Can the contempt remedy for a creditor’s violations of the discharge injunction in multiple bankruptcy cases throughout the land be imposed in a class action lawsuit?
In its recent German Pellets decision, the Fifth Circuit held that a creditor could not assert its indemnification defenses in a suit brought by the trustee of a liquidation trust because the Chapter 11 plan’s express language permanently enjoined the defenses and the creditor chose not to participate in the debtor’s bankruptcy despite having actual knowledge of it.
Here’s a due process question that’s percolating before the U.S. Supreme Court and a related mediation issue:
A helpful analysis of statute of limitations issues for fraudulent transfer claims brought by a bankruptcy trustee under § 544(a)&(b) is provided in a recent Circuit opinion.
- The opinion is Lewis v. Takacs (In re Stone Pine Investment Banking, LLC), Case No. 21-1423, U.S. Tenth Circuit Court of Appeals (decided 12/19/2023).
Overview
You can’t make this stuff up. The legal issues are pedestrian. But the facts behind those issues are incredible!
Litigation History
Here’s the boring stuff first.
On January 8, 2024, the U.S. Supreme Court denies certiorari in Mann v. LSQ Funding Group, L.C. (Case No. 23-425). Here’s the procedural background:
Oral arguments happened on January 9, 2024, at the U.S. Supreme Court in U.S.Trustee v. Hammons.Here is a link to the transcript of those arguments.
The Hammons question is this:
2023 is the year that the need for a uniform state law on assignments for benefit of creditors became obvious.
And a Drafting Committee at the Uniform Law Commission began working in 2023 to create such a law.
Here are some of the reasons why the need became obvious.
Background and Purpose
2023 has been a good year for developing the law of Subchapter V through court rulings and opinions. Here are some of the highs and lows of that development.
Working as Intended
If 2023 shows us anything, it’s this: Subchapter V is working as intended.
Subchapter V has developed into the efficient and effective tool for business reorganization it was intended to be. That’s true, whether the reorganization is in the form of continued operations or liquidation. Such a tool did not exist before Subchapter V.
In 2022, the U.S. Supreme Court issues its unanimous Siegel v. Fitzgerald opinion. The question in that opinion is:
Here’s my biggest bankruptcy shocker from 2023:
- the Third Circuit’s rationale for dismissing Johnson & Johnson’s bankruptcy.
I’ll try to explain.
Appalled
I’m still appalled by the lack of concern, from the Third Circuit Court of Appeals in its dismissal opinion, over these disparities it describes in results for similarly situated claimants: