Under long-established common law, loans must be paid only upon maturity, not before. This "perfect tender in time" rule is the default rule in a number of jurisdictions. Many indentures and credit agreements therefore either bar prepayments altogether with "no call" provisions or permit prepayments with "make whole" provisions that require the payment of a specified premium to make up for the loss of future income.
In Venture Bank v. Lapides, 800 F.3d 442 (8th Cir. 2015), the Eighth Circuit found that a bank could not recover from its borrower and, in fact, had violated the post-discharge injunction by relying on change in terms agreements which were ineffective to reaffirm a debt discharged in the borrower’s Chapter 7 bankruptcy.
The U.S. Bankruptcy Court for the Middle District of Florida recently overruled a debtor's objection to a mortgagee's secured claim and denied the debtor's motion to determine secured status, holding that the issues should have been brought by adversary proceeding, and in any event neither Florida's statute of limitations nor its statute of repose barred enforcement of the note and mortgage. A copy of the opinion is attached.
It’s a new year, and we have a new law affecting debtors and creditors in California. Effective January 1, 2016, California’s Uniform Voidable Transactions Act (UVTA) has replaced California’s Uniform Fraudulent Transfer Act (UFTA). The full text of the new UVTA can be found here. While the UVTA is similar to the UFTA in most respects, certain important changes and key aspects of the new law are discussed below.
2015 was a rough year for the oil and gas industry. The primary source of the trouble was (and continues to be) the dramatic fall in crude oil prices. In 2014, the price of U.S. crude oil averaged approximately $91 per barrel. In 2015, the price dropped to an average of approximately $49 per barrel. As of this writing, the price was approximately $36 per barrel.
Section 105(a) of the Bankruptcy Code provides that a bankruptcy court “may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a). In the Caesars bankruptcy, the Seventh Circuit explored the breadth of a court’s rights to take action under this section. The Seventh Circuit held that section 105(a) permits the Bankruptcy Court to issue an injunction with respect to litigation pending against the debtors’ non-debtor parent.
Section 109(e) of the Bankruptcy Code limits eligibility for chapter 13 relief to those individual debtors whose noncontingent, liquidated unsecured debts do not exceed statutory limits. In calculating eligibility to file chapter 13, should a court consider debts which have been discharged in a prior chapter 7 case and which are “out of the money” because, while secured by a trust deed against the debtor’s residence, the value of the debtor’s residence is insufficient to cover the debt relating to the first trust deed?
Oil and gas price volatility is as much a part of the energy business as drill bits. Few predicted that the current down-cycle would be as long or as deep as it is proving to be. While global events could turn and prices improve, lower prices seem to be a reality for now. Lower prices impact the finances of everyone in the energy industry. Insolvencies, business failures, and bankruptcies are inevitable in this environment; and when they occur, they affect everyone, at all levels and in all aspects of the industry.
Quite often a creditor discovers that one of its debtors has avoided satisfying a liability by fraudulently transferring assets to another individual or entity. This is a frustrating discovery, but the creditor is not without remedies. Under Florida Statutes fraudulent transfers can be attacked and unwound through two methods. The popular method is filing a lawsuit to include a statutory cause of action to invalidate the fraudulent transfer under