On June 26, 2017, the Supreme Court granted certiorari in PEM Entities v. Levin to decide whether bankruptcy courts should apply a federal multi-factor test or an underlying state law when deciding whether to re-characterize a debt claim as equity. The Court’s decision to grant cert in this case should resolve a circuit split and clarify the law as it relates to re-characterizing corporate debt as equity.

One of the primary reasons that most debtors seek bankruptcy relief is the automatic stay, which prevents creditors from pursuing collection efforts outside of the bankruptcy proceedings. Creditors can, however, seek relief from the automatic stay from the bankruptcy court under certain circumstances.

What happens in a Chapter 13 bankruptcy case when a creditor files a proof of claim involving a debt for which the statute of limitations to collect the debt has run? More specifically, does the filing of such a claim violate the Fair Debt Collection Practices Act (the “Act”)? That’s the issue considered by the U.S. Supreme Court in its recent decision in the case of Midland Funding, LLC v. Johnson. 1

In a recent decision, the Bankruptcy Appellate Panel of the Sixth Circuit (the “Court”) considered the issue of asset “abandonment” in a Chapter 7 case[1]. The Court reversed the bankruptcy court’s decision to allow the Chapter 7 trustee to compromise a claim that the debtor argued the trustee had abandoned.

Background

In the case of Susan G. Brown v. Douglas Ellmann [1], the U.S. Court of Appeals for the Sixth Circuit (the “Sixth Circuit”) recently affirmed a bankruptcy court’s decision to deny a Chapter 7 debtor’s proposed exemptions for the value of redemption rights she enjoyed under Michigan law related to the sale of a property she surrendered to the bankruptcy estate.

Background

The Court of Appeal in Harvey v Dunbar Assets plc [2017] EWCA Civ 60 has confirmed that parties cannot re-litigate failed arguments that have previously been presented in bankruptcy proceedings.

This will be welcome news for creditors in situations where debtors rehearse the same arguments at several stages of the bankruptcy process in an attempt to deter enforcement by driving up legal costs and drawing out proceedings.

The facts

Parties in the construction sector seeking to enforce an adjudicator’s decision against a

company with the benefit of a statutory moratorium were given fresh guidance in the recent case of South Coast Construction Ltd v Iverson Road Ltd [2017] EWHC 61.

Facts

In September 2013 Iverson Road Ltd (“Iverson”) engaged South Coast Construction Ltd (“SCC”) to complete various building works in London. In June 2016 SCC halted the work for non-payment of sums due by Iverson.

Many bankruptcy cases involve adversary proceedings in which creditors seek to have certain debts deemed nondischargeable. The United States District Court for the Eastern District of Michigan (the “District Court”) recently considered, on appeal, whether the Bankruptcy Court properly held that a debt owed by a debtor (the “Debtor”) to the State of Michigan Unemployment Insurance Agency (the “Agency”) is dischargeable in a Chapter 13 case.1

The Housing and Planning Act 2016 (the “Act”) introduces special administration procedures for social housing associations which aim to protect the level of social housing in the UK. The new housing administration orders (“HAOs”) create an additional objective for insolvency practitioners to try to keep social housing in the regulated housing sector to maintain levels of social housing.

While bankruptcy relief is available as a tool for individuals to discharge debts, it is not available to everyone, under all circumstances. Before a debtor can, for example, discharge debts in a Chapter 7 bankruptcy, he or she must prove that debts and income are within certain statutory thresholds. When determining whether an individual is eligible for relief, the nature of the debts at issue is also relevant.