Introduction
This paper aims to present a brief summary of significant legal decisions over the past year, as they relate to and impact Ontario consumer bankruptcy and insolvency practitioners. It is by no means necessarily comprehensive or exhaustive.
Effect of an Order of Discharge on driver’s licenses and outstanding penalties
Introduction
A bankruptcy discharge hearing is the forum for the Court’s determination of a bankrupt’s application for discharge which has been opposed by one or more of: a creditor, the Trustee, or the Superintendent of Bankruptcy. This paper will aim to provide practical advice on preparing for and arguing an opposed discharge, whether from the perspective of the bankrupt, an opposing creditor, or the Trustee.1
Discharge
Pension issues in the American Airlines (AMR) bankruptcy1 have resulted in the Internal Revenue Service (IRS) issuing new final regulations, effective November 8, 2012 (Final Regulations), which broadly impact all debtors facing underfunded pension plan obligations. The Final Regulations provide chapter 11 bankruptcy debtors facing distress terminations of their tax-qualified defined benefit pension plans with the additional option of amending the plans to eliminate accelerated payment options.
The term “frenemy” – a combination of the words friend and enemy – has emerged from modern vernacular to describe someone who is simultaneously a partner and an adversary. The term is perhaps perfectly emblematic of the restructuring process where various constituents make and break alliances in an effort to steer the restructuring process. In so doing, the lines between friend and enemy are often blurred or altered during the course of the restructuring.
In Ogle v. Fidelity & Deposit Co. of Maryland, 586 F.3d 143 (2d Cir. 2009), the Second Circuit has now become the second circuit court of appeals to recently conclude that general unsecured creditors may include postpetition attorneys’ fees as part of their claim when attorneys’ fees are permitted by contract or applicable state law.11
Although courts are generally reluctant to equitably subordinate claims of non-insiders, the United States Bankruptcy Court for the District of Montana recently did just that to the claims of a non-insider lender based on overreaching and self-serving conduct in Credit Suisse v. Official Committee of Unsecured Creditors (In Re Yellowstone Mt. Club, LLC), Case No. 08-61570-11, Adv. No. 09-00014 (Bankr. D. Mont. May 13, 2009).