On December 8, 2014, the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11 issued an extensive report detailing hundreds of recommended changes to the Bankruptcy Code to address significant economic and financial developments since the enactment of the Bankruptcy Code in 1978. The recommendations aim to reduce the cost of chapter 11, increase the predictability of disputes by resolving ambiguous and divergent case law, provide more flexibility for debtor in possession financing, curb the power of senior lenders, and increase protections for creditors when a
A recent decision by the United States Bankruptcy Court for the Western District of Missouri held that a manufactured home is real property for purposes of Section 1322(b)(2) of the Bankruptcy Code. This holding prevents chapter 13 debtors from modifying a secured lender’s claim where the claim is secured by a lien on a manufactured home in Missouri that is the debtor’s primary residence.
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In re Triple A & R Inv., Inc., 519 B.R. 581 (Bankr. D. P.R. 2014) –
A mortgagee moved for relief from the automatic stay based on the debtor’s prepetition consent to stay relief. The debtor argued that a prepetition waiver was unenforceable.
When a chapter 11 plan of reorganization contains no provision that allows for the full debt to be collected in the event of a debtor’s nonpayment, the creditor’s obligation cannot be accelerated under Florida law absent an acceleration provision. The recent case of Baggett Bros. Farm, Inc. v. Altha Farmers Co-op., Inc., No. 1D:13-4200, 39 Fla. L. Weekly D2127, 2014 WL 5033350 (Fla. 1st DCA Oct. 9, 2014), reh’g denied (Nov. 7, 2014) highlights this point.
Put your lender’s hat on. Wouldn’t it be great if you could prevent your borrower from filing bankruptcy in the first place? Unfortunately for lenders, a recent decision demonstrates how hard it is to prevent bankruptcy filings.
In a case that should cause lenders heartburn, the United States District Court for the Western District of North Carolina recently ruled that common provisions in a Chapter 11 plan prevented the debtor’s lender from executing on a judgment against the non-debtor owner of the debtor.1 Biltmore is a corporation2 that operates manufactured home parks and sells and rents manufactured homes. McGee is the president and controlling shareholder of Biltmore. Biltmore filed Chapter 11 in January of 2011, and TD Bank was Biltmore’s largest secured creditor.
The Ninth Circuit Court of Appeals recently rendered its decision in the Mwangi case, dealing whether a debtor can assert a claim against his bank for placing an administrative freeze on his bank account pending a determination of the debtor’s exemption claim as to the funds in the account.
Under section 365(f)(1), a debtor is permitted to assume and assign leases and executory contracts notwithstanding contractual limitations or “applicable law” that restricts such assignment. However, that broad general authorization begins with the limiting language, “except as provided in subsection (b) and (c) of this section….”
The American Bankruptcy Institute Commission to Study the Reform of Chapter 11 (the “Commission”) issued its 400-page Final Report and Recommendations (the “Report”) on Dec. 8, 2014. The Report recommends a variety of changes to Chapter 11 of the Bankruptcy Code.