The U.S. Court of Appeals for the Eleventh Circuit recently ruled that a debtor’s appeal of a sale order was statutorily mooted by Subsection 363(m) of the Bankruptcy Code.

In so ruling, the Eleventh Circuit held that: (1) while the Bankruptcy Code bars relief for an appeal pursuant to 11 U.S.C. § 363(m), it does not defeat jurisdiction; and (2) Subsection 363(m) applies to appeals from any sale authorized by the bankruptcy court, not just those properly authorized by the Bankruptcy Code.

Alex Jay, Head of Insolvency and Asset Recovery, discusses how companies can protect themselves from rising insolvency risks as businesses begin to emerge from the pandemic and commercial pressure increases.

Insolvency risk can affect businesses and individuals in a number of ways.  Markets can turn rapidly – think for example of the recent spate of energy company failures – and can catch you off guard.

22 October 2021 sees the return of winding-up petitions without heavy restrictions. It marks the first day in 18 months that a creditor could present a winding-up petition without having to consider the financial implications of Covid-19 on the company.

A recent High Court judgment has provided some clarity on issues arising from the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the Regulations 2020”). Partner Alex Jay and Senior Paralegal Aarti Chadda examine the judgment and its interpretation of the Regulations 2020.

The U.S. Court of Appeals for the Third Circuit recently affirmed lower court rulings that a bankrupt debtor was entitled to receive damages and attorneys’ fees for a creditor’s violation of the automatic stay in bankruptcy.

In so ruling, the Court held that:

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit vacated the bankruptcy court’s order confirming a farm debtor’s chapter 12 plan, concluding that the bankruptcy court erred by failing to hold an evidentiary hearing to determine the value of a bank’s collateral where the collateral was disputed. The Panel also concluded that the bank needed to file a proof of claim.

The U.S. Court of Appeals for the Ninth Circuit recently reversed a trial court’s order granting summary judgment in favor of the buyer at a homeowners association’s non-judicial foreclosure sale that was conducted in violation of the automatic stay in the borrower’s bankruptcy, and against a mortgagee whose interest in the foreclosed property would have been extinguished.

In so ruling, the Ninth Circuit held that a first deed of trust lienholder may set aside a completed super-priority lien foreclosure sale if the sale violates the bankruptcy automatic stay.

Investor frauds never go away

Non-professional investors are often enticed by promises of high returns to place money into schemes that turn out to be scams. These schemes adopt many guises and forms. But do they ever change, and how likely are they to emerge as the expected post-Covid economic uncertainty takes effect? Head of Insolvency and Asset Recovery Alex Jay examines investor fraud and how the insolvency process can help victims recover some of their money.

Increases in fraud and insolvency predicted

The last year and a half was a time to be remembered in bankruptcy law. It started with an eye on increasing the ability of small businesses to utilize the Chapter 11 process in a more efficient and less expensive way, which led to a record number of commercial filings, a reduction in consumer filings, and a test of the bankruptcy system. What will the second half of 2021 look like?

The U.S. Court of Appeals for the Sixth Circuit recently held that 11 U.S.C. § 1307(b) requires a bankruptcy court to dismiss a Chapter 13 bankruptcy petition upon a debtor’s request, even if the debtor filed his or her petition in bad faith.

A copy of the opinion in In re Ronald Smith is available at: Link to Opinion.