State governments can be creditors of individuals, businesses and institutions that are debtors in bankruptcy in a variety of ways, most notably as tax and fine collectors but also as lenders. They can also be debtors of debtors, in their role, for example, as the purchasers of vast quantities of goods and services on credit. And they can also be transferees of a debtor’s property in (at least) every role in which they can be creditors.

In July 2016, Joy Denby-Peterson purchased a Chevrolet Corvette. When she defaulted on one of her car payments a few months later, the Corvette was repossessed by her lender. Denby-Peterson then filed a voluntary petition under Chapter 13 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey and demanded the lender return the Corvette. When the lender refused, she filed a motion for an order compelling turnover of the Corvette and imposing sanctions for an alleged violation of the automatic stay.

Successful bankruptcy cases typically end with a court order releasing a debtor from liability for most pre-bankruptcy debts. This order, generally known as a “discharge order,” prohibits the debtor’s creditors from trying to collect on those now-discharged debts. See 11 U.S.C. § 524(a)(2). But it is not always clear which debts are covered by a discharge order. Some pre-bankruptcy debts are exempted from discharge by the Bankruptcy Code.

A court in New York has allowed offshore debtors to take control of an investment account in the U.S. over the objection of a shareholder. At stake was the court’s discretion to permit chapter 15 debtors to access the funds and to transfer them outside the U.S. The shareholder asserted that its interests weren’t fully protected, but the court ruled that on balance the debtors’ need for the money outweighed the shareholder’s concerns.

The Third Circuit denied a $275 million break-up fee to a bidder that was unsuccessful in its attempt to buy the crown-jewel assets in the high-profile EFH bankruptcy case. In re Energy Future Holdings Corp., No 18-1109, 2018 U.S. App. LEXIS 25945 (3rd Cir. Sept. 13, 3018). The court held that the bidder’s efforts didn’t result in a benefit to the debtors’ estates.

Our January 22 post discussed “a long-running issue concerning the treatment of trademark licenses in bankruptcy” and its resolution in the January 12 decision of the First Circuit in Mission Product Holdings, Inc. v. Tempnology, LLC.[1] On May 17, the U.S.

Back in the day--say, the last two decades of the twentieth century--we bankruptcy lawyers took it largely on faith that the right structural and contractual provisions purporting to confer bankruptcy-remoteness[1] were enforceable and likely to be successful in preventing an entity from becoming, voluntarily or involuntarily, a debtor under the Bankruptcy Code.

In Levin v. Verizon Bus. Global, LLC (In re OneStar Long Distance, Inc.), 2017 U.S. App. LEXIS 18374 (7th Cir. Sept. 22, 2017), the Seventh Circuit recently addressed a situation where a debtor sought to reduce a creditor’s new value defense in a preference avoidance action.

In United States v. Yalincak, No. 11-5446 (2nd Cir. Apr. 10, 2017) (Calabresi, Raggi, Lynch), the Second Circuit addressed a complicated issue of appellate procedure in the course of a decision on the law of restitution. Specifically, the Court weighed in on when a district court’s order crediting a defendant funds against his restitution obligations becomes a final, appealable order that cannot be revisited by the district court.

“Messrs. Woods and Wu are fraudsters,” Judge Christopher S. Sontchi declared in the opening salvo of his scathing opinion. According to the former Chief Judge of the U.S. Bankruptcy Court for the District of Delaware, Woods and Wu fraudulently obtained a Paycheck Protection Program (“PPP”) loan on behalf of Urban Commons Queensway, LLC, which indirectly operates the Queen Mary, a cruise ship turned hotel docked near Long Beach, CA.