In the case of Domistyle, Inc., 14-41463 (5th Cir. Dec. 29, 2015), the United States Court of Appeal for the Fifth Circuit affirmed an order of the bankruptcy court requiring a secured creditor to reimburse the trustee for expenses paid to preserve real property subject to the creditor’s lien until the debtor’s eventual surrender of the property to the creditor.

The language of Bankruptcy Code § 501(a) is as broad as it is simple.

Key Points:

Complex cross-border issues can be dealt with relatively easily under the Cross-Border Insolvency Act as long as flexibility is built into the relevant orders.

Key Points:

You can lead a director to the safe harbour, but you can't make him drink.

The Government's new approach to insolvency is long on rhetoric about risk taking and the need to remove the stigma of business failure.

However, it is short on detailed consideration of exactly why we have legal rules for corporate and personal insolvency.

Those rules aim to balance the interests of creditors against the need to encourage business start-ups.

The Australian Government has accepted certain recommendations of the Productivity Commission's long-awaited Report on Business Set-up, Transfer and Closure, in an attempt to change the focus of Australia's insolvency laws from "penalising and stigmatising business failure”, according to the Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP.

It has expressed a willingness to legislate to introduce at least two main changes:

Key Points:

It's unclear that safe harbours by themselves will provide genuine opportunities for restructuring distressed businesses.

The Productivity Commission's upcoming report on corporate insolvency will address two burning issues: ipso facto clauses and how to encourage directors to save financially-stressed companies.

On November 23, 2015, in the first appellate decision of its kind, the District Court for the Southern District of Florida affirmed a bankruptcy court order to compel chapter 7 debtors to surrender real property by directing the debtors to cease all foreclosure defense. The decision in Failla v. Citibank, N.A. (In re Failla), case no. 15-80328, marks the first decision from a federal appellate court to address the question of whether a bankruptcy court may enter an order directing a debtor to cease defending a mortgage foreclosure suit pending in state court.

Individuals filing for bankruptcy pursuant to Chapter 7 of Title 11 of the United States Code (the "Bankruptcy Code") generally do so to have their debts discharged and receive the proverbial "fresh start."2 The same, however, is not true for corporations.

In Jenkins v. Midland Credit Management, Inc.,^[1]the U.S. Bankruptcy Court for the Northern District of Alabama held that the filing of a proof of claim based on a time-barred debt cannot give rise to a claim for damages under the Fair Debt Collection Practices Act (“FDCPA”), reasoning that any such claim is precluded by the Bankruptcy Code’s comprehensive claims-allowance procedure.

There's been a drop-off, but Peter Bowden says things might be about to change.

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