In retail bankruptcies, it is important for suppliers consigning goods to merchants to be aware of the commercial law rules governing consignments. Disputes among consignors, inventory lenders, and bankruptcy debtors have been arising frequently in retail bankruptcy cases. Disputes like these can be avoided if consignors consider the basics of commercial law rules governing consignments, particularly under the Uniform Commercial Code, and take steps to protect their rights and interests.
On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code.
Background Facts
In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit (the “Court”) ruled that penalties assessed by the state of Michigan against two debtors, stemming from fraud associated with the wrongful receipt of Michigan unemployment benefits, are non-dischargeable in Chapter 13 bankruptcy pursuant to Bankruptcy Code § 523(a)(2).1
Background Facts
The Ag industry continues to face financial challenges. The potential of a bankruptcy notice remains ever present. Ignore a bankruptcy notice at your own peril.
Pay close attention to any mail involving a bankruptcy case – because every bankruptcy case in which the Debtor owes you or your institution money, or has property you or your institution may have an interest in, has the potential to affect your interests. Consider the following hypotheticals:
Many tax-exempt organizations can now change their state of organization and retain their current tax exemption.
By most measures the economy is strong. Unemployment is low. The stock market is roaring. Gross domestic product is rising. Under these circumstances, bankruptcy is on few people’s minds.
Corporate bankruptcy tends to be cyclical, and bankruptcy filings trend up and down along with the direction of the macro economy. The last big surge in corporate bankruptcy filings came in the wake of last decade’s financial crisis (and closer to home here in Michigan, the automotive crisis) and “Great Recession.”
The United States Bankruptcy Court for the Western District of Michigan recently issued an opinion in a case that involved mutual claims between the debtor and a creditor, and lifted the automatic stay to allow a creditor to exercise “setoff” rights provided by state law to recover its debt.1
The Background
On January 30, 2018, the Michigan House of Representatives passed House Bill 4471, which creates a Uniform Commercial Real Estate Receivership Act (the “Act”) in Michigan, by a vote of 101-7. The Michigan Senate previously approved the Act, and the proposed law now goes to Governor Snyder for his signature. House Bill 4471 can be viewed here.
The Background of the Bill
Filing for Chapter 13 bankruptcy as a consumer is a voluntary decision. Once a Chapter 13 case has been filed, it is also up to the debtors to dismiss the case if they so choose.
What happens if, after a Chapter 13 case has been filed and a plan confirmed, a debtor decides to dismiss the case but the Chapter 13 trustee is holding funds that would have otherwise been distributed to creditors?
Numerous changes to the Federal Rules of Bankruptcy Procedure (the “Rules”) take effect on December 1, 2017. The changes significantly impact the administration of consumer bankruptcy cases, and Chapter 13 cases in particular.
Some of the most significant changes to affect creditors, explained in more detail below, include: