Readers familiar with contract law undoubtedly know the “mailbox rule,” that an offer is accepted the moment a document goes in the mail.1 The United States Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) recently dealt with its own variant of the mailbox rule: does the issuance of a check constitute a transfer of estate assets on the date the check is delivered or on the date it is honored?
Here’s an aggregation of 28 of my Twitter posts from mid-June 2018, with links to important cases, articles, and news briefs that restructuring professionals should find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!
BK RELATED CASES:
Municipalities often drive economic development through subsidiaries and affiliated entities. When these “quasi-municipalities” become distressed, however, questions arise as to whether the potential debtor qualifies as a debtor under Chapter 11 or Chapter 9. This uncertainty can lead to litigation over whether the entity may proceed as a Chapter 11 debtor or is a governmental unit that must proceed through a Chapter 9 bankruptcy filing. In states where Chapter 9 is not authorized, Chapter 11 may be the only available option for a supervised restructuring.
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 Topfer v. Topfer (In re Topfer), Case No. 5-18-ap-00066 RNO (M.D. Pa. July 25, 2018), the Bankruptcy Court for the Middle District of Pennsylvania remanded a three-and half year old divorce proceeding that had been removed to bankruptcy court. But, the remand became more complicated than it needed to be.
The chapter 7 debtor had removed the divorce action immediately after filing for chapter 7 bankruptcy. Shortly after removal, the non-debtor spouse moved to remand the case on mandatory abstention and permissive abstention grounds.
Weird things happen in bankruptcy court. All you high-falutin Chapter 11 jokers out there, cruise down to the bankruptcy motions calendar one day.
Many practitioners know that certain types of tax debt are not discharged in an individual debtor’s bankruptcy case. But there are classes of tax debt that may be discharged. For example, income tax debt not excepted under Bankruptcy Code section 523(a)(1) may be discharged. One exception in section 523 is for tax debt for which a tax return was not filed or given. This can often come up in an individual bankruptcy case where the debtor has failed to file tax returns before the bankruptcy case. But what happens to the tax debt if the debtor filed the return late?
Under the Bankruptcy Code, a preference payment is commonly defined as a transfer of property of the debtor within 90 days before the bankruptcy filing to or for the benefit of a creditor on account of an existing debt while the debtor was insolvent, allowing the creditor to receive more than it would otherwise receive in a chapter 7 liquidation.
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently applied the “conceivable effect” test in holding that a bankruptcy court lacked jurisdiction over a state law fraud claim raised by a third party regarding the validity of a lender’s lien, and therefore, declined to consider the issue on appeal.
In so ruling, the Panel ruled that the state law fraud claim did not invoke “arising under” or “arising in” jurisdiction of the bankruptcy court because the state law fraud claim was not created or determined by the Bankruptcy Code, and could exist outside of bankruptcy.