United States Bankruptcy Court, D. Maryland. March 02, 2020
The plaintiffs were various entities who filed for bankruptcy protection under Chapter 11 in 2001. Their bankruptcy confirmation order set a bar date for the filing of claims by creditors against the entities. Nearly 16 years later, asbestos claimants filed claims for exposure to asbestos in Pennsylvania. The plaintiffs then filed suit against the asbestos claimants as an adversarial bankruptcy proceeding. Motions for summary judgment were filed by both sides.
Bankruptcy and class actions each establish elaborate procedures and provide a convenient forum to resolve numerous claims against one or more defendants, in an efficient manner. However, while a class action focuses on providing adequate representation to claimants with similar claims, bankruptcy focuses on enabling an insolvent company to reorganize. The two goals do not necessarily blend well in every circumstance.
The importance of clarity in drafting agreements can never be understated. And while there are strategies available to spouses of business owners to help protect a family in bankruptcy, it is imperative to properly plan and draft to receive such protection from the Courts. In re Somerset Regional Water Resources, LLC, _____________ F.3d ________________ (3rd Cir. 2020) (“Somerset”), recently decided by the Third Circuit Court of Appeals, offers a prime example of both cautionary concepts.
Hunt (as Liquidator of Systems Building Services Group Limited) v Michie and Others [2020] EWHC 54 (Ch)
On 21 January 2020 ICC Judge Barber handed down a decision which considered, in what is believed to be a first, the question of whether director’s duties survive the insolvency of a Company.
Bankruptcy and insurance have been engaged in a tangled web for decades. Claimants against bankrupt insureds are often frustrated in seeking a recovery that they might otherwise obtain if the insured had not gone bankrupt. In a recent case, the Third Circuit addressed the standing of a default judgment creditor claimant to sue the bankrupt insured’s insurance company to recover the default judgment.
The Small Business Reorganization Act of 2019 (“SBRA”) became effective on February 19, 2020, after being enacted by Congress at blazing speed. Indeed, the legislation was first introduced into the House of Representatives on June 18, 2019, was received by the Senate on July 24, 2019 and was signed by the President on August 23, 2019. The SBRA is intended to help small businesses restructure their debts in bankruptcy more effectively.
In a unanimous decision written by Justice Neil Gorsuch (Rodriquez v. FDIC No 18-12690), the Supreme Court vacated a decision by the U.S. Court of Appeals for the Tenth Circuit (In reUnited Western Bancorp, Inc., 914 F. 3d 1262 (10th Cir, 2019)) that awarded a federal income tax refund of a failed bank to the Federal Deposit Insurance Corporation as receiver.
Two recent decisions involving health care companies demonstrate how reorganization under Chapter 11 of the Bankruptcy Code1 can be used to manage large liabilities.
Bankruptcy Rule 8002 and Federal Rule 58 can sometimes look like this. Carolina and Khaled have a much simpler solution.
Consumer Protection
Vacationers Beware: Timeshare Exit Companies May Be Scammers, not Saviors