The scope and extent of debts that may be discharged is an often litigated issue in bankruptcy. In a recent Chapter 13 case in the U.S. Bankruptcy Court for the Eastern District of Michigan, the bankruptcy court considered whether an otherwise dischargeable government penalty debt is nondischargeable if the debt arises from fraud^.[1]

Lenders make secured loans expecting to recover the collateral in the event of a default. The collateral is sold to satisfy the debt. Experienced secured lenders understand that the automatic stay in bankruptcy stops recovery of collateral recovery without permission of the court. However, many secured lenders do not understand rights related to the statement of intention every debtor is required to send to each secured creditor.

There are no secrets in bankruptcy, or at least only in very limited circumstances, according to a recent decision in 

In a decision that surprised many, the United Stated Circuit Court of Appeals for the Tenth Circuit (the “10th Circuit Court of Appeals”) affirmed decisions finding that a payment made on account of a first time transaction between a debtor and creditor can qualify for the ordinary course of business defense under 11 U.S.C. § 547(c)(2).

When a bankruptcy case is dismissed for cause pursuant to section 1112(b) of the Bankruptcy Code, the effect of the dismissal on orders entered during the case is not always clear.  A recent District of Delaware decision, 

It is a basic feature of sales under section 363 of the U.S. Bankruptcy Code, that the purchaser takes free and clear of all claims and interests, such claims and interests attach to the proceeds of the sale in accordance with their priorities.

On September 8, 2015, a federal district court invalidated a portion of the Georgia post-judgment garnishment statute in Strickland v. Alexander, No. 1:12-CV-02735-MHS (N.D. Ga.). Senior Judge Marvin Shoob found that the statute was constitutionally deficient on due process grounds, insofar as it fails to require:

A divided panel of the U.S. Court of Appeals for the Third Circuit stayed the part of a bankruptcy court’s sale order that would have “stripped” a commercial tenant’s lease from the casino property being sold to a third party. In re Revel AC, Inc., 2015 WL 5711358 (3d Cir. Sept. 30, 2015) (2-1).

Although almost eight years have lapsed since the chapter 11 cases of Tulsa, Oklahoma-based SemCrude L.P.

A recent decision by the Ninth Circuit Court of Appeals (found here) changes the strategic calculus for a secured creditor deciding whether to file a proof of claim in a bankruptcy case in the Ninth Circuit.  It has long been true that a secured creditor does not necessarily imperil his lien if he ignores a bankruptcy proceeding and declines to file a claim in connection with his lien.  See U.S. Nat’l Bank in Johnstown v.