As an officer of the court every attorney is held accountable to the standards set forth in the Rules of Professional Conduct. In bankruptcy court, attorneys are held to additional standards set forth in local bankruptcy law. A violation of the rules can result in harsh sanctions as attorney Richard Gates discovered in In re Gates, Misc. Case No. 18-00301-KRH (Bankr. E.D. Va. Apr. 5, 2018).
InIn re Blasingame, 2018 WL 2084789 (B.A.P. 6th Cir. May 3, 2018), the Sixth Circuit Bankruptcy Appellate Panel demonstrates that trusts can be used to protect assets from the reach of creditors in the context of a bankruptcy.
The Ag industry continues to face financial challenges. The potential of a bankruptcy notice remains ever present. Ignore a bankruptcy notice at your own peril.
Pay close attention to any mail involving a bankruptcy case – because every bankruptcy case in which the Debtor owes you or your institution money, or has property you or your institution may have an interest in, has the potential to affect your interests. Consider the following hypotheticals:
The United States Bankruptcy Court for the Western District of Michigan recently issued an opinion in a case that involved mutual claims between the debtor and a creditor, and lifted the automatic stay to allow a creditor to exercise “setoff” rights provided by state law to recover its debt.1
The Background
Filing for Chapter 13 bankruptcy as a consumer is a voluntary decision. Once a Chapter 13 case has been filed, it is also up to the debtors to dismiss the case if they so choose.
What happens if, after a Chapter 13 case has been filed and a plan confirmed, a debtor decides to dismiss the case but the Chapter 13 trustee is holding funds that would have otherwise been distributed to creditors?
Delaware District Judge Leonard P. Stark has seemingly split with the Second Circuit and held that the safe harbor in Section 546(e) of the Bankruptcy Code does not bar fraudulent transfer claims brought on behalf of creditors under state law, ratifying a June 2016 opinion from Delaware Bankruptcy Judge Kevin Gross.
In bankruptcy, one of the “powers” granted to a trustee is the ability to undo previously completed transactions in order to facilitate payments to creditors. However, the Bankruptcy Code prevents a trustee from unwinding certain types of transactions. The safe harbor provision of 11 U.S.C. § 546(e) protects financial institutions performing securities transactions from having to disgorge payments initially made by a now bankrupt company.
Numerous changes to the Federal Rules of Bankruptcy Procedure (the “Rules”) take effect on December 1, 2017. The changes significantly impact the administration of consumer bankruptcy cases, and Chapter 13 cases in particular.
Some of the most significant changes to affect creditors, explained in more detail below, include:
The United States Bankruptcy Court for the Western District of Michigan recently issued an opinion in a bankruptcy case involving a husband and wife who filed for Chapter 7 bankruptcy protection.
Two proposed bills are working their way through the Michigan Legislature that would significantly impact state law pertaining to commercial real estate receiverships.
Specifically, House Bills 4470 and 4471 were approved by the Michigan House of Representatives in early November 2017 and have been sent to the State Senate for consideration.