Supreme Court to Resolve Circuit Split on Interpretation of Discharge Exception

Pursuant to Section 727 of the U.S. Bankruptcy Code, an individual Chapter 7 debtor may receive a discharge "from all debts that arose before the date of the order for relief under this chapter." A Chapter 11 or Chapter 13 debtor may receive similar relief pursuant to Sections 1141 and 1328(b), respectively. Under any chapter, this discharge serves the Bankruptcy Code's principal goal of relieving a debtor from his or her prepetition obligations and providing the debtor with a "fresh start" on emergence from bankruptcy.

Economists are renowned for their uncanny inclination to see dark clouds on a sunny day. Restructuring professionals tend to fall into the same camp; we’re no Pollyannas when it comes to forming views on business conditions. Perhaps working extensively with challenged companies tends to skew our outlook.

Since May, we’ve followed Solus v. Perry, a New York County Supreme Court case originally filed in July of 2012. The case centered around whether Perry entered into a binding oral agreement to sell Solus a participation interest in a $1.6 billion claim against Bernie Madoff’s bankruptcy estate.

“Claims arising from securities of a debtor’s affiliate should be subordinated” to all other “senior or equal” claims in the debtor’s bankruptcy case, held the U.S. Court of Appeals for the Second Circuit on Dec. 14, 2015. In re Lehman Brothers Inc., 2015 WL 8593604, at *3 (2d Cir. Dec. 14, 2015).

Starting January 1, 2015, all new and existing limited liability companies formed in Florida must comply with the Revised Limited Liability Company Act, Fl. Stat. § 605 (the “Act”). While the Act is based on the Revised Uniform Limited Liability Company Act of 2006, as amended in 2011, promulgated by the Uniform Law Commission, the Act is different in many respects. 

As we end one of the slowest years for corporate bankruptcy filings, all indicators point to the fact that filings should heat up in 2016. Bankruptcy can be extremely disruptive to clients; however, the following tips may help your clients that could find themselves creditors, or debtors, in the new year.

The Buzz of Burgeoning Bankruptcy Filings

In yesterday’s edition of the Weil Bankruptcy Blog, we introduced 

In its decision in Lazzo v. Bank (In re Schupach Investments, L.L.C.), 2015 WL 6685416 (10^th Cir. 2015), the Tenth Circuit sent a clear message to attorneys representing debtors-in-possession: make sure you have authority to represent the debtor if you want to be compensated from the estate.