Within one day of each other, the U.S. District Court for the District of Massachusetts (“District Court”) in Perkins v. Massachusetts Department of Revenue, 507 B.R. 45 (Mar. 7 2014), and the Bankruptcy Appellate Court for the First Circuit (“BAC”) in Gonzalez v. Massachusetts Department of Revenue, 506 B.R. 317 (Mar. 6, 2014), issued contrary appellate rulings as to whether tax liabilities in late-filed state tax returns are dis-chargeable under Chapter 7.
A bipartisan coalition of senators from the U.S. Senate Committee on Health, Education, Labor, and Pensions has reportedly urged action on a bill (S. 959) that would give the Food and Drug Administration (FDA) additional authority over compounded drugs, which have traditionally been subject to state oversight.
A bankruptcy court in Texarkana, Texas held that breaches by two debtor-franchisees of a non-competition covenant in their franchise agreement with a print shop franchisor qualified for discharge through bankruptcy. As the court noted, in addition to equitable remedies such as injunctive relief, Michigan law (under which the franchise agreement was governed) allowed for the award of monetary damages as compensation for violation of a non-competition agreement. Because monetary damages were an available remedy, the court reasoned, the breach of the covenant qualified as a dischar
A Massachusetts bankruptcy court denied the motion for summary judgment of reinsurers Trenwick America Reinsurance Corporation and Unum Life Insurance Company, which sought to determine that debtor Malcom C. Swasey’s debt owed them was nondischargeable in bankruptcy. The underlying dispute centered on the reinsurers’ claim that Swasey and companies he controlled, IRC, Inc. and IRC Re, engaged in fraud and breached a contract under which IRC Re was to provide retrocessional coverage in connection with a workers’ compensation program.
On October 18, 2012, the U.S. District Court for the District of Massachusetts ruled that two private equity investment funds managed by Sun Capital Partners, Inc. were not liable for their bankrupt portfolio company's multiemployer pension plan withdrawal liability (Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund, Civ. Action No. 10-10921-DPW (D. Mass. Oct. 18, 2012)).
The US Bankruptcy Court in Massachusetts says default rates must be justified as a reasonable measure of damages at the time of the making of the loan and that a floating default rate that can exceed 5% will not be allowed as part of a creditors claim in the borrower's bankruptcy. The loan was made in 2006 with a contract rate equal to prime at a time when the prime rate was below 13 percent.
A federal court recently held that two investment funds are not jointly and severally liable for a bankrupt portfolio company’s withdrawal liability to a multiemployer pension plan disagreeing with a 2007 opinion by the Appeals Board of the Pension Benefit Guaranty Corporation (the “PBGC”). The Massachusetts U.S. District Court ruled there was no liability because the investment funds are not “trades or businesses” for purposes of ERISA’s joint and several liability rules.
On October 16, 2012, battery maker A123 Systems, Inc., and various subsidiaries, filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. A123 started its business in 2001 seeking to capitalize on the growing use of lithium-ion batteries in transportation and energy systems. According to papers filed with the Bankruptcy Court, the company first began producing commercial batteries in 2006. See Declaration of David Prystash in Support of Chapter 11 Petitions and First Day Motions (hereinafter the "Decl.") at *4. By
In Re Loucheschi LLC, 471 B.R. 777 (Bankr. D. Mass 2012) –
When a lender makes a loan that does not comply with usury laws it runs a risk that not only will interest and charges be disallowed, but also the entire loan may be declared void. In cases where declaring a usurious loan void is discretionary, one might expect a bankruptcy court to be inclined to do so since it could benefit the bankruptcy estate.