On Jan. 21, in Official Committee of Unsecured Creditors of Motors Liquidation v. JPMorgan Chase Bank (In re Motors Liquidation), No. 13-2187, (2d Cir. Jan. 21, 2015), the U.S. Court of Appeals for the Second Circuit addressed whether a UCC-3 termination statement, which was improperly filed as part of the repayment of an unrelated loan, may be considered effective to terminate the security interest in question, even where none of the parties intended that result.
Last month, the Supreme Court announced its decision in Baker Botts LLP v. Asarco LLC. As most readers will be aware, that case involved a dispute over whether debtor’s retained counsel could be compensated for the fees and expenses incurred in the defense of its bankruptcy fee application.
Section 303 of the Bankruptcy Code provides creditors with a mechanism to force a recalcitrant debtor into bankruptcy through the filing of an involuntary petition for relief. Pursuant to this section, an involuntary bankruptcy case may be commenced only under Chapter 7 or 11 of the Bankruptcy Code, and may only be brought against a person otherwise qualified to file a voluntary petition. Where the purported debtor has fewer than 12 creditors, the involuntary petition need only be filed by a single creditor.
People are generally familiar with the concept that a party’s right to appeal applies to those orders that are “final.” A “final” order is one that resolves or disposes of the disputes between the parties. While an interlocutory order may be appealable at the discretion of the appellate court, the aggrieved party has no absolute right to appeal an order that is not “final.”
In a case of first impression in Texas, the United States Bankruptcy Court for the Southern District of Texas held that the former majority member of a chapter 11 LLC debtor had to relinquish control of the LLC's Facebook page and Twitter account because they were property of the LLC's bankruptcy estate. In re CTLI, LLC, Case No. 14-33564, 2015 WL 1588085 (Bankr. S.D. Tex. April 3, 2015). CTLI, LLC was a Texas gun store and shooting range doing business as Tactical Firearms.
Most bankruptcy lawyers are familiar with section 1111(b) and its attempt to rectify a perceived unfairness resulting from the ruling in In re Pine Gate Assocs., Ltd., Case No. B75-4345A, 1976 U.S. Dist. LEXIS 17366 (N.D. Ga. Oct. 14, 1976). In Pinegate, the creditor’s collateral had depreciated as the result of a cyclical market fluctuation.
In an effort to protect the property of a bankruptcy estate, Section 362(a) of the U.S. Bankruptcy Code imposes an automatic stay on most proceedings against a debtor in bankruptcy. The policy of this section is to grant relief to a debtor from creditors, and to prevent a "disorganized" dissipation of the debtor's assets. (See, e.g., U.S. Securities and Exchange Commission v. Brennan, 230 F.3d 65, 70 (2d Cir. 2000).) However, the scope of the automatic stay is not all-encompassing.
What began as a garden variety bankruptcy claims objection has ended with a sharply-worded, sixty-page opinion, in which the Sixth Circuit’s Bankruptcy Appellate Panel ( “BAP”) affirmed a bankruptcy court’s $200,000 sanctions order entered against the creditor’s attorney.
In Harrington v. Simmons (In re Simmons), 513 B.R. 161 (Bankr. D. Mass. 2014), the U.S. Bankruptcy Court for the District of Massachusetts considered the U.S. trustee's request that a Chapter 7 debtor be denied a discharge for his failure to maintain adequate financial records or satisfactorily explain the loss of his assets.
“Bad news comes in threes.” “Third time’s the charm.” “Three strikes and you’re out.”
One of these three adages may come to characterize the outcome of a case of significant import argued before the US Supreme Court this week. The Supreme Court heard arguments on Wellness Int’l Network, Ltd. v. Sharif. The case is the third in a trilogy including Stern v. Marshall and Executive Benefits Ins. Agency v. Arkison, which examine the scope of the constitutional exercise of judicial power by bankruptcy courts.