The Southern District of West Virginia recently held that the reporting of an account being paid through a Chapter 13 bankruptcy plan as having an outstanding balance or past due payments does not violate the Fair Credit Reporting Act.

In re Castle Home Builders, Inc., 520 B.R. 98 (Bankr. N.D. Ill. 2014) –

The debtors obtained confirmation of plans of reorganization that restructured prepetition mortgage loans.  When the servicer for some of the loans continued to ignore the terms of the plans, the reorganized debtors sought enforcement of the court’s confirmation order and sanctions.

In re Charles Street African Methodist Episcopal Church of Boston, 510 B.R. 453 (Bankr. D. Mass. 2014) –

In connection with a proposed sale of real property, a chapter 11 debtor sought to prohibit the mortgagee from submitting a credit bid. It contended that there was “cause” based on its argument that the mortgagee’s claims were subject to a bona fide dispute.

In re 1701 Commerce, LLC, 477 B.R. 652 (Bankr. N.D. Tex. 2012) –

The capital stack for Presidio Hotel Fort Worth, L.P. consisted of (1) a senior loan of $39.6 million from Dougherty Funding, LLC, (2) a junior loan from Vestin Originations, Inc. and (3) a 20-year tax agreement with the City of Fort Worth pursuant to which the City made annual grant payments.

In re Heritage Highgate, Inc., 679 F.3d 132 (3rd Cir. 2012) –

In circumstances where a debtor lacks mental capacity to deal with a statutory demand and subsequent bankruptcy petition, the court will rescind or annul a bankruptcy order.

In the current economic climate, there are a number of key issues facing borrowers in the event of lender insolvency or default.

Committed facilities/term loans

Provided they are fully drawn and the borrower is not in breach itself, the impact in the short term may not be too severe.

A guarantor can be made bankrupt where the terms of the guarantee create a debt obligation.

An agreement to pay off part of a judgment debt owed jointly with others will not of itself amount to consideration sufficient to prevent a creditor going against a debtor for the unpaid balance of the judgment.

The court has held that a statutory demand is valid despite the high default interest rate on an underlying loan.