The U.S. District Court for the Eastern District of New York recently held that a confirmable Chapter 13 plan cannot both “vest” title to real property and “surrender” that property to a secured lender, and that the secured lender may refuse to accept the vesting in satisfaction of its claim.

Thus, the Court held that a debtor may not force the transfer of title in collateral to a secured creditor in satisfaction of the secured creditor’s claim, without the consent of the secured creditor.

The Connecticut Appellate Court has weighed in on the topic of whether or not a lender foreclosing a mortgage in Connecticut must comply with the statutory process to make the administrator of the decedent a party to the action to ensure a proper judgment of foreclosure enter…sort of.

By now (unless you’ve been living under a rock), we’re all familiar with the expression, “Netflix and chill.” It’s everywhere. Flooding your Instagram feed with duplicitous memes. Halloween costumes. Really, really bad pick-up lines. Like the many trite colloquialisms that have come before it, Netflix and chill’s ubiquity has begun to wane with overuse and time.

(U.S. Sup. Ct. June 13, 2016)

The Supreme Court holds that Puerto Rico is a “State” for purposes of Chapter 9’s pre-emption provision, despite the Code’s definition of “State” excluding Puerto Rico for purposes of defining who may be a debtor under Chapter 9. Thus, Puerto Rico cannot authorize its municipalities to seek relief under Chapter 9 nor enact its own municipal bankruptcy laws. The district court properly enjoined enforcement of the laws enacted by Puerto Rico in 2014, which enabled its public utilities to modify their debts. Opinion below.

(7th Cir. June 13, 2016)

A recent decision out of a New Jersey Bankruptcy Court highlights a loophole in the Bankruptcy Code which may allow Chapter 7 debtors to keep significant assets out of the hands of trustees and creditors.

Chapter 15 of the U.S. Bankruptcy Code, 11 U.S.C. §§ 1501 et seq., provides the legal framework by which U.S. bankruptcy courts recognize foreign insolvency proceedings of companies that have assets and operations in more than one country. Congress added Chapter 15 to the Bankruptcy Code with the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Like any new law, the application and limits of Chapter 15 are developing through jurisprudence.

Creditors are often compelled to commence expensive and time consuming litigation to first prosecute their claims and then locate and seize a debtor's assets. During this lengthy and costly process, the debtor's assets are dissipated and the creditor may realize only a fraction of its claim. The Bankruptcy Code¹ allows a trustee to liquidate a debtor's assets in a cost-effective, expeditious manner. Because of this, involuntary bankruptcy is a powerful tool that can expedite and maximize payments to affected creditors.

Freight brokers are well-accustomed to bankruptcy preference actions. Those actions, which are permitted under the Bankruptcy Code, allow a debtor, trustee or other bankruptcy estate representative to claw back payments made on account of antecedent debt in the 90 days prior to a bankruptcy filing. Trade creditors, especially those in the transportation industry, are often faced with significant preference claims because they provide service to debtors up until (and sometimes after) the debtor’s bankruptcy filing.

(E.D. Ky. June 7, 2016)