• In one of the most high-profile and hotly-watched cases in the London restructuring market, on 18 February 2025, the English High Court approved the restructuring plan proposed by Thames Water.
• The Court gave permission to appeal the Court’s order to a group of challenging junior creditors, a subordinated creditor and Liberal Democrat MP Charlie Maynard, with the Court of Appeal due to sit from 11 to 13 March 2025.

“[T]he appellant would not have acquired priority over other creditors by the sheriff’s levy, for the obvious reason that the right of property in the goods seized under the execution had previously passed” to the assignee under Debtor’s ABC.

• Reed v McIntyre, 98 U.S. 507, 512 (1878).

Facts

The Debtor, in the U.S. Supreme Court’s Reed v. McIntyre opinion, is a merchant.

Before 1998, (i) all student loans from for-profit lenders were dischargeable in bankruptcy, but (ii) student loans backed by the federal government or from non-profits were dischargeable in only these circumstances:

The common law of assignments for benefit of creditors (“ABCs”) has been around for a very long time as an out-of-court process under the law of trusts: debtor is trustor, assignee is trustee, and debtor’s creditors are beneficiaries.

And the common law of ABCs had already been well-established, when the U.S. Constitution was ratified.

The intersection of state escrow laws and federal bankruptcy laws can create confusion and surprise for contracting parties.

The Problem & Four Examples

The problem creating such confusion and surprise is this. State escrow laws:

• are, typically, defined by the common law;
• lack precise details; and
• are often applied in bankruptcy to the detriment of the party who believes a valid escrow exists.

Here are four examples of the escrow / bankruptcy problem.

Two-years prospective relief from the automatic bankruptcy stay is a remedy granted for serial bankruptcy filings, under § 362(d)(4)(B), in In re Karpuleon, Case No. 24-80647 in Central Illinois Bankruptcy Court (entered 12/6/2024; Doc. 48).

Facts

Here’s what happened.

Debtor files a Chapter 13 petition on August 22, 2024—this is Debtor’s fourth such petition in the past four years.

The opinion is Samson v. The LCF Group, Inc. (In re Bridger Steele, Inc.), Adv. No. 2:24-ap-2003 in the Montana Bankruptcy Court (decided September 30, 2024; Doc. 10).

Background

Debtor is a fabricator and seller of metal roofing and siding products.

The common law of assignments for benefit of creditors (“ABC”) has been around for centuries.

ABC is a business debtor’s voluntary liquidation tool—typically utilized in cooperation with a major secured creditor.

Historically, ABCs are attractive to debtors and creditors alike as an efficient, mostly out-of-court tool for maximizing the liquidation value of a business—for the benefit of creditors.

Does a Chapter 7 debtor have appellate standing to protect the homestead exemption?

That’s an issue addressed (sort of) in Karamoussayan v Massachusetts Department of Revenue (In re Karamoussayan), Case No. 22-041, First Circuit Bankruptcy Appellate Panel (decided April 11, 2024).

Chronology

Here’s a chronology.

September 9, 2022 — Debtor files a voluntary Chapter 13 petition

On September 10, 2024, the U.S. Court of Appeals for the Third Circuit issued its opinion in Wells Fargo Bank, N.A. v. The Hertz Corp. (In re The Hertz Corp.), Case No. 23-1169, 2024 WL 4132132 (3d Cir. Sept.