Would Handle Liquidation of Failing Financial Firms and Limit the Use of Orderly Liquidation Funds as Established in the Dodd-Frank Act

Prior to the United States Supreme Court’s decision in Czyewski v. Jevic Holding Corp., 137 S.Ct. 973, 197 L.Ed.2d 398 (2017), one way to reshuffle the deck chairs on the titanic in a case with too little money, no more assets and too many creditors was for the parties to divvy up the remains through a structured dismissal under Section 349 of the Bankruptcy Code.

On February 1, 2018, the US Bankruptcy Court for the Southern District of Georgia in In re: Kenneth R. Pierce found that the printed name on the debtor’s driver’s license was the name that was important for Uniform Commercial Code (UCC) security interest perfection purposes (No. 17–60154–EJC, 2018 WL 679677 (Bankr. S.D. Ga. Feb. 1, 2018)).   

On February 6, 2018, the District Court for the District of Montana refused a debtor’s request to change the venue of a post-petition “related to” police/regulatory action commenced by a federal agency in district court. The decision will have important implications on how “related to” litigation is treated for venue purposes—especially in the context of police and regulatory actions.

The Bankruptcy Appellate Panel of the Sixth Circuit recently held that the constructive notice provisions of section 1301.401 of the Ohio Revised Code do not limit a bankruptcy trustee’s avoidance powers as a hypothetical judgment lien creditor under section 544(a)(1) of the federal Bankruptcy Code.

A copy of the opinion is available at:  Link to Opinion.

In a decision approved for publication, New Jersey’s Appellate Division recently remanded an action to the Chancery Division in order to determine whether a lender improperly collected more than one-hundred percent of the debts owed to it. SeeBrunswick Bank & Tr. v. Heln Mgmt. LLC, 2018 WL 987809 (N.J. Super. Ct. App. Div. Feb. 21, 2018). In the case, the lender made five construction loans to two entities, which were guaranteed by the entities’ principal and his daughter.

February 25, 2018

Treasury Issues Report on Dodd-Frank Orderly Liquidation Authority

Treasury Issues Report Recommending Adoption of Reforms to Dodd-Frank Orderly Liquidation Authority and a New Chapter 14 of the Bankruptcy Code for Significantly Systemic Financial Companies

SUMMARY

On February 13, 2018, the Florida Supreme Court accepted jurisdiction in an appeal emanating from a hot button issue in contested foreclosures – can the borrower in a foreclosure secure an award of contractual attorney’s fees after successfully defending the foreclosure on the basis that the lender lacked standing to enforce the mortgage contract?

The Department of Education (the “Department”) has formally sought comment on the legal standards used to evaluate whether a borrower has established “undue hardship” to discharge his or her student loans in a bankruptcy proceeding. The Department published this request for information in the Federal Register last Wednesday and responses to the request for will be taken through May 22, 2018.

Reversing the rulings of both the appellate and the trial courts, the Supreme Court of the State of Illinois recently held that the deadline to file a motion to quash service under the Illinois Mortgage Foreclosure Law (IMFL) did not run while the foreclosure action was dismissed for want of prosecution.

A copy of the opinion is available at:  Link to Opinion.