For the third time in less than two years, the Eleventh Circuit Court of Appeals has ruled that a chapter 7 debtor who does not reaffirm the secured debt or redeem the property must surrender the property. In re Woide, No. 17-10776 (11th Cir. Apr. 5, 2018).
Fifth Circuit Rejects Breach of Fiduciary Duty and Fraudulent Transfer Claims
By Michael L. Cook*
Recently, the Eighth Circuit Court of Appeals issued a ruling that overdraft payments advanced by Banks which are later repaid by their customer constitute preferential transfers under the Bankruptcy Code. In re Agriprocessors, Inc., involved a meat packing company which periodically overdrew its bank accounts, and the bank issued provisional credit to cover the overdrafts. The bank initially denominated those overdrafts as “intraday” overdrafts until the midnight settlement deadline, at which point they became “true” overdrafts.
Toys “R” Us filed for bankruptcy in September 2017, with hopes that a strong holiday season would facilitate a successful reorganization.
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.
On March 20, the CFPB released updated FAQs to support the implementation of the 2016 Mortgage Servicing Final Rule. Specifically, the updated FAQs pertain to the mortgage-servicing provisions regarding bankruptcy, which are effective April 19. The CFPB released ten bankruptcy-related question and answers.
On March 20, Florida Governor Rick Scott signed Senate Bill 220 into law. The bill is designed to limit the ability of defendants in foreclosure proceedings to keep contesting the foreclosure after agreeing, in bankruptcy, to surrender the property to their lenders.
Can a bankruptcy trustee recover a fraudulent transfer made six, eight, ten years ago? Bankruptcy courts around the country are answering that question with a resounding “yes”, so long as the IRS holds an unsecured claim against the debtor. If more courts arrive at this conclusion, creditors face the risk that trustees will step into the shoes of the IRS to borrow its ten-year statute of limitations for the recovery of fraudulent transfers.
What happens to the a licensee’s right to use a trademark if the licensor files for bankruptcy?