“The discharge of claims in bankruptcy applies with no less force to claims that are meritorious, sympathetic, or diligently pursued. Though the result may chafe one’s innate sense of fairness, not all unfairness represents a violation of due process.”

On March 19, 2021, the United States Court of Appeals for the Third Circuit issued a unanimous decision[1] affirming that the mutuality requirement of section 553(a) of the Bankruptcy Code must be strictly construed and, therefore, that triangular setoffs are not permissible in bankruptcy.

In a decision arising out of Tribune’s 2008 bankruptcy, the United States Court of Appeals for the Third Circuit recently issued a decision affirming confirmation of the media conglomerate’s chapter 11 plan over objections raised by senior noteholders who contended that the plan violated their rights under the Bankruptcy Code by not according them the full benefit of their prepetition subordination agreements with other creditors.

A New York bankruptcy court recently allowed a pro se debtor to discharge over $200,000 in student loan debt, vehemently rejecting as “punitive” more recent legal authority concerning how student loan debts may be discharged in bankruptcy.

Creditors and debt collectors are often held to high standards when it comes to consumer protection laws. On December 17, however, the United States Bankruptcy Court for the Northern District of Illinois issued a Memorandum Opinion in In re: Charles V. Cook, Sr., No. 1:14-bk-36424, evincing that debtors’ counsel can be subject to similarly high standards when appropriate.

On October 22, the Court of Appeals for the Fifth Circuit issued a ruling in Crocker v. Navient Solutions that could have mixed consequences for student loan borrowers and creditors alike. The Court determined that a bankruptcy court lacks the authority to enforce discharge injunctions issued by bankruptcy courts in other districts.

In Kinnick v. Med-1 Solutions, LLC, the District Court for the Southern District of Indiana found that sending a collection letter to a bankruptcy debtor provided that debtor with standing to file a claim based on the Fair Debt Collection Practices Act against the creditor outside of the bankruptcy case.

On October 7, California Governor Gavin Newsome signed SB 616 into law. This new law, which goes into effect on September 1, 2020, includes changes to California law regarding garnishments.

The Consumer Financial Protection Bureau published its quarterly consumer credit trends report on September 25. In the Report, the CFPB gave an in-depth look at bankruptcy trends and the impact of filing for the period 2001-2018, which includes the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) and the Great Recession.

The U.S. Supreme Court held today in Mission Product Holdings, Inc. v. Tempnology, LLC that a trademark licensee may retain certain rights under a trademark licensing agreement even if the licensor enters bankruptcy and rejects the licensing agreement at issue. Relying on the language of section 365(g) of the Bankruptcy Code, the Supreme Court emphasized that a debtor’s rejection of an executory contract has the “same effect as a breach of that contract outside bankruptcy” and that rejection “cannot rescind rights that the contract previously granted.”