On January 23, the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of the class action complaint filed by plaintiff Muhammad M. Butt against FD Holdings, LLC d/b/a Factual Data in the case styled, Butt v. FD Holdings, LLC, d/b/a Factual Data. A copy of the Court’s opinion can be found here.

A New York bankruptcy court recently allowed a pro se debtor to discharge over $200,000 in student loan debt, vehemently rejecting as “punitive” more recent legal authority concerning how student loan debts may be discharged in bankruptcy.

On December 17, the United States Bankruptcy Court for the District of Delaware approved a settlement between Starion Energy Inc. and the Commonwealth of Massachusetts in which Starion agreed to pay up to $10 million to resolve claims that it engaged in deceptive business practices and violated state telemarketing laws.

Starion is a retail provider of electricity and natural gas that offers service to residential and commercial customers in states where energy deregulation permits customers to choose their supplier.

Creditors and debt collectors are often held to high standards when it comes to consumer protection laws. On December 17, however, the United States Bankruptcy Court for the Northern District of Illinois issued a Memorandum Opinion in In re: Charles V. Cook, Sr., No. 1:14-bk-36424, evincing that debtors’ counsel can be subject to similarly high standards when appropriate.

On December 12, 2019, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) issued an opinion affirming in part and reversing in part a bankruptcy court’s assertion of exclusive and unlimited jurisdiction over certain of FirstEnergy Solutions’ (“FES”) power purchase agreements that FERC had previously approved under the Federal Power Act (“FPA”) and that FES sought to reject in bankruptcy.

In the recent decision of Boensch as Trustee of the Boensch Trust v Scott Darren Pascoe [2019] HCA 49, the High Court has clarified whether property held by a bankrupt on trust for another vests in the bankrupt's trustee in bankruptcy, and the circumstances in which a trustee in bankruptcy will have reasonable cause to lodge a caveat to protect an interest in the trust property.

Background

In the recent decision of In the matter of Parkway One Pty Limited (in liquidation) [2019] NSWSC 1495 (Parkway), Rees J dismissed an application to terminate the winding up of Parkway One Pty Ltd (in liquidation) (the Company) due to inconclusive evidence as to the solvency of the Company and, having regard to the non-compliance by its director of her statutory duties and the likelihood of the Company not being able to service the current and foreseen indebtedness, her Honour held that it would be contrary to commercial morality to terminate the wi

In a recent decision, the Federal Court of Australia declined to annul a bankruptcy in circumstances where the bankrupt claimed the proceedings should have been adjourned given his incarceration and solvency at the time the order was made: Mehajer v Weston in his Capacity as Trustee of the Bankrupt Estate of Salim Mehajer [2019] FCA 1713. The judgment is useful in reiterating what factors the Court will consider when deciding whether to order an annulment under section 153B(1) of the Bankruptcy Act 1966 (Cth) (the Act).

Generally, once a company enters into liquidation, litigation against that company cannot be commenced or be continued without the leave of the Court (Corporations Act 2001, s 471B). However, occasionally a liquidator may cause a company to commence or defend litigation after the commencement of the winding up. What happens if the company in liquidation is unsuccessful in that litigation and is subject to an adverse cost order? How will such an adverse cost order rank amongst other competing creditors?

Getting to the top

The Federal Court of Australia recently struck off an insolvency practitioner from the register of liquidators and restrained him for ten years for acting as an insolvency practitioner. The case concerns the conduct of David Iannuzi, who the Court found had "repeatedly fell short of the standards that would ordinarily be expected of him as a competent registered liquidator". The judgment sets out in detail the conduct that the Court found to be unsatisfactory and serves as a reminder of the standards expected of liquidators.

Background