The U.S. Court of Appeals for the Ninth Circuit recently held that bankruptcy courts could confirm Chapter 13 plans proposing estimated time periods to complete the plan if unsecured creditors and the trustee did not object, reversing a contrary ruling from its Bankruptcy Appellate Panel.
A copy of the opinion in In re Nanette Sisk is available at: Link to Opinion.
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently held managing members of a limited liability company that filed a Chapter 11 bankruptcy were equitably estopped from asserting ownership of equipment where the members previously verified documents in the bankruptcy showing ownership of the equipment by the company.
A copy of the opinion in Richards v. Rabo ArgiFinance, LLC is available at: Link to Opinion.
The U.S. Court of Appeals for the Seventh Circuit recently held that absent unforeseen extraordinary circumstances, debtors in Chapter 13 cases cannot proceed on appeal in forma pauperis.
A copy of the opinion in Bastanipour v. Wells Fargo Bank, N.A. is available at: Link to Opinion.
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently reversed a bankruptcy court’s disallowance of postpetition interest at the default contract rate, holding that “the bankruptcy court erred in applying a liquidated damages analysis and ruling the default interest rate was an unenforceable penalty,” and also erred in weighing “equitable considerations” to avoid enforcing the contractual default interest rate.
As part of its COVID-19 economic response package, the Federal Government recently introduced a temporary ‘safe harbour’ for directors from personal liability for a company’s insolvent trading, which will apply for a period of six months from 25 March 2020.
The U.S. Court of Appeals for the Eighth Circuit recently affirmed the denial of bankruptcy discharge for a Chapter 7 debtor due to the debtor’s failure to keep adequate records.
In particular, the Eighth Circuit focused on a sudden and financially significant return of hundreds of thousands of dollars’ worth of high-end watches and jewelry that left significant unanswered questions as to the whereabouts of the assets and the legitimacy of the creditor jeweler’s claim.
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.
If ever there were times challenging enough for boards to be considering the financial lifeline that is safe harbour from insolvent trading, these are they.
On a daily basis we are reading news of businesses having to shut down and lay off employees and seeing footage of lengthy Centrelink queues. Boards are working harder than ever to govern their organisations in incredibly uncertain times.
As part of the its efforts to stem the effects of the COVID-19 pandemic on the Australian economy, the Federal Government has recently introduced a number of ‘safety net’ provisions designed to avoid financially distressed individuals and companies being forced into, respectively, bankruptcy and liquidation.
The objective is to allow them to continue trading where possible.
The reforms
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.