Companies in severe financial distress often seek refuge in bankruptcy. However, while bankruptcy may offer the company-debtor protection against claims of unpaid wages, it does not insulate individual officers, directors and managers from personal liability under the Fair Labor Standards Act ("FLSA") for such claims. InBoucher v.

In Greene v. Mullarkey, Case No. 07-30561-HJB, Adversary Proceeding No. 08-03009, 2009 Bankr. LEXIS 2191 (Bankr. D. Mass. Aug. 13, 2009), Christine Greene, her brother Matthew Mullarkey, and his wife Nicole Mullarkey were entangled in what the Bankruptcy Court described as an intra-family feud. The feud related to ownership of a two-family residential property and "played out on or in the property's porch, attic, basement, garage, yard and in-ground pool," prompting the Court to pay its "respect and admiration for the work done by the Massachusetts Probate and Family Court."

During the bankruptcy cycle following the recession of 2001, numerous debtors – notably airlines such as US Airways and United Air Lines, Inc. – undertook “distress terminations” of their ERISA-qualified defined benefit pension plans, which are insured by the Pension Benefit Guaranty Corporation (PBGC). The PBGC found itself holding large general unsecured claims arising from significant underfunding of pension plans insured by the PBGC as a result of these terminations. Efforts by the PBGC to obtain either administrative priority or secured status for these claims invariably failed.1

In today's difficult economic climate, a growing number of companies have been forced to consider or even file for bankruptcy. Such filings may result in a stay of legal claims against the company, including those brought by current or former employees under the Fair Labor Standards Act (FLSA). But according to the Ninth Circuit, a company's filing for bankruptcy does not protect its individual executives and managers from potential liability under the FLSA.

The Supreme Court declines to review a circuit court decision in Oneida Ltd., which held that a debtor cannot discharge in bankruptcy, as a prepetition claim, premiums it owes to the Pension Benefit Guaranty Corporation in connection with the termination of a pension plan.

Introduction

No. 09-6024 (8th Cir. BAP 11/30/09)

Businesses considering filing Chapter 11 for bankruptcy protection may not necessarily be able to avoid certain environmental cleanup obligations. The underlying policy goals of bankruptcy and environmental laws are in direct conflict in that bankruptcy law seeks to promote financial rehabilitation by discharging a debtor's past obligations in order to promote financial rehabilitation while environmental law seeks to ensure that the government can order responsible parties to clean up contamination, including historical pollution caused by business predecessors.

Beneficiaries of a Ponzi scheme who were subsequently found liable to cheated investors under state securities laws could not discharge this liability under Chapter 7 of the Bankruptcy Code, the U.S. District Court for the Western District of Oklahoma ruled.

The collection of foreclosure and bankruptcy-related fees in Chapter 13 bankruptcy cases has been the cause of much grief for mortgage servicers of late. Learning how to do it right on the front end of a bankruptcy is the remedy. Unfortunately, the law varies to a wide degree depending upon the state where the borrower resides. This leaves mortgage lenders and servicers with little ability to streamline activities on a nationwide basis.

In connection with the administration of the debtors’ bankruptcy case, the trustee in Badovick v. Greenspan (In re Greenspan), No. 10-8019, 2011 Bank. LEXIS 272 (B.A.P. 6th Cir. Feb.