The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently affirmed a bankruptcy court’s holding that the contemporaneous exchange for new value defense to a preference action under § 547(c) applied to a creditor bank that released its liens for less than full payment.

In so ruling, the Eighth Circuit BAP held that the bankruptcy trustee could not recover two of the three payments that the debtor made to the bank during the 90-day pre-petition preference period.

The Government has announced they will be relaxing the law for companies undergoing a rescue or restructure process, giving them breathing space that could help avoid insolvency. 

The U.S. Court of Appeals for the Ninth Circuit recently rejected a loan servicer’s appeal from a Bankruptcy Appellate Panel’s ruling to remand to the lower bankruptcy court a punitive damages award for alleged discharge violations.

In so ruling, the Court held that it lacked appellate jurisdiction regarding the Bankruptcy Appellate Panel’s ruling as to the punitive damages award, but affirmed the Bankruptcy Appellate Panel’s denial of the debtors’ motion for appellate attorney’s fees.

Entrepreneurs’ Relief – review and reform

Entrepreneurs that sell their businesses have been able to take advantage of Entrepreneurs’ Relief since 2008. It currently allows individuals to pay only 10% Capital Gains Tax on all gains on the sale of qualifying assets up to a lifetime allowance of £10m.

The Conservative Manifesto said that ER would be subject to “review and reform”. There is increasing speculation that changes will be introduced at the Budget in March.

The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently held that a debtor alleged a plausible claim against a mortgage loan servicer under the federal Fair Debt Collection Practices Act (FDCPA) based on the servicer’s proof of claim filed after obtaining a foreclosure judgment.

The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a consumer’s Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction, holding that the claim was barred by the jurisdiction-stripping provision of the federal Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

A copy of the opinion in Shaw v. Bank of America is available at: Link to Opinion.

The U.S. Court of Appeals for the Fifth Circuit recently reversed the denial of a lender’s motion to compel arbitration in an adversary bankruptcy proceeding for allegedly violating the federal Truth in Lending Act (TILA), holding that — despite conflicting clauses in two different relevant agreements — the parties had entered into a valid arbitration agreement that delegated the threshold issue of arbitrability to the arbitrator.

Over the past year, bankruptcy filings have increased. We are projecting 768,000 filings by the end of the 2019 year — 61% of the filings as chapter 7, 37% as chapter 13, and 2% as chapter 11 and 12 filings. This is a 2% increase from the prior year. Commercial filings are at 5,542 filings compared to 5,108 in 2018.

Increased Filings in Commercial Sector, Especially Retail, Medical and Transportation

The Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Sixth Circuit recently reversed a lower bankruptcy court’s ruling that rejected an objection to the confirmation of debtors’ chapter 13 plan asserted by the holder of a claim relating to vehicle financing incurred within 910 days of the bankruptcy petition (a “910 claim”).

The U.S. Court of Appeals for the Fifth Circuit recently affirmed judgment against a borrower for quiet title claims brought against the owner and servicer of her mortgage loan, and entered judgment of foreclosure in the loan owner and servicer’s favor on their counterclaims for foreclosure against the borrower.