Preference actions are, for the most part, insanity. We won’t go on a tirade here. But recently, a ruling brings common sense to the “new value” defense.
Until recently, In re Atari, Inc. was a closed case, but, in a recent decision, the bankruptcy court for the Southern District of New York found that “other cause” existed to reopen the bankruptcy cases.
Background
On April 26, the CFPB published a proposed rule regarding potential amendments to certain mortgage servicing provisions in RESPA (Regulation X) and TILA (Regulation Z).
On February 5, 2016 the IRS released Chief Counsel Advice Memorandum Number 201606027 (the IRS Memo) concluding that “bad boy guarantees” may cause nonrecourse financing to become, for tax purposes, the sole recourse debt of the guarantor. This can dramatically affect the tax basis and at-risk investment of the borrowing entity’s partners or members. Non-recourse liability generally increases the tax basis and at-risk investment of all parties but recourse liability increases only that of the guarantor.
The Consumer Financial Protection Bureau (CFPB) recently reopened the comment period for its proposed amendments to the mortgage servicing related rules under RESPA and TILA that generally would require servicers to provide modified periodic statements to consumers who have filed for bankruptcy.
Funds passing through a correspondent bank account in New York can create personal jurisdiction over the funds’ recipient, ruled the United States District Court for the Southern District of New York. In Official Committee of Unsecured Creditors of Arcapita Bank B.S.C. v.
You just got your committee approvals for a new relation. It is a borrower you have been after for some time. Approvals are fairly standard and call for a secured credit facility with a priority all business asset lien.
The borrower is moving nearly all of its accounts to your bank for cash management too. But the borrower claims he needs to keep one account at a mutual since he is holding his breath that there will be demutualization and he will hit it big with stock redemption. You do not have the heart to crush his retirement dreams so you let him keep that other account.
(7th Cir. Apr. 14, 2016)
The Seventh Circuit applies Wisconsin state law and holds that a mortgage can attach a lien to a vendor’s interest in a real estate contract and that the lender perfected the lien by recording in the county land records rather than filing a UCC-1 financing statement. The trustee is unable to avoid the lien. Opinion below.
Judge: Hamilton
Attorneys for Trustee: Michael F. Dubis, Christopher R. Schultz
Attorneys for Appellees: Ruffi Law Offices, Sara Lynn Ruffi, Lund Law Office, Brad M. Lund
IRS Clarifies That a Typical “Bad Boy Guarantee” Will Not Cause an Otherwise Nonrecourse Financing to Be Treated as Recourse
On April 15, 2016, the IRS released a generic legal advice memorandum (the “GLAM”)1 providing an important and helpful clarification of the treatment of a guarantee of a partnership nonrecourse liability when the guarantee is conditioned on certain typical “nonrecourse carve-out” events (commonly referred to as “bad boy guarantees”).
In our previous update concerning OW Bunker litigation in the United States, we discussed orders issued by the United States District Court for the Eastern District of Louisiana in which the court held that a physical supplier of bunkers did not have an enforceable maritime lien against a vessel. Valero Marketing and Supply Co. v. M/V ALMI SUN, No. 14 Civ. 2712 (NJB) (E.D. La. decided Dec. 28, 2015 and Feb.