Seyfarth Synopsis: Democrats now control both houses of the New York Legislature as well as the Governor’s office. Among the host of expected legislation, the anticipated passage of the Child Victim Act (“CVA”) is likely to have a significant impact on many of New York’s institutions. Educational, religious or other civic organizations that care for children should begin taking the appropriate steps to best prepare for the inevitable impact of this Act.

What is the Child Victim Act?

Democrats now control both houses of the New York Legislature as well as the Governor’s office. A host of legislation may be in the offing. One expected piece of legislation will be passage of the Child Victim Act (CVA).

Background

Seyfarth Synopsis: The government’s anti-discrimination watchdog can be extremely aggressive in pursuing discrimination claims, including pursuing those claims after an employer files for bankruptcy. Normally, after a bankruptcy petition is filed, the Bankruptcy Code’s automatic stay enjoins other actions against the debtor. But in EEOC v. Tim Shepard M.D., PA d/b/a Shepherd Healthcare, 17-CV-02569 (N.D. Tex. Oct. 11, 2018), the U.S.

A recent Federal Court decision puts administrators on notice that they must carefully consider the consequences of dealing with other people’s assets.

The decision of Justice Perram in White, in the matter of Mossgreen Pty Ltd (Administrators Appointed) [2018] FCA 471, highlights the care that administrators must take when administering property outside the scope of their authority.

In Mossgreen, administrators were appointed to a company that conducted a business that ran an auction house and gallery.

In a noteworthy decision, the Bankruptcy Appellate Panel for the Ninth Circuit overturned a dismissal of a bankruptcy case, which the lower court had dismissed based on its belief that the landlord debtor was receiving rental income from a marijuana dispensary. The decision is significant because it holds that a bankruptcy cannot be dismissed simply because of the mere presence of a marijuana business or related proceeds in the case.

Is your guaranty restricted or continuing? A continuing guaranty gives rise to divisible individual transactions, while a restricted guaranty—one that concerns a contemplated and specified extension of credit—arises upon execution of the guaranty. In bankruptcy, as in life, timing is everything. A debtor’s liability under a prepetition guaranty agreement for a post-petition advance of credit may depend on the distinction between restricted and continuing, and the distinction may be subtle.

The Victorian Court of Appeal decides that the Corporations Act priority regime does apply to trading trusts.

The law is now clear. Or is it?

For the last two years and six days, insolvency practitioners and other stakeholders involved in the liquidation of trading trusts have been frustrated by what should be a very straightforward question.

If the company in liquidation carries on business through a trust structure, as many do, what is the order of priorities that the liquidator must apply when making distributions to creditors?

Sixth Circuit Determines that an Absolute Assignment of Rents Perfected Under Michigan State Law Takes Property out of a Bankruptcy Estate (In Re Town Center Flats, LLC, Case No. 16-1812 — Decided May 2, 2017)

It is common practice for company contracts to contain clauses, known as “ipso facto” clauses, which terminate or amend the contract (e.g. by accelerating payments) merely because a company has entered into a formal insolvency process.

On March 30, the Third Circuit Court of Appeals filed an opinion regarding whether the filing of a mechanic’s lien after the commencement of a bankruptcy case violates the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, you should be aware of the Third Circuit’s ruling.