In turbulent economic times, clients often ask us how they can find out whether a particular company or person is in bankruptcy. While we can run quick searches for this information, there are ways you can find this information on your own. If a quick Google search does not yield results, two resources maintained by the U.S. federal courts are the Multi-Court Voice Case Information System (McVCIS) and Public Access to Court Electronic Records (PACER). The first resource is free, and the second requires setting up an online account for payment of relatively small fees.
When a creditor is the target of a bankruptcy trustee or debtor’s claim to take back money paid before bankruptcy on a legitimate debt, it’s bitter justice. The concept is fair enough: pulling funds back into the bankruptcy estate so they can be redistributed to creditors in accordance with the Bankruptcy Code’s priority scheme and on a pro rata basis. In practice, though, it’s hard to see the fairness of giving back money you were entitled to receive. Two statutory amendments that will take effect in late February of 2020 have the potential to put a damper on some preference claims.
Signing the Family Farmer Relief (FFR) Act of 2019 was like opening a pressure release valve. American farmers have suffered increasing financial stress this year from numerous sources, so a change in the law making Chapter 12 available to more farmers is likely to push the number of bankruptcy filings higher.
LEGAL CHANGES
If you have ever been a creditor concerned about a debtor not paying debts as they become due or paying other creditors while ignoring your demands, then forcing the debtor into an involuntarily bankruptcy may be an option. An involuntary petition can be filed only under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the U.S. Bankruptcy Code.
UCC Financing Statements Must Contain the Debtor’s Correct Name
In a recent decision welcomed by creditors, the United States District Court for the Eastern District of North Carolina reversed a bankruptcy court order confirming a Chapter 11 debtor’s plan because the debtor engaged in “obvious gerrymandering” in order to secure the votes necessary to obtain confirmation of the plan.
I. Facts
Borrowers who file a bankruptcy petition are always looking for creative new challenges to claims asserted by their bank creditors. In recent years, debtors have argued that a bank’s issuance of an Internal Revenue Code form 1099-C “Cancellation of Debt” has the effect of waiving the bank’s claims against the borrower, and should preclude the bank from having an allowed claim in the bankruptcy case. Fortunately, some recent court opinions state that a bank’s issuance of a 1099-C does not constitute a waiver, and the bank remains entitled to enforce its claim in a subsequent bank
By order issued on February 23, 2012, the United States District Court for the Eastern District of North Carolina vacated the bankruptcy court’s decision in In re Mammoth Grading, Inc. This decision and the companion decision in In re Harrelson Utilities, Inc. held that the lien rights of construction subcontractors and suppliers cannot be perfected once a bankruptcy petition is filed by a party higher in the contract chain.
A recent opinion from the Bankruptcy Court in the Eastern District of North Carolina adds another chapter to the continuing saga of attacks lodged against the validity of deeds of trust encumbering real property owned by debtors. In re Deuce Investments, Inc.