Good news for colleges: Connecticut may be on the leading edge of a trend to bar bankruptcy trustees from pursuing colleges when parents default on their “Parent PLUS” loans.

When a parent signs a “Parent PLUS” loan to help her child pay for college and she later finds herself in bankruptcy, bankruptcy trustees often sue the child’s college to recover loan disbursements as a fraudulent transfer. Over the last several years, the law has allowed such claims.

The First Circuit recently issued an important interpretation of bankruptcy law that directly impacts trademark licensing rights. In In re Tempnology LLC, 559 B.R. 809 (1st Cir. BAP 2016), the First Circuit Bankruptcy Appellate Panel held that a debtor-licensor’s rejection of a trademark licensing agreement “did not vaporize” the licensee’s contractual right to use the debtor’s mark and logo.

Bankruptcy courts have jurisdiction over "core" and "non-core" proceedings. See 28 U.S.C. § 157. In "core" proceedings, bankruptcy courts can enter final judgments. See 28 U.S.C. § 157(b). In "non-core" proceedings, however, bankruptcy courts must make findings of fact and conclusions of law and send their rulings to the district court for de novo review. See 28 U.S.C. § 157(c). 

Bankruptcy Court Holds Attorney's Signature on Proof of Claim Form Renders Attorney a Fact Witness to Allegations in Proof of Claim, Waiving Attorney-Client and Work-Product Privileges

The Seventh Circuit Court of Appeals recently held that a lender is obligated to conduct a diligent investigation when it becomes aware of suspicious facts relating to the legitimacy of a loan transaction. In Sentinel Management Group, Inc., 2016 WL 98601 (7th Cir. January 8, 2016), the Seventh Circuit found that a bank officer’s puzzlement was enough to place the bank on inquiry notice, which required the bank to investigate the collateral the borrower was using to secure the loan.