On June 4, 2018, the U.S. Supreme Court issued its opinion in Lamar Archer & Cofrin LLP v. Appling,[1] resolving a circuit split on the issue of whether a debtor’s statement about a single asset constitutes “a statement respecting the debtor’s financial condition” for the purposes of 11 U.S.C. § 523(a)(2).

Alerts and Updates

The Supreme Court’s opinion is significant because it will encourage creditors to rely on written, rather than oral, statements of debtors as to both their assets and overall financial status, which are better evidence in a nondischargeability case.

In a recent decision out of the U.S. Bankruptcy Court for the Western District of Virginia, a court analyzed the effect of a setoff effectuated between two governmental units in the 90 days prior to the filing of a husband and wife’s bankruptcy case. In Hurt v. U.S. Department of Housing and Urban Development (In re Hurt), 579 B.R. 765 (Bankr. W.D. Va. 2017), the court addressed competing motions for summary judgment filed by the debtors, on the one hand, and the U.S.

In Bakery and Confectionery Union Fund v. Just Born II, Inc., the 4th U.S. Circuit Court of Appeals on April 26, 2018, affirmed the district court’s judgment requiring Just Born to pay delinquent contributions into the Bakery and Confectionery Union and Industry International Pension Fund (the Pension Fund), as well as interest, statutory damages and attorneys’ fees.

The Court of Appeals for the Ninth Circuit revived a chapter 13 debtor’s bankruptcy case holding that the bankruptcy court below made no specific finding that the debtor violated the Controlled Substance Act (“CSA”) to support dismissal of the case.

Courts agree that bankruptcy trustees control bankrupt corporations' privilege – just as corporations' successor management controls privilege protection. But does the same approach apply in an individual's bankruptcy setting?

In one of the first decisions issued this year by the United States Court of Appeals for the First Circuit, the court addressed an issue of first impression. In Mission Products Holdings, Inc. v. Tempnology, LLC, n/k/a Old Cold LLC, No. 16-9016 (1st Cir. Jan. 12, 2018), the First Circuit held that the omission of trademarks from the definition of “intellectual property” in Section 101(35A) of the Bankruptcy Code, as incorporated by Section 365(n), leaves a trademark licensee with nothing more than a claim for damages upon the rejection of its license under Section 365(a).

In October 2017, the 2nd U.S. Circuit Court of Appeals, in In re MPM Silicones (Momentive) LLC, held that a non-consenting class of creditors is entitled to receive post-confirmation interest at a market rate if an efficient market exists to determine such a rate. In reaching its decision, the 2nd Circuit overruled prior decisions by the Bankruptcy Court and the District Court, which had held that the applicable rate of interest should be determined using the formula method adopted by the Supreme Court in Till v. SCS Credit Corp., 541 U.S.

On June 8, 2017, Clifford J. White III, director of the U.S. Trustee Program(“UST Program”)[1], proclaimed before a congressional subcommittee that “debtors with assets or income derived from marijuana may not proceed through the bankruptcy system.”

This decision is significant to debt collectors and debt buyers who, according to the dissent, “have ‘deluge[d]’ the bankruptcy courts with claims ‘on debts deemed unenforceable under state statutes of limitations.’”