  A recent significant Delaware opinion has helped clarify what duties officers and directors owe to whom and when.  In Quadrant Structured Products Co. v. Vertin, 2015 WL 2062115 *1 (Del. Ch.

People often enter into agreements through which a person or entity borrows money in exchange for a security interest on property that he or it owns. However, in drafting an agreement which establishes a security interest, it is important to make sure that the document is legally enforceable. The bankruptcy court’s order granting summary judgment in Theresa Bender v. Christopher James, Case No. 14-01001-KKS, ECF No. 50 (Bankr. N.D. Fla. Feb. 11, 2015) demonstrates the importance of making sure that such an agreement contains an adequate description of the collateral.

Creditors of an entity or individual who is not paying its or his debts as they ordinarily come due may seek to have the alleged debtor adjudicated a bankrupt by the filing of an involuntary petition.  Section 303 of the Bankruptcy Code governs the filing of involuntary bankruptcy petitions and allows creditors to force debtors into a liquidation or reorganization.

A commercial landlord’s failure to terminate properly a commercial lease can lead to long drawn-out legal battles between the commercial landlord and tenant, before and after the tenant files for chapter 11 bankruptcy protection.  In particular, a commercial landlord’s failure to elect and effectively pursue its remedy of lease termination may preclude any subsequent action in bankruptcy to gain possession of the premises even after a writ of possession has issued.

Since 2008, many individuals have been looking for investments outside of bonds or the stock market that provide guaranteed payments at higher rates of return.  Some have turned to investing in precious metals, while others have looked to investing in life insurance policies.  Many are familiar with the word “viaticals” that became well known during the 1980’s, when people began purchasing life insurance policies on the lives of people with chronic or terminal illnesses, such as AIDS.  With viaticals, the insured usually had a limited life expectancy and the owner of the viat

When a chapter 11 plan of reorganization contains no provision that allows for the full debt to be collected in the event of a debtor’s nonpayment, the creditor’s obligation cannot be accelerated under Florida law absent an acceleration provision. The recent case of Baggett Bros. Farm, Inc. v. Altha Farmers Co-op., Inc., No. 1D:13-4200, 39 Fla. L. Weekly D2127, 2014 WL 5033350 (Fla. 1st DCA Oct. 9, 2014), reh’g denied (Nov. 7, 2014) highlights this point.

In large chapter 11 cases, millions of dollars often hinge on the appropriate interest rate. Chapter 11 debtors may not require impaired secured creditors to accept a proposed plan of reorganization unless the plan provides that secured creditors will receive future payments that are equivalent to the value of the creditors’ secured claims.  In order to satisfy this requirement, a debtor must propose an interest rate that will compensate these creditors for receiving deferred cash payments in lieu of a lump sum.

In recent cases where lawyers have signed proofs of claim for their clients and litigation ensued, the signing attorneys were deposed with respect to the facts surrounding submission of the claims.  For some time, an attorney who signed a proof of claim on his client’s behalf has been risking disqualification or being called as a fact witness concerning the factual basis for the claim in related litigation.

As many areas continue to rebound slightly from the real-estate downturn, much litigation still exists related to the exposure of guarantors for corporate-entity real estate loans.   In many instances a corporation or Limited Liability Company (LLC) may have filed for Chapter 11 in an effort to stave off a foreclosure and restructure the secured debt. However, it is well settled that a corporate bankruptcy case does not operate to discharge a guaranty from a guarantor who is not in bankruptcy.