The Supreme Court of Kentucky recently held that under Kentucky law, a security interest in a motor vehicle is not deemed perfected unless and until physical notation of the security interest is made on the certificate of title, pursuant to KRS 186A.190.

Late this summer, the United States District Court for the Northern District of Illinois, Eastern Division, took on an issue of first impression – whether the fraud of one partner can be imputed to an “innocent” partner in order to render a judgment non-dischargeable.

The United States Court of Appeals for the Sixth Circuit Court recently affirmed a Bankruptcy Appellate Panel that held that a bank which loaned an individual the funds to buy a motor vehicle could not overcome the avoidance of its lien as a preferential transfer after the person filed for bankruptcy. The Court so found because the lien at issue was not perfected under Kentucky law within the time frame necessary to be considered an exception to the avoidance of preferential transfers under the Bankruptcy Code.

Deutsche Bank held an under-secured home mortgage from a Chapter 13 debtor. The debtor was in arrears, but wanted to retain possession and control of her home. Thus, in her Chapter 13 plan, the debtor proposed to cure the arrearage, as required by 11 U.S.C. § 1322(e). The problem, however, was that the parties could not agree on the arrearage amount.

Recently, there have been cases in several states presenting the issue whether funds in an “inherited IRA” are exempt assets.1 An Ohio Bankruptcy Court has now ruled in favor of granting exempt status.

The Indiana Court of Appeals ruled on an issue of first impression inGreen Tree Servicing, LLC v. Brough, 930 N.E.2d 1238 (Ind. Ct. App. 2010) that arbitration provisions in consumer loan agreements survive discharge in the borrower’s bankruptcy proceeding.

Introduction

On July 26, 2010, the Indiana Court of Appeals, in the published decision of Green Tree Servicing, LLC., v. Brian D. Brough, No. 88A01-0911-CV-550, addressed the issue raised by Appellant Green Tree as to whether the trial court erred by vacating its prior Order directing the parties to arbitrate their dispute, which involved a prior bankruptcy filing and a claim under the Fair Credit Reporting Act.

Chapter 7 Trustees can and sometimes do successfully avoid creditor’s perfected liens. Typically, the avoidance opportunity arises because the lien was not perfected on a timely basis. The Bankruptcy Code provides that the avoided liens may be “preserved” for the benefit of the bankruptcy estate; this prevents a windfall to a junior lienor who would become the first lienholder courtesy of the Trustee’s success.

On 24 November 2009, ASIC released Consultation Paper 124 which provides guidance for directors on their duty to prevent insolvent trading which is imposed by section 588G of the Corporations Act 2001.

The economic climate over the past two years has seen a growing number of corporate insolvencies. There is also evidence that directors, and particularly directors of small to medium size enterprises, do not fully understand their duty to prevent insolvent trading.