Last week, the trustee for Fyre Festival LLC’s bankruptcy estate received court authorization to serve subpoenas on 24 individuals and companies connected to the failed music festival, including agencies representing the social media influencers who were instrumental in promoting the event. Payments that these influencers received connected to the festival are now subject to scrutiny as the bankruptcy trustee pieces together the defunct company’s finances.

On January 17, 2019, the Fifth Circuit Court of Appeals issued an opinion holding that a creditor whose rights have been affected by operation of the Bankruptcy Code may nevertheless be “unimpaired” under a chapter 11 plan of reorganization.

On October 26, the U.S. District Court for the Eastern District of Wisconsin denied a plaintiff’s motion for summary judgment and instead entered judgement in favor of two creditors and two consumer reporting agencies (collectively, “defendants”), holding that the debtor failed to show a factual inaccuracy in the credit reporting of a debt.

On November 8, a federal jury for the U.S. District Court for the District of Minnesota awarded the ResCap Liquidating Trust, the post-bankruptcy successor-in-interest to Residential Funding Company, LLC (RFC), a $27.8 million verdict in an indemnity case against a correspondent lender.

On July 27, the U.S.

On June 27, 2018, the Second Circuit denied Nordheim Eagle Ford Gathering, LLC’s petition for a panel rehearing and request that the court certify issues of Texas property law to the Texas Supreme Court. The denial leaves in place the Second Circuit’s May Summary Order affirming the widely publicized decisions of the bankruptcy and district courts below which concluded that the midstream contracts could be rejected because they did not create covenants running with the land under Texas law.

Summary of Key Takeaways

On June 29, the FDIC and Federal Reserve issued (here and here) a joint request for public comment on proposed revisions to resolution plan guidance for the eight largest and most complex U.S. banks.

On May 17, the Colorado Court of Appeals held that an attorney fees award imposed under the Colorado Consumer Protection Act (CCPA) is a civil penalty and is not dischargeable under the Bankruptcy Code.

On May 16, the Federal Housing Administration (FHA) released Mortgagee Letter ML 2018-03 (ML 2018-03), which extends the 180-day foreclosure moratorium on FHA-insured properties in Puerto Rico & the U.S. Virgin Islands affected by Hurricane Maria for an additional 90 days. As previously covered by InfoBytes, in March, FHA extended the moratorium an additional 60 days to May 18.

On May 11, the Supreme Court of Appeals of West Virginia affirmed summary judgment for a consumer who alleged a check cashing company and its debt collector violated the West Virginia Consumer Credit and Protection Act (WVCCPA) by contacting her multiple times after being notified of her Chapter 7 bankruptcy filing.