In my May 26th post, I raised several questions that unsecured creditors in any Chapter 11 case should know the answers to and take action where appropriate. One of those questions is “Am I entitled to priority payment?” This is also important to answer in a Chapter 7 case.

Under Section 521(a)(2)(A) of the federal bankruptcy code, a debtor in a chapter 7 bankruptcy must file a statement within 30 days of the bankruptcy filing notifying the court, creditors and the trustee whether the debtor intends to retain or surrender property encumbered by a mortgage.  In its October, 2016 decision in the case of In re Failla, the 11th Circuit Court of Appeals, in affirming rulings from the bankruptcy court and the federal district court, held that once a chapter 7 debtor elects to "surrender" mortgaged property, he is precluded from thereafter opposing

(Bankr. S.D. Ind. Oct. 19, 2016)

The bankruptcy court enters judgment in favor of the plaintiff in this adversary proceeding arising from a transaction involving the sale of a restaurant and associated assets. The court finds that rights in the purchase agreement were effectively assigned to the plaintiff, and the purchase agreement should be reformed to reflect the proper selling party. Further, the court finds that various defendants are liable to the plaintiff on breach of warranty, conversion, and other claims. Opinion below.

Judge: Lorch

A recent decision by the United States Bankruptcy Court for the Western District of Texas in In re Sanjel (USA) Inc.,et al., Case No. 16-50778-CAG (Bankr. W.D. Tex. July 29, 2016) explains that in a Chapter 15 case, the U.S. bankruptcy court will not always apply the law of the foreign jurisdiction to U.S. creditors and U.S.-based claims.

Rated and other debt issuances are often structured with borrowers that are special purpose entities, whose governance provisions are designed to inhibit bankruptcy filings. A recent District of Delaware bankruptcy court case, while not directly on point, throws into question the premises underlying the efficacy of such provisions.

Facts 

The U.S. District Court for the Middle District of Florida, Orlando Division recently ruled that debtors’ FCCPA and TCPA claims did not arise out of and were not related to their mortgage to fall under the jury waiver provisions in the mortgage where the claims arose out of attempts to enforce a debt that was discharged in bankruptcy.

The Court also ruled the debtors sufficiently stated a claim under FCCPA by alleging the creditor received notice of the debtors’ bankruptcy case to constitute actual knowledge the debtors’ were represented by counsel.

As many investors anticipated, the deep trough in the commodities market over recent years resulted in a number of companies in commodity industries restructuring their balance sheets through a Chapter 11 bankruptcy process. Because companies often reorganize in the midst of a market downturn, a commodity company’s low EBITDA during this time usually results in low values being placed on the company’s reorganized equity.

Imagine you are the CEO of company sitting across from an interviewer. The interviewer asks you the age old question, “So tell me about your company’s strengths and weaknesses?” You start thinking about your competitive advantages that distinguish you from competitors. You decide to talk about how you know your customers better than the competition, including who they are, what they need, and how your products and services fit their needs and desires. The interviewer, being somewhat cynical, asks “Aren’t you worried about the liabilities involved with collecting all that data?”

On October 11, 2016, the Supreme Court of the United States granted cert in Midland Funding, LLC v. Johnson, No. 16-348 (Oct. Term 2016) to resolve a split among the Circuits as to the FDCPA’s prohibition against deceptive collection practices in the context of filing proofs of claim for debts where a collection action would otherwise be time-barred.

Recently, the U.S. Court of Appeals for the Sixth Circuit issued an opinion in the Chapter 7 bankruptcy case Bash v.