EIGHTH CIRCUIT BANKRUPTCY MONITOR
The Supreme Court of Missouri recently held that a trial court abused its discretion by certifying an overly broad class with a class representative whose claims against the debt collector defendant were not typical of the class.
Two recent federal court decisions establish that managers of financially troubled Missouri limited liability companies do not owe a fiduciary duty to creditors of their troubled enterprises. Imperial Zinc Corp. v. Engineered Products Industries, L.L.C., No. 4:14-CV-1015-AGF, 2016 WL 812695 (E.D. Mo. Mar. 2, 2016); Imperial Zinc Corp. v. Engineered Products Industries, L.L.C., No. 4:16-CV-551-RWS, 2016 W 6611129 (E.D. Mo. Nov. 9, 2016).
Missouri’s new receivership statute became effective on August 28, 2016. The new statute, called the Missouri Commercial Receivership Act (or “MCRA”) and codified at Chapter 515 of the Missouri Revised Statutes, provides a much more robust receivership remedy than prior law.
Chapter 12 of the Bankruptcy Code, enacted in 1987, provides relief to family farmers facing financial distress. Chapter 12 is available exclusively for family farmers that want to reorganize their financial affairs. While Chapter 12 was very popular in the first few years after its enactment, the number of Chapter 12 cases decreased after the farm economy stabilized. Nevertheless, hundreds of Chapter 12 cases are still filed every year in the United States.
The Missouri Commercial Receivership Act (MCRA), passed by the Missouri legislature and just signed into law by Governor Nixon, becomes effective Aug. 28, 2016. It expands, clarifies and fleshes out the existing minimal receivership statute. The MCRA (Sections 515.500 through 515.665 of MO Senate Bill No. 578) outlines a new standardized system for receivership administration under the auspices of the Missouri courts.
On May 10, 2016, the Missouri Commercial Receivership Act (the “Act”) was passed by the Missouri General Assembly as SB 578. The proposed Act provides a complete statutory structure for the appointment of receivers and the administration of receiverships within the state.
Currently, Missouri law regarding receiverships is largely based on case law, in addition to very limited statutory authority. As a result, receivership law can be somewhat confusing and inconsistently applied.
On May 10, 2016, the Missouri General Assembly passed the Missouri Commercial Receivership Act (MCRA), providing for significant changes to Missouri’s law on receiverships. Assuming that Governor Nixon signs the bill (which is almost certain), the law will become effective later this year. The significant changes to the Missouri receivership law in the MCRA are as follows:
Yesterday, the Office of the Comptroller of the Currency closed BC National Banks, headquartered in Butler, Missouri, and appointed the FDIC receiver.
Yesterday, the Department of Insurance, Financial Institutions & Professional Regulation of the Missouri Division of Finance closed Champion Bank, headquartered in Creve Coeur, Missouri, and appointed the FDIC receiver.