A bankruptcy judge in the Middle District of Florida recently sustained a Chapter 7 trustee’s objection to a non-Florida resident debtor’s attempted claim of the Florida homestead exemption. Although the debtor had lived in her Florida home for more than 20 years, she was not a United States citizen or a permanent resident with a so-called “green card.” Additionally, none of the debtor’s family members also living in the home were citizens or permanent residents.

In February 2020, just prior to the COVID-19 outbreak, the Small Business Reorganization Act of 2019 (Subchapter V) took effect.[1] Subchapter V amends Chapter 11 of the Bankruptcy Code to allow certain individuals and businesses with debts of less than $2,725,625 to file a streamlined Chapter 11 case with the goal to make small business bankruptcies faster and cheaper.[2]

Chapter 11 bankruptcy cases are most frequently filed by businesses. However, certain high-earning individuals whose debts are above the statutory debt limits to qualify for Chapter 13 can also file for Chapter 11 relief. In Chapter 11 cases, the debtor retains control of its operations as a debtor in possession (DIP) and has the benefits and duties that are held by a Chapter 7 trustee. However, if the debtor acts in bad faith or mismanages the bankruptcy estate during the course of the case, a Chapter 11 trustee may be appointed to operate the business going forward.

Chapter 7 bankruptcy cases are straight liquidations sought by debtors who wish to have most or all of their debts discharged. In Chapter 7 cases, the Chapter 7 trustee obtains control over the debtor’s assets and evaluates whether any equity exists that would offset the costs of selling those assets. If the bankruptcy estate will likely profit from selling the debtor’s assets, the Chapter 7 trustee will liquidate the assets and distribute the proceeds to creditors. This is called an “asset case.”

Earlier this year, Chapter 11’s new Subchapter V became a part of the Bankruptcy Code when the Small Business Reorganization Act of 2019 (SBRA) became effective.

With two decisions (No. 1895/2018 and No. 1896/2018), both filed on 25 January 2018, the Court of Cassation reached opposite conclusions in the two different situations

The case

The Constitutional Court (6 December 2017) confirmed that Art. 147, para. 5, of the Italian Bankruptcy Law does not violate the Constitution as long as it is interpreted in a broad sense

The case

With the decision No. 1195 of 18 January 2018, the Court of Cassation ruled on the powers of the extraordinary commissioner to require performance of pending contracts and on the treatment of the relevant claims of the suppliers

The case

The Court of Cassation with a decision of 25 September 2017, No. 22274 confirms that Art. 74 of the Italian Bankruptcy Law provides a special rule, which does not apply to cases to which it is not explicitly extended

The case

With the decision No. 1649 of 19 September 2017 the Court of Appeals of Catania followed the interpretation according to which a spin-off is not subject to the avoiding powers of a bankruptcy receiver

The case