“[T]his Court finds that the exceptions to discharge under §523(a) only apply to individuals in Subchapter V.”
- Spring, et al. v. Davidson and Blok Industries, Inc. (In re Davidson; In re Blok Industries, Inc.; Jointly Administered), Adv. No. 23-3005, Doc. 87, at 15 (Bankr., N.D. Fla., decided February 14, 2025).
Facts
- “While the pre-petition Debtor may have consented to waiver of the automatic stay in favor of [secured creditor], . . . other creditors did not”; and
- “The automatic stay is designed to protect both debtors and creditors alike.”
In re DJK Enterprises, LLC, Case No. 24-60126, Doc. 196, at 13 (Bankr., S.D. Ill., February 13, 2025).
In re DJK Enterprises
“[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.
Terminating DoCA's (Part 3) – Administrators' Casting Vote
Commissioner of State Revenue v McCabe (No. 2) [2024] FCA 662 ("McCabe")
IMO Academy Construction & Development Pty Limited [2024] NSWSC 808 ("Academy Construction")
Summary
Where there is a deadlock between the majority in value of creditors and those creditors with a majority in number on the vote for a DoCA, the administrator has a casting vote.
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.
Terminating DoCA's (Part 2) – Unfair Prejudice or Injustice
Canstruct Pty Limited v Project Sea Dragon Pty Limited (No. 4) [2024] FCA 112 ("Canstruct")1
Commissioner of State Revenue v McCabe (No. 2) [2024] FCA 662 ("McCabe")
Academy Construction & Development Pty Limited [2024] NSWSC 808 ("Academy Construction")
Deeds of Company Arrangement – Insured Claims
Destination Brisbane Consortium Integrated Resort Operations Pty Ltd as Trustee v PCA (Qld) Pty Ltd (subject to a Deed of Company Arrangement) [2024] QSC 178 ("Destination Brisbane")
In Destination Brisbane two questions, which concerned the entitlements of insured creditors under a DoCA, arose for consideration in the context of an application for judicial advice: