Section 524 of the United States Bankruptcy Code (the Code) describes the effect of a discharge of a debtor, and in section 524(e), provides that a discharge of a debtor does not affect the liability of any other entity for the debtor's obligations. Today, virtually every plan of reorganization or liquidation includes releases for officers, directors and employees of the debtor, affiliates of the debtor, debtor and committee counsel involved in the case, the members of the creditors committee and plan sponsors, among others.
Some of our readers may have had the pleasure of renting a resort villa during their summer vacation (electronic postcards of such fancy digs are always welcome at the Weil Bankruptcy Blog, especially if you pose for a photo where you are reading one of our entries!). For the uninitiated (including yours truly), villas are often viewed as the ultimate upgrade for privacy and convenience when staying at a large resort for a week or more—a private home with the luxuries of a full service hotel.
Lenders typically have extensive requirements for what inventory will be deemed “eligible” and included in a borrower’s borrowing base for purposes of determining how much the lender is required to lend. One of those typical requirements is that the inventory be owned by the borrower and located at a borrower location in the United States of America, where it will be subject to the Uniform Commercial Code and amenable to an Article 9 security interest.
This article was first published in the summer 2014 issue of NABTalk, the publication of the National Association of Bankruptcy Trustees.
For some time, there has been a split among the circuit courts as to whether the Bankruptcy Code permits non-consensual releases of non-debtor entities under a plan of reorganization.
A bankruptcy court lacks subject matter jurisdiction to determine a tax refund claim under Section 505(a)(2)(B) of the Bankruptcy Code where the refund was requested by a liquidating trustee appointed pursuant to a plan, as opposed to a pre-confirmation bankruptcy trustee or debtor-in-possession, the Second Circuit held in United States v. Bond, Docket No. 12-4803 (2nd Cir. Aug. 13, 2014).
In re Demers, 511 B.R. 233 (Bankr. D. R.I. 2014) –
A chapter 13 debtor objected to the portion of a mortgagee’s claim consisting of expenses related to foreclosure of its mortgage. She argued that since the mortgagee failed to comply with notice requirements under the mortgage, the foreclosure expenses were not valid.
INTRODUCTION
A senior mortgagee battled the debtor and a junior mortgagee over its entitlement to post-petition interest: If and when did it become oversecured and thus entitled to interest? Was it entitled to interest at the default rate? Should the interest be compounded?
On July 16, 2014, the Uniform Law Commission (the “Commission”) approved a series of discrete amendments to the Uniform Fraudulent Transfer Act (the “UFTA”) and renamed it the Uniform Voidable Transactions Act (the “UVTA”). The UVTA is intended to address inconsistency in the courts, better harmonize with the Bankruptcy Code and the Uniform Commercial Code (the “UCC”), and provide litigants with greater certainty in its application to a fraudulent transfer action.