On March 5, 2018, the Federal Maritime Commission voted to launch an investigation into the detention, demurrage, and per diem charges of vessel operating common carriers and marine terminal operators. The investigation will be headed by Commissioner Rebecca Dye, who will have broad authority to issue subpoenas, hold public and non-public inquiries, and require reports.
The key issues Commissioner Dye will investigate are:
When a defaulted borrower files a bankruptcy petition, two important events occur: (1) a bankruptcy “estate” comprised of certain assets of the debtor is created; and (2) all collection efforts (and pending litigation) against the debtor or its assets are automatically stayed. Accordingly, the court’s determination of whether items are or are not property of the debtor and of the bankruptcy estate is of critical importance to the creditor’s ability to collect on its debt.
SNDA Basics
A subordination, nondisturbance and attornment agreement (“SNDA”) is commonly used in real estate financing to clarify the rights and obligations between the owner of rental property (i.e., the borrower), the lender that provides financing secured by the property, and the tenant under a lease of the property in the event the lender forecloses or otherwise acquires title to the property. As suggested by its name, an SNDA has the following three primary components:
The United States Supreme Court (the “Court”) recently issued a long-awaited decision in Czyzewski v. Jevic Holding Corp. (“Jevic”), which limits the use of “structured dismissals” in Chapter 11 bankruptcy cases, requiring structured dismissals pursuant to which final distributions are made to comply with the Bankruptcy Code’s priority scheme, or the consent of all affected parties to be obtained.1
What is a Structured Dismissal?
The new Companies Ordinance (Cap 622) enacted in 2012 was the first part of the effort to rewrite the statutory provisions relating to the incorporation and operation of companies. The remaining task of updating the winding up and insolvency provisions was completed in May 2016, when amendments to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (CWUMPO) were passed into law. Although the implementation date of these amendments are to be announced by the government, it is time to look at the significant changes ahead.
The proposed bankruptcy sale of Golfsmith International Holdings to Dick’s Sporting Goods was recently approved, after the privacy ombudsman recommended that almost 10,000,000 consumer records (i.e., the personal information of consumers) of Golfsmith International Holdings can be transferred to Dick’s Sporting Goods.
On October 11, 2016, the United States Supreme Court granted certiorari in the matter of Johnson v. Midland Funding LLC, on appeal from the Eleventh Circuit Court of Appeals, in order to resolve whether a conflict exists between the Fair Debt Collection Practices Act (“FDCPA”) and the Bankruptcy Code. In Midland Funding, the appellate court found a debt collector to have violated the FDCPA by filing a proof of claim on time-barred debt in a Chapter 13 bankruptcy.
The Consumer Financial Protection Bureau has issued yet another suite of regulatory changes related to mortgage servicing. The rules add additional protections for borrowers—and therefore increased requirements for servicers—as well as clarify certain issues that have been the subject of questions and confusion by servicers.
Final Servicing Rule
Michigan Court Rule 2.622 (the “Receivership Rule”) governs the appointment of receivers. The Receivership Rule was amended in 2014 to provide more explicit guidance on what courts and attorneys should consider when nominating a receiver. Specifically, the 2014 amendments addressed concerns that trial courts were disregarding qualified nominations made by the parties to the litigation in favor of judicial discretion in appointing a disinterested party to maintain the receivership estate.
A Supreme Court ruling this week should give creditors a powerful tool to collect their debts from debtors who try to transfer assets before seeking bankruptcy protection. The primary reason an individual may turn to personal bankruptcy is to protect assets from creditor collection while obtaining a “discharge” from debts. Such protection is increasingly necessary where an individual is being pursued by one or more creditors, particularly where those creditors may have obtained (or are about to obtain) judgments against the individual.