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The opinion is In re Legarde, Case No. 22-12184, Eastern Pennsylvania Bankruptcy Court (issued September 14, 2023; Doc. 112).

Facts

Debtor claims Creditor raped her.

Then, Debtor posts stuff about Creditor on the internet.

So, Creditor sues Debtor for defamation, alleging willful and malicious conduct.

Bankruptcy Developments

courts agree that . . . evaluating, asserting, pursuing, and defending litigation claims . . . can satisfy Section 1182(1)(A)’s requirement of ‘commercial or business activities.’”

This isn’t going to end well.

Looks like our bankruptcy system in these United States is about to take a big hit—to the tune of hundreds of millions of dollars (projected to be around $350 million). And those responsible for creating the debacle are going to skate.

Here’s how.

U.S. Trustee v. John Q. Hammons

Here’s a Bankruptcy Court opinion addressing a no-discharge claim under § 1141(d)(3) against an individual debtor who proposes a liquidating Subchapter V plan:

  • RGW Construction, Inc. v. Lucido (In re Lucido), Adv. No. 21-4031, Northern California Bankruptcy Court (issued 9/13/2023, Doc. 113).

The Issue

In this week’s TGIF, we examine the recent case of Mandalinic v Stone (Liquidator) [2023] FCAFC 146 which provides useful guidance as to the ability of a director to challenge an insolvent company’s PAYG liability.

Key takeaways

In this week’s TGIF, we consider Morgan & Ors v McMillan Investment Holdings Pty Ltd & Anor [2023] HCATrans 122, a decision to grant special leave, paving the way for the High Court to clarify the law with respect to pooling orders.

Key takeaways

Question

Once a Subchapter V debtor is removed from possession under § 1185(a), what happens next?

The answer to this question seems to have evolved over the few years of Subchapter V’s existence:

  • from a low-power position for debtor, early-on;
  • to a high-power position for debtor, in a re-thought view; and
  • then back to the low-power position for debtor, when problems of the re-thought view become evident.

I’ll try to explain.

Early Answer

The equitable mootness doctrine is before the U.S. Supreme Court on a Petition for writ of certiorari. The case is U.S. Bank National Association v. Windstream Holdings, Inc.[Fn. 1]

All who’ve seen an effort to abuse equitable mootness, from a creditor’s view, will appreciate the following information from U.S. Bank’s Petition and from a supporting Amicus Brief of law professors in U.S. Bank v. Windstream.