Trade creditors often face the issue of whether they are required to continue providing goods or services on credit to a customer that has filed chapter 11 bankruptcy. Unfortunately, the Bankruptcy Code fails to specifically address the rights and obligations of a trade creditor facing this dilemma, resulting in a tug-of-war created by the debtor’s need for continued goods and services and the creditor’s need for assurance of payment.

The Bankruptcy Code is federal law. It affords debtors protections - including the automatic stay and debt discharge injunction - that hold creditors at bay.

The Fair Debt Collection Practices Act (“FDCPA”) is also federal law. It contains limitations on what a debt collector can do when attempting to collect a debt.

Because debts - and more particularly attempts to collect those debts - drive people into bankruptcy, bankruptcy courts are sometimes forced to grapple with questions of how the Bankruptcy Code and FDCPA interact and impact each other.

A “structured dismissal” of a chapter 11 case following a sale of substantially all of the debtor’s assets has become increasingly common as a way to minimize costs and maximize creditor recoveries. However, only a handful of rulings have been issued on the subject, perhaps because bankruptcy and appellate courts are unclear as to whether the Bankruptcy Code authorizes the remedy.

Law360, New York (July 17, 2015, 11:24 AM ET) -- On June 26, 2015, the U.S. District Court for the Middle District of Florida issued an opinion on consolidated appeals arising from the Bayou Shores SNF LLC bankruptcy case with potentially broad implications for health care bankruptcy cases. At the heart of the dispute before the district court was whether the bankruptcy court had jurisdiction to enjoin the termination of, and subsequently authorize the assumption of, certain Medicare and Medicaid provider agreements.

Desperate times call for desperate measures.  It is not surprising then that a less than scrupulous debtor might be less than candid when disclosing assets and liabilities to a bankruptcy court.  But what happens if an individual debtor is discovered to have concealed assets – possibly fraudulently or in bad faith – and then seeks to exercise his or her statutory right under the Bankruptcy Code to exempt all or a portion of the discovered assets from being available to satisfy creditors?  Can a bankruptcy court in that circumstance look to the bad acts of the debtor as a basi

The U.S. Court of Appeals for the Fourth Circuit recently reversed the dismissal of a Chapter 13 bankruptcy debtor’s complaint filed in federal district court alleging that defendants foreclosed on and sold the debtor’s home in violation of the automatic stay, holding that the federal district court had subject matter jurisdiction and the complaint adequately stated a plausible claim for relief under 11 U.S.C. § 362(k).

The District Court for the Central District of California recently held that an assignee that acquired rights to a terminated swap agreement was not a "swap participant" under the Bankruptcy Code and, therefore, could not invoke safe harbors based on that status to foreclose on collateral in the face of the automatic stay. ^[1] The court ruled that the assignee acquired only a right to collect payment under the swap agreement, not the assignor's rights under the Bankruptcy Code to exercise remedies without first seeking court approval.

Background

Scheme Hot Topics Bulletin: Part III Schemes vs Chapter 11 June 2015 Using the key features of our case study below, we compare schemes and Chapter 11 proceedings on the following grounds: ■ jurisdiction (filing requirements and crossborder recognition); ■ moratorium; ■ scope, i.e. which creditors can be included in (or excluded from) the relevant proceedings; ■ control; ■ new money; ■ cramdown; ■ valuation; ■ third party releases; ■ disclosure; ■ market impact; ■ timing and costs; and ■ special Chapter 11 rules on oil & gas interests.

Section 303 of the Bankruptcy Code provides creditors with a mechanism to force a recalcitrant debtor into bankruptcy through the filing of an involuntary petition for relief. Pursuant to this section, an involuntary bankruptcy case may be commenced only under Chapter 7 or 11 of the Bankruptcy Code, and may only be brought against a person otherwise qualified to file a voluntary petition. Where the purported debtor has fewer than 12 creditors, the involuntary petition need only be filed by a single creditor.

The Bankruptcy Code prevents an individual debtor from discharging certain debts, including, upon request of the creditor, debts for “fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). The Seventh Circuit recently confirmed in Stoughton Lumber Co., Inc. v. Sveum, No.