On June 11, 2015, the United States Bankruptcy Court for the District of New Jersey recognized that a condominium association’s lien is entitled to a limited six-month priority over a first mortgage.
“Smokey, this is not ‘Nam. This is [bankruptcy]. There are rules.”
– Walter Sobchak, The Big Lebowski (as modified)
Breach or termination? In most cases involving the rejection of an unexpired lease where the debtor is the lessee, whether a rejection constitutes merely a “breach,” as stated in section 365(g) of the Bankruptcy Code, or a “termination” is largely academic – the debtor vacates the premises, and the lessor files a prepetition claim for rejection damages. The debtor and its landlord may argue about the
A chapter 13 debtor sought a court determination that a mortgage loan was unsecured because there was a small typo in her name when the mortgage was indexed. The mortgagee brought a motion to dismiss for failure to state a claim.
Applicable state law included the following provisions:
The Supreme Court has not handled its recent major bankruptcy decisions well. The jurisdictional confusion engendered by its 2011 decision in Stern v.
Amended rules governing the issuance, service, and enforcement of periodic garnishments will go into effect on Oct. 1, 2015. The amendments will, among other changes, provide much needed protection to garnishees from the imposition of a default or default judgment resulting from administrative or ministerial errors and will also streamline the periodic garnishment process.
The U.S. Supreme Court has issued its opinion in Baker Botts v. Asarco, holding that professionals retained in bankruptcy cases cannot receive compensation for the costs of defending their fee applications. Even if you aren’t a bankruptcy professional, there are two things to keep in mind about this opinion. First, it won’t stop us restructuring professionals from doing our jobs. Second, the reality of commercial bankruptcy practice is often at odds with the pure textual analysis favored by the Supreme Court.
In an opinion issued on June 1 in a case entitled Bank of America, N.A. v. Caulkett, the United States Supreme Court answered a question that has split lower courts since the Supreme Court decided Dewsnup v. Timm in 1992. The question answered in Caulkett was whether a debtor in a Chapter 7 bankruptcy case can “strip off” a lien on the debtor’s property if the bankruptcy court determines that the lien is worthless, leaving the former secured creditor with an unsecured claim that can be discharged. The Supreme Court’s answer is no.
Introduction
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.