The Victorian Court of Appeal and a Full Court of the Federal Court have each recently held that the statutory priority regime applies to the winding up of companies that act as trustees of trading trusts, confirming that employee claims and a liquidator’s remuneration and costs are priority debts. Special leave to appeal the Court of Appeal’s decision has been sought.
On April 3, the U.S. District Court for the Eastern District of Pennsylvania denied a motion to move an action, filed by a group of online payday lenders (defendants), from Pennsylvania to Texas. The defendants—who filed for bankruptcy in Texas last year—sought to centralize lawsuits referred to by the court as ”rent-a-bank” and “rent-a-tribe” schemes.
On March 20, the CFPB released updated FAQs to support the implementation of the 2016 Mortgage Servicing Final Rule. Specifically, the updated FAQs pertain to the mortgage-servicing provisions regarding bankruptcy, which are effective April 19. The CFPB released ten bankruptcy-related question and answers.
On March 7, Fannie Mae, in Lender Letter LL-2018-01, and Freddie Mac, in Guide Bulletin 2018-04, extended the suspension of foreclosure sales through May 31 of mortgaged properties in FEMA-declared disaster areas in Puerto Rico and the U.S. Virgin Islands due to Hurricanes Irma and Maria.
On March 7, the U.S. Court of Appeals for the 2nd Circuit denied a bank’s motion to compel arbitration, holding that arbitration of the debtor’s claims would present an inherent conflict with the intent of the Bankruptcy Code because the dispute concerns a core bankruptcy proceeding.
On March 8, the CFPB issued a final rule updating technical aspects of the upcoming periodic statement requirements for borrowers in bankruptcy under Regulation Z.
On March 1, the Federal Housing Administration (FHA) released Mortgagee Letter ML 2018-02 (ML 2018-02), 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 60-days. The foreclosure moratorium is now in effect until May 18.
Can you prefer one creditor by arranging a third party loan, the proceeds of which are paid directly to that creditor, without the arrangement being void against your trustee in bankruptcy? “Yes” says the Full Federal Court – thus confirming an important distinction between personal and corporate insolvency.
Rambaldi (Trustee) v Commissioner of Taxation, in the matter of Alex (Bankrupt) [2017] FCAFC 217
On February 21, the U.S. Department of the Treasury released a report on the Orderly Liquidation Authority (OLA) and Bankruptcy Reform.
On February 21, the Department of Education published a Request for Information (RFI) seeking feedback on whether there is a need to clarify the threshold for “undue hardship” when evaluating bankruptcy cases in which borrowers seek to discharge student loans. According to the RFI, current U.S.