Celsius Networks (“Celsius”) became the latest cryptocurrency platform to raise market temperatures by halting all withdrawals, swaps and transfers from and between its customers’ accounts on June 12, 2022. Celsius touted a next wave of “unbanking,” operating a lending platform allowing the holders of digital assets the opportunity to earn a significantly high returns on those assets.
In a decision approved for publication, addressing the intersection of New Jersey Court Rule 4:5-4 and 11 U.S.C. 524(a), the New Jersey Appellate Division recently held that a bankruptcy discharge precluded a creditor from obtaining a judgment of personal liability and debtor’s failure to plead that defense did not waive it. Vadim Chepovetsky and Svetlana Nashtatik v. Louis Civello, Jr. , No. A-0476-21 (App. Div. Jun. 16, 2022).
Background
As noted in our prior Alerts, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which became law March 27, 2020, included various COVID-19 pandemic-related bankruptcy relief provisions which sunsetted on Saturday, March 27, 2021, but were extended by the “COVID-19 Bankruptcy Relief Extension Act of 2021” (“2021 Extension Act”) through March 27, 2022. By the President’s June 21, 2022, signature of the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “BTATC Act”), Pub. L. No. 117-151, ___ Stat.
In a decision rendered on June 6, 2022, Justice Sotomayor authored the Supreme Court’s unanimous decision in the case Siegel v. Fitzgerald, holding that a statutory increase in United States Trustee’s fees violated the “uniformity” requirement of the Bankruptcy Clause set forth in Article I, § 7, cl. 4 of the United States Constitution, which empowers Congress to establish “uniform Laws on the subject of Bankruptcies throughout the United States.”1
Overview
A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.
A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.
The Bankruptcy Protector
As inflation and interest rates rise, a recession is likely coming. A recession means more bankruptcy filings. Providers of goods and services often unknowingly find themselves embroiled in bankruptcy litigation if the provider received payment within 90 days of the customer’s bankruptcy filing. Such payments, called a preferential transfer, may later be challenged by the debtor customer or trustee. If successful, the provider of goods and services may be forced to return such payments to the bankruptcy estate.