The Bankruptcy Code provides certain protections to buyers of bankruptcy estate assets and to entities that extend credit or financing to a trustee or chapter 11 debtor-in-possession ("DIP"). However, these safe harbors are available only if a buyer or lender is deemed to have acted in "good faith," a concept that is not defined in the Bankruptcy Code.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments
Recent Developments
(6th Cir. B.A.P. Nov. 29, 2016)
(Bankr. W.D. Ky. Nov. 16, 2016)
(6th Cir. B.A.P. Sep. 30, 2016)
(Bankr. S.D. Ind. Sep. 14, 2017)
The bankruptcy court grants the university’s motion for summary judgment, determining that the student loan debt is nondischargeable. The debtor filed the adversary proceeding alleging repayment would present an undue hardship. The debtor did not respond to the university’s motion and failed to present any evidence to satisfy the Brunner test. Opinion below.
Judge: Carr
Attorney for Debtor: Eric C. Redman, Redman Ludwig PC
Attorney for University: Constantine Alexander Hortis, Maryland Attorney General
(Bankr. E.D. Ky. September 14, 2016)
(Bankr. E.D. Ky. Sep. 15, 2017)
The bankruptcy court denies the lender’s motion to dismiss the Chapter 11 bankruptcy. The lender argued that the party signing the debtor’s petition did not have the requisite authority to commence a bankruptcy case for the debtor. The bankruptcy court finds that amendments to the debtor’s operating agreement were made for the sole purpose of eliminating the debtor’s ability to file for bankruptcy without the lender’s consent. The court finds this violates Federal public policy and the provisions are unenforceable. Opinion below.
Judge: Schaaf
(7th Cir. Sept. 14, 2016)
(Bankr. W.D. Ky. July 28, 2017)