The U.S. Court of Appeals for the Seventh Circuit recently upheld a trial court’s rejection of a borrower’s allegations that a mortgagee and its servicer violated the federal Fair Credit Reporting Act and the federal Fair Debt Collection Practices Act by allegedly inaccurately reporting her loan as delinquent following the borrower’s successful completion of her bankruptcy plan, allegedly rejecting her subsequent monthly payments, and filing a foreclosure action based on the supposed post-bankruptcy defaults.

The U.S. Court of Appeals for the Eleventh Circuit recently held that the anti-modification provision in the federal Bankruptcy Code applies to loans secured by mixed-use real properties, such as the large parcel at issue here which functioned both for commercial use and as the debtor’s principal residence.

A copy of the opinion in Lee v. U.S. Bank National Association is available at: Link to Opinion.

The Consumer Financial Protection Bureau (CFPB) recently reopened the comment period for its proposed amendments to the mortgage servicing related rules under RESPA and TILA that generally would require servicers to provide modified periodic statements to consumers who have filed for bankruptcy.

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a wholly unsecured second mortgage lien may be “stripped off,” even if the property encumbered by the lien is no longer part of the bankruptcy estate due to abandonment by the bankruptcy trustee.

The Bankruptcy Court did not specifically reference the consolidated cases now before the U.S. Supreme Court in Bank of Amer. v. Toledo-Cardona, and Bank of Amer. v. Caulkett, which should resolve the issue of whether a wholly unsecured lien may be stripped off in a Chapter 7 bankruptcy.

In 2014, the Chilean Legislature enacted legislation that substantially overhauls its prior insolvency law, liberalizing that law as it pertains to business insolvency cases commenced in Chile. As explained below, this new law incorporates a number of provisions that permit the reorganization of financially troubled businesses.

A lingering misperception among American businesspersons and some commercial lawyers is that it is a fool’s errand to commence an insolvency case seeking reorganization in a European nation because those national laws prescribe liquidation rather than rehabilitation. These business leaders often dismiss out-of-hand insolvency relief on the continent for a troubled European subsidiary and elect to wind up the company’s affairs outside the judicial system.

The United States Bankruptcy Court for the District of Delaware recently limited the ability of a secured creditor to credit bid for substantially all of the debtors’ assets because (i) the credit bid would chill, or even freeze, the bidding process, (ii) the proposed expedited private sale pursuant to a credit bid would be inconsistent with notions of fairness in the bankruptcy process, and (iii) the amount of the secured claim was uncertain. In re Fisker Automotive Holdings, Inc., Case No. 13-13087 (Bankr. D. Del. Jan. 17, 2014).

Section 1111(b) of the United States Bankruptcy Code (the “Code”) is one of its least understood provisions, primarily due to its somewhat opaque language. This Code subsection is divided into two distinct but related parts. The first part, section 1111(b)(1), provides that a nonrecourse secured claim in a Chapter 11 case will be treated “as if such holder had recourse against the debtor on account of such claim, whether or not such holder has such recourse” subject to two exceptions.

Recently, the United States Court of Appeals for the Seventh Circuit held that Illinois mortgages entered prior to the amendment of 765 ILCS 5/11 need not strictly conform to the form presented in the statute. In re Crane, --- F.3d ---, 2013 WL 6731850 (7th Cir. Dec. 23, 2013). However, the court’s decision in Crane, considered as a whole, serves as a reminder to secured lenders to closely examine the contents of their mortgages and the requirements of applicable state law.

“You cannot properly appraise the real seriousness of that situation unless you are right there in the city. Everything that frugal men and women put aside for years to save for old age, to get security for themselves –– every¬thing that they put aside to make the lot of their children a better one than their own, is now likely to be swept away. There is only one way that you can lighten the load of the municipality and that is to take its debt service off for the time being. Specifically, so that you will understand it, what is it in the city of Detroit?