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Can the contempt remedy for a creditor’s violations of the discharge injunction in multiple bankruptcy cases throughout the land be imposed in a class action lawsuit?

Judge Jacqueline P. Cox recently found that three Illinois attorneys violated their ethical obligations by failing to return their client’s phone calls. She thus ordered the attorneys to return half of their already-court-approved, and paid, flat fee.

In In re: Dennis Molnar, 19-bk-09525, 2024 WL 190919 (Jan. 17, 2024 N.D, Ill.), the debtor filed a petition seeking relief under chapter 13. Originally, three attorneys from the same firm represented the debtor. The attorneys appeared pursuant to a “no look,” flat-fee program for chapter 13 debtors’ attorneys.

A helpful analysis of statute of limitations issues for fraudulent transfer claims brought by a bankruptcy trustee under § 544(a)&(b) is provided in a recent Circuit opinion.

Overview

You can’t make this stuff up. The legal issues are pedestrian. But the facts behind those issues are incredible!

Litigation History

Here’s the boring stuff first.

On January 8, 2024, the U.S. Supreme Court denies certiorari in Mann v. LSQ Funding Group, L.C. (Case No. 23-425). Here’s the procedural background:

In 2023, the economies of some nations stagnated, but developing economies particularly struggled. As a new year commences, some of these countries will continue their efforts at restructuring their debts—a process that has been going on for years.

2023 is the year that the need for a uniform state law on assignments for benefit of creditors became obvious.

And a Drafting Committee at the Uniform Law Commission began working in 2023 to create such a law.

Here are some of the reasons why the need became obvious.

Background and Purpose

2023 has been a good year for developing the law of Subchapter V through court rulings and opinions. Here are some of the highs and lows of that development.

Working as Intended

If 2023 shows us anything, it’s this: Subchapter V is working as intended.

Subchapter V has developed into the efficient and effective tool for business reorganization it was intended to be. That’s true, whether the reorganization is in the form of continued operations or liquidation. Such a tool did not exist before Subchapter V.