(Bankr. E.D. Ky. Mar. 31, 2016)
The bankruptcy court grants in part and denies in part the defendants’ motions to dismiss and for summary judgment. The debtor asserted numerous claims under the Fair Credit Reporting Act (“FCRA”) and related state law causes of action in his complaint. The court finds the debtor does not have standing to assert certain claims under FCRA. The court also addresses issues of preemption under FCRA and various statutes of limitations. Opinion below.
Judge: Wise
Debtor: Pro Se
(6th Cir. Mar. 28, 2016)
The Sixth Circuit affirms the order granting summary judgment to the creditor, finding a debt nondischargeable under 11 U.S.C. § 523(a)(2)(A). Summary judgment was appropriate because the debtor was collaterally estopped from defending against the fraud claim. The creditor had obtained a default judgment against the debtor, post-petition, in another court as a sanction. The court holds that the entry of the default judgment was not a violation of the automatic stay. Opinion below.
Judge: Boggs
Attorney for Debtor: Jonathan Rudman Bunn
(S.D. Ind. Mar. 28, 2016)
It always starts so easy. Borrower comes in and wants to borrow money. Lenders want some form of collateral to secure (potentially) a loan and the Borrower happily agrees to provide, or pledge, collateral to secure a loan. Common examples are the Borrower pledging inventory, equipment or receivables (assuming of course there is no real estate to lien with a mortgage). Lender, either internally, or with outside counsel, prepares the necessary security agreement to document the pledge of collateral. This is generally the description of a secured transaction.
Depending on the nature of its business, a debtor may encounter issues associated with the Perishable Agricultural Commodities Act (“PACA”), a statue designed to protect sellers of perishable produce. Recently, in Kingdom Fresh Produce, Inc. v.
A.BACKGROUND
The term “bad boy” guaranty is used in certain circumstances to describe a guaranty to be provided – usually by an individual, not an entity – in connection with, most often, real estate financing.
The original intent of “bad boy” guarantys was to influence the post-closing behavior of a principal of the borrower, in order to discourage bad conduct that would harm the lender’s position and collateral. Traditionally, the triggers for recourse to the borrower and/or guarantor liability were events such as:
“Some people have a way with words, and other people…oh, uh, not have way.”
The Seventh Circuit Court of Appeals recently handed down a decision with significant implications for landlords contemplating lease termination agreements with distressed tenants. Ruling on a direct appeal in the chapter 11 case In re Great Lakes Quick Lube LP, the court held that a lease termination agreement between a landlord and a financially distressed tenant can be voided as either a fraudulent conveyance or a preferential transfer in the tenant’s subsequent bankruptcy case.
A Chapter 11 debtor’s pre-bankruptcy “surrender of [two] … leases to [its landlord] could be regarded as a preferential transfer,” held the U.S. Court of Appeals for the Seventh Circuit on March 11, 2016. In re Great Lakes Quick Lube LP, 2016 WL 930298, at *2 (7th Cir. March 11, 2016).
In In re Caesars Entertainment Operating Co v BOKF, NA(1) the US Court of Appeals for the Seventh Circuit reviewed a bankruptcy court's denial of a trustee's motion for a temporary injunction staying litigation between non-debtors.
Facts