Readers may recall that, according to at least one bankruptcy court, chapter 9 debtors are not required to obtain bankruptcy court approval of compromises and settlements.
On June 12, 2014, the U.S. Supreme Court issued its decision in Clark v. Rameker, 537 U.S. __ (2014), resolving a difference between federal circuit courts on the issue of whether an inherited IRA is excluded from the bankruptcy estate under section 522(b)(3)(C) of the federal Bankruptcy Code, which exempts retirement funds from the bankruptcy estate. Recall that an inherited IRA is one that has come to a beneficiary by reason of surviving the participant whose retirement funds had been amassed during their lifetime for their own retirement.
On June 12, 2014, the Supreme Court held that assets of an “inherited IRA” are not exempt from the IRA holder’s bankruptcy estate and are subject to the claims of creditors in bankruptcy. (Clark v. Rameker, Sup. Ct. Slip Op. No. 13-299, affirming In re Clark, 714 F.3d 559 (7th Cir. 2013). In Clark, the petitioner, Heidi Heffron-Clark, inherited an IRA worth approximately $450,000. The IRA was originally established by the petitioner’s mother as a traditional IRA and became an inherited IRA upon her death in 2001.
The First Circuit Court of Appeals in In re SW Boston Hotel Venture, LLC, 2014 U.S. App. LEXIS 6768 (1st Cir. Apr. 11, 2014) recently ruled on a number of issues critical to valuing a secured claim in bankruptcy. Specifically, the court 1) endorsed the use of a “flexible approach” to value collateral under the circumstances of this case, 2) recognized that the date collateral should be valued is the lender’s burden to prove, and 3) confirmed that the pre-petition agreement’s default interest rate should generally be used to determine the post-petition interest rate.
Q: When is a retirement account not a retirement account?
A: When it's an inherited IRA and the owner is bankrupt.
The recent Chapter 11 bankruptcy filing by James River Coal was the latest reminder that mining companies continue to face unique and myriad challenges. Several factors, including the depressed global economy, tougher environmental rules and enforcement, funding and liquidity challenges, and market volatility, are causing industry-wide stress, particularly for coal companies. Trade press and pundits suggest that more mining company bankruptcies may be on the horizon.
One deliberately ironic facet of the 2004 film Howard Hughes bio-pic The Aviator (the one with Leonardo DiCaprio) is the fact that the airlines fighting for world dominance in the 1940s were Howard Hughes’ TWA and Juan Trippe’s Pan Am. By the time of the movie, of course, both famous airlines were gone. Pan Am’s final descent into bankruptcy court ended in 1991. Following its own troubles (and two bankruptcies in the 1990s), TWA was acquired by American Airlines in 2001. But does the death of an airline mean an end to litigation? Of course not.
What do you get when you combine a 20+ year old bankruptcy, a contaminated landfill, and a state regulatory agency that moves at a glacial pace? The answer: In re Solitron Devices, Inc., a recent decision from the Bankruptcy Court for the Southern District of Florida.
Energy Future Holdings Corp. filed a prepackaged ("pre-pack") chapter 11 in April 2014 seeking a complete restructuring and quick-exit from bankruptcy, aiming to be in and out of bankruptcy in under 11 months. In May 2014, the Bankruptcy Court for the District of Delaware confirmed the prepackaged disclosure statement and reorganization plan of Quiznos, and on May 23, 2014, the Bankruptcy Court for the Southern District of New York approved a $570 million loan in the Momentive Performance Materials prepack bankruptcy.
In Executive Benefits Insurance Agency, petitioner vs. Peter H. Arkison, Chapter 7 Trustee, Case No. 12-1200, 573 U.S. __(2014) the United States Supreme Court ( Court) delivered its opinion as a follow up to its landmark decision in Stern v. Marshall. In Stern v.