Whether a dispute that is subject to arbitration can or must be referred to arbitration after one of the parties to a prepetition arbitration agreement files for bankruptcy has long been a source of disagreement among bankruptcy and appellate courts due to a perceived conflict between the Federal Arbitration Act and the Bankruptcy Code. The U.S. Bankruptcy Court for the Northern District of Illinois recently provided some useful guidance regarding this issue.

Assignments for benefit of creditors (“ABC”) are rarely used in these United States. That’s for two reasons: (i) some states have no ABC statute and do not recognize the common law of ABCs, and (ii) other states have onerous ABC statutes that no one wants to use.

The State of Illinois is an exception: ABCs are regularly and frequently used there, under the common law of trusts, because the ABC process is an efficient and effective tool for liquidating a failed or failing business. There is no ABC statute in Illinois.

A confession of judgment clause may allow a creditor to seek a judgment immediately against the debtor if the debtor fails to pay an obligation. Confession-of-judgment clauses, by which a debtor waives most rights to contest a debt, often appear in contracts, promissory notes, guaranties and other agreements. Signing a confession-of-judgment clause may help a debtor get credit not otherwise available. But although the confession-of-judgment clause is designed to streamline collections, enforcing one is not always simple or easy.

IMAGINE THE FOLLOWING SCENARIO: WITHOUT FIRST CONSULTING ITS LAWYERS, your firm’s major client, Hapless Client, LLC (“Hapless”) entered into a horrible one-sided contract with Sketchy Business, Inc. (“Sketchy”). To make matters worse, Sketchy just filed a contract claim against Hapless to enforce that contract, and Sketchy’s complaint seeks massive damages that could put Hapless out of business permanently. An interview with Hapless confirms the truth of the essential allegations of the complaint.

Sometimes a dissipation-of-assets claim under the IMDMA isn't enough when a recalcitrant spouse hedes assets. Never fear - the Illinois Uniform Fraudulent Transfer Act may be the answer.

A confession of judgment lets a creditor take a judgment without notice to the debtor, who usually first learns of the lawsuit when the creditor seizes his bank accounts and takes related steps. Here are strategies for representing commercial debtors facing such judgments. 

Your developer client borrows $5 million from a bank to improve a strip mall on Chicago’s northwest side. The developer signs a promissory note with a floating interest rate of 1 percent over the Wall Street Journal prime rate, and its principal shareholder signs a guaranty. 

The Appellate Court of Illinois, Second District, recently affirmed a trial court’s ruling denying a borrower’s motion to vacate the default judgment of foreclosure against him and confirming the judicial sale of the borrower’s property.

In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.

An assignment for benefit of creditor (“ABC”) is, historically, a nonjudicial process for administering the affairs of a failed business. ABC laws are rooted in English common law and predate enactment of federal bankruptcy laws in the U.S.[Fn. 1]

An ABC is made by a formal, voluntary transfer of most-or-all of a business’s assets to an assignee, in trust, to apply the property or its proceeds to the payment of debts and to return any surplus to the debtor.

The Northern District of Illinois recently denied a motion to dismiss a FCRA claim finding that the complaint sufficiently alleged that the defendant did not have a “permissible purpose” to access the plaintiff’s credit report for collection of a mortgage debt that the plaintiff alleged was previously discharged in bankruptcy. In Andrea Billups v. PHH Mortgage Corporation, No. 19 C 7873, 2021 WL 1648114 (N.D. Ill. Apr. 27, 2021), the plaintiff alleged that the Defendant mortgage server violated 15 U.S.C.