It’s time for a uniform law on the subject of assignment for benefit of creditors.

Description

Assignment for benefit of creditors laws are commonly known by the acrostic “ABC Laws”–for obvious reasons.

Such laws are a tool for owners of a distressed business in shutting the business down.

Here’s what happens in an ABC: debtor’s assets are transferred to an assignee, who then liquidates those assets and distributes proceeds to creditors.

Various Tools

The sun has set. Yes it has.

The $7,500,000 eligibility limit for Subchapter V expired yesterday (March 28, 2022), without action by Congress to extend it.

Actually, the Subchapter V sun was set to set on March 27—but that’s a Sunday. So let’s give the benefit of the doubt and say it expired on Monday, instead.

Either way, the heightened debt limit is gone.

Hopefully, Congress can pass the heightened limit anew, after its expiration. Then, perhaps, we can be in a no-harm, no-foul mode, with no ill-effects to anyone. But that remains to be seen.

Here’s a vindication for the Small Business Administration’s discrimination against bankruptcy debtors:

How much precedential value does an 1885 opinion of the U.S. Supreme Court deserve on a bankruptcy discharge issue?

That’s a central question in the Petition for a Writ of Certiorari before the U.S. Supreme Court in Bartenwerfer v. Buckly, Case No. 21-908 (“Distributed for Conference of 4/29/2022”).

Facts of the Case [Fn. 1]

A Petition for certiorari is before the U.S. Supreme Court in Speech & Language Center, LLC, and Chryssoula Marinos-Arsenis v. Horizon Blue Cross Blue Shield of New Jersey

Petition’s Question

The Question presented in the Petition is this:

In a few months, Justice Stephen G. Breyer is set to retire from the U.S. Supreme Court.

The bankruptcy world will miss him.

The reason for discussing this subject now (instead of waiting for the retirement to actually happen) is this:

• The triumph of Justice Breyer’s Footnote 2 in Merit Management, as accomplished by a denial of certiorari on 2/22/2022.

What follows is a summary of four important Supreme Court bankruptcy opinions in which Justice Breyer played a significant role—starting with the Footnote 2 opinion.

Claims are “impaired,” unless the plan “leaves” their rights “unaltered.”§ 1124(1).

This rule is not as simple and unequivocal as it seems, according to an In re Hertz opinion. [Fn. 1] Here’s why.

Plan Treatment of Unsecured Claims

Claims of unsecured creditors in the Hertz bankruptcy are treated, under its Chapter 11 Plan, as follows:

Imagine this: a U.S. District Court enters judgment in a case that’s “related to” a bankruptcy, and we want to file a motion for new trial or to amend the judgment.

So, which deadline applies to the motion:

Lots of things are wrong with the student loan program in these United States. For example:

• It’s a corporate-welfare program for high-price colleges; but
• Their students pay the price.

Unfortunately, the safety valve protection for students (i.e., a bankruptcy discharge) has failed them—and made the problem worse!

Here’s how

The opinion is Wells Fargo Bank, Indenture Trustee v. The Hertz Corp. (In re The Hertz Corp)

The question is whether (and at what rate) post-petition interest can be recovered on pre-petition unsecured claims, when debtor is solvent, under the “solvent debtor exception.” The answers pit equitable arguments against statutory provisions and even looks back to caselaw under the Bankruptcy Act of 1898.