The failure of debtors to accurately list and value assets in their bankruptcy schedules is certainly not a new phenomenon. Recently, however, we are witnessing an increase in bankruptcy cases where debtors are using clever and deliberate means to omit assets or disguise the true value of their assets in an attempt to thwart recovery by creditors. While the U.S. trustee's or a creditor's remedy for such bad acts is to seek a denial of the debtor's discharge under 11 U.S.C.

In a recent case, a lawyer was sanctioned by an Ohio bankruptcy judge for his conduct in connection with an adversary proceeding he brought on behalf of a client against a Chapter 7 debtor. The lawyer was vindicated, though, after the Bankruptcy Appellate Panel of the Sixth Circuit (the “BAP”) reversed the bankruptcy court on appeal.

Background Facts

Bankruptcy is a process that permits people to discharge debts, but not all debts are dischargeable. In a recent opinion, the U.S. District Court for the Eastern District of Michigan (the “District Court”) reversed a U.S. Bankruptcy Court for the Eastern District of Michigan (the “Bankruptcy Court”) ruling that a state court criminal restitution claim is dischargeable.

THE BACKGROUND FACTS

On Aug. 4, 2015, in City of Concord, New Hampshire v. Northern New England Telephone Operations LLC (In re Northern New England Telephone Operations LLC), No. 14-3381 (2nd Cir. Aug. 4, 2015), the U.S. Court of Appeals for the Second Circuit addressed the circumstances under which a creditor's lien on the property of a debtor may be extinguished through a Chapter 11 plan of reorganization.

On November 5, 2015, the United States Bankruptcy Court for the Northern District of California issued a “Memorandum re Plan Confirmation” in In re Bowie, Case No. 15-10144 (Bankr. N.D. Cal. Nov.

Students have taken on more than $1 trillion in debt to pay for the relentlessly rising costs of higher education. With that much debt outstanding, it’s no surprise that there are increasing numbers of borrowers defaulting on student loan debt, and seeking to discharge that debt by filing for bankruptcy protection. But, as a Wisconsin man recently learned, discharging student loan debt in bankruptcy is no easy feat.

Pursuant to Section 727 of the U.S. Bankruptcy Code, an individual Chapter 7 debtor may receive a discharge "from all debts that arose before the date of the order for relief under this chapter." A Chapter 11 or Chapter 13 debtor may receive similar relief pursuant to Sections 1141 and 1328(b), respectively. Under any chapter, this discharge serves the Bankruptcy Code's principal goal of relieving a debtor from his or her prepetition obligations and providing the debtor with a "fresh start" on emergence from bankruptcy.

Under the Uniform Commercial Code (UCC), a secured party can perfect its lien on certain of a debtor's assets by the filing of a UCC-1 financing statement. However, Section 9-509 of the UCC provides that a party may file such a financing statement only if the debtor authorizes the filing: either expressly in an authenticated record or, more commonly, by executing a security agreement. The UCC does not specify when a debtor must provide such authorization, but the U.S.

Compensation for bankruptcy professionals employed in bankruptcy cases is governed by Section 330 of the Bankruptcy Code. Section 330(a)(1) of the code provides, in pertinent part, that "the court may award to ... a professional person employed under Section 327 or 1103—(A) reasonable compensation for actual, necessary services rendered." Professionals whose employment is approved by the bankruptcy court consequently must file fee applications, to be reviewed and approved by the court for work performed in the bankruptcy case.

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.