On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code.

Background Facts

In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit (the “Court”) ruled that penalties assessed by the state of Michigan against two debtors, stemming from fraud associated with the wrongful receipt of Michigan unemployment benefits, are non-dischargeable in Chapter 13 bankruptcy pursuant to Bankruptcy Code § 523(a)(2).1

Background Facts

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?

This week’s TGIF considers a priority contest which turned on the construction of section 62 of the PPSA and the reference to a grantor obtaining possession.

What happened?

Bill’s Motorcycles (Bill’s) carried on a business as a motorcycle dealer selling and servicing Kawasaki motorcycles.

This week’s TGIF considers the decision in the matter of Bias Boating Pty Ltd [2017] NSWSC 1524 which deals with leave to join already named defendants to a “mothership” proceeding after expiration of the limitation period

Background

The first plaintiff was appointed administrator of the second plaintiff (the relevant company) on 25 August 2014 and became its liquidator on 29 September 2014.

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:

This week’s TGIF considers the decision of Simpson & Anor v Tropical Hire Pty Ltd (in liq) [2017] QCA 274 in which the Queensland Court of Appeal considered whether a disposition of property by a company after the commencement of its winding up was void

BACKGROUND

Mr Simpson was the sole director and shareholder of Tropical Hire Pty Ltd (company). It had operated a successful business until that business was sold in 2009. After the sale, the company did not trade.

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.