In a recent case1 out of the bankruptcy court for the Southern District of Florida (the “Court”), a secured creditor moved to dismiss a debtor’s bankruptcy case “for cause” based on the debtor’s bad faith filing.2 The debtor owned certain commercial real estate in south Florida (the “Commercial Property”) and leased space to various tenants, one of which had recently applied for both state and federal licenses to sell medical marijuana.3 The secured creditor had a first-position mortgage on the Commercial Property.4 After a decade-long lending relationship soured, the debtor initiated a len

A recent decision in the High Court has seen an application for pre-action disclosure of an insurance policy dismissed because the defendant was not insolvent.

Peel Port Shareholder Finance Company owned a warehouse that was damaged by a fire caused by Dornoch. They argued that their claim was highly likely to win but that, if it did, it would cause Dornoch to become insolvent.

Peel Port therefore sought ‘pre-action disclosure’, meaning Dornoch would have to disclose applicable insurance cover information to Peel Port before they decided whether to proceed.

In a 5-3 decision written by Justice Stephen G.

In Midland Funding, LLC v. Johnson, the U.S. Supreme Court held that a debt collector does not run afoul of the FDCPA by filing a proof of claim in bankruptcy on a stale debt.

Recently, the Bankruptcy Court for the Northern District of Alabama joined with a number of courts in finding that a debtor's ability to sell their assets free and clear of any "interests" in property encompassed the right to purge the assets of a state labor department's right to transfer a company's unemployment experience rating to a purchaser of the company's assets.[1]

Section 523(a)(2) of the Bankruptcy Code is clear that a debtor can discharge a debt for money obtained by a false statement respecting the debtor's financial condition unless that statement is in writing. What has not been clear is whether a debtor's false oral statement regarding a single asset is a "statement respecting the debtor's financial condition" that falls within the ambit of 523(a)(2)(A). If so, debts obtained by such a false oral statement would be dischargeable. If not, then creditors could seek to have such fraudulently obtained debts excepted from discharge.

Lender's Security Interest in Funds Lost Upon Transfer to Debtor's Counsel

Imagine that while a bankruptcy case is pending, the debtor-in-possession or bankruptcy trustee files a state law claim against one of the estate's creditors. Presumably, if the debtor wins its state law claim, that recovery augments the bankruptcy estate and increases the amount available to pay the debtor's creditors.[1] The creditor, seeking to avoid litigating the action in the debtor's home state court, timely removes the lawsuit to federal court as permitted under 28 U.S.C.

In an order issued today, Judge Dalton of the Middle District of Florida held that in a non-bankruptcy context, allegations that collection of a mortgage debt is barred by the statute of limitations do not form a “plausible basis” for claims under the Fair Debt Collection Practices Act, the Florida Consumer Collection Practices Act, or the Declaratory Judgment Act.

On November 21, 2016, in a case entitled In re Monson,1 the Eleventh Circuit Court of Appeals affirmed the Bankruptcy Court's decision,2 which held that a debtor's conduct constituted a willful and malicious injury to a creditor within the meaning of 11 U.S.C. 523(a)(6), because the debtor injured the creditor's right to recover its loan, the injury was intended, and the debtor was conscious of his wrongdoing. Thus, the debt was nondischargeable under 523(a)(6).

Exceptions to the Dischargeability of Debt under Section 523 of the Bankruptcy Code