Two-years prospective relief from the automatic bankruptcy stay is a remedy granted for serial bankruptcy filings, under § 362(d)(4)(B), in In re Karpuleon, Case No. 24-80647 in Central Illinois Bankruptcy Court (entered 12/6/2024; Doc. 48).

Facts

Here’s what happened.

Debtor files a Chapter 13 petition on August 22, 2024—this is Debtor’s fourth such petition in the past four years.

The opinion is Samson v. The LCF Group, Inc. (In re Bridger Steele, Inc.), Adv. No. 2:24-ap-2003 in the Montana Bankruptcy Court (decided September 30, 2024; Doc. 10).

Background

Debtor is a fabricator and seller of metal roofing and siding products.

Section 216 Insolvency Act 1986 provides that a person who has been a director of a company at any time in the 12 months before it goes into insolvent liquidation is prohibited for five years from being a director of, or directly or indirectly being concerned in or taking part in, the promotion, formation or management of a company with the same or similar name to the liquidated company (a “prohibited name”). Section 217 imposes personal liability on a director for debts incurred by a company which acts in breach of s 216.

The common law of assignments for benefit of creditors (“ABC”) has been around for centuries.

ABC is a business debtor’s voluntary liquidation tool—typically utilized in cooperation with a major secured creditor.

Historically, ABCs are attractive to debtors and creditors alike as an efficient, mostly out-of-court tool for maximizing the liquidation value of a business—for the benefit of creditors.

Does a Chapter 7 debtor have appellate standing to protect the homestead exemption?

That’s an issue addressed (sort of) in Karamoussayan v Massachusetts Department of Revenue (In re Karamoussayan), Case No. 22-041, First Circuit Bankruptcy Appellate Panel (decided April 11, 2024).

Chronology

Here’s a chronology.

September 9, 2022 — Debtor files a voluntary Chapter 13 petition

A new Seventh Circuit Court of Appeals opinion[fn. 1] involves the motion of a federal inmate, who was also a Chapter 7 bankruptcy debtor, for compassionate-release under 18 U.S. § 3582(c)(1)(A). The new Seventh Circuit opinion denies the motion.

Notably, the bankruptcy Debtor/Inmate is serving a 30-year sentence for making false statements during a bankruptcy proceeding The bankruptcy statute is 18 U.S.C. § 152, which declares it is a crime when a person:

Question: What happens when a Chapter 7 debtor:

• fails to disclose the existence of claims against third parties;
• receives a Chapter 7 discharge and a closing of the Chapter 7 case;
• then, pursues the undisclosed claims by filing a lawsuit against the third parties; and
• the defendants in that lawsuit move to dismiss debtor’s claim for non-disclosure in the Chapter 7 bankruptcy?

That actually happened—and a U.S. District Court refused to dismiss the debtor’s lawsuit on summary judgment:

I’m serving on a Drafting Committee of the Uniform Law Commission for a uniform law on assignment for benefit of creditors (“ABC”). A draft of such a uniform law is coming together, with lots of input from many people and organizations. But we are always looking for more input. So, if you’d like to participate in the drafting process, let me know.

I’m serving on a Drafting Committee of the Uniform Law Commission for a uniform law on assignment for benefit of creditors (“ABC”). A draft of such a uniform law is coming together, with lots of input from many people and organizations. And we are always looking for more input!

“A discharge under section 727, 1141, 1192 [Subchapter V], 1228(a), 1228(b), or 1328(b) of this title does not dischargean individual debtor from any debt— . . .”

11 U.S.C. § 523(a) (emphasis added).

Bankruptcy courts applying the foregoing language in the early days of Subchapter V found such language to be clear and unambiguous: that only “an individual debtor” is affected.