(Bankr. E.D. Ky. Sep. 15, 2017)
The bankruptcy court denies the lender’s motion to dismiss the Chapter 11 bankruptcy. The lender argued that the party signing the debtor’s petition did not have the requisite authority to commence a bankruptcy case for the debtor. The bankruptcy court finds that amendments to the debtor’s operating agreement were made for the sole purpose of eliminating the debtor’s ability to file for bankruptcy without the lender’s consent. The court finds this violates Federal public policy and the provisions are unenforceable. Opinion below.
Judge: Schaaf
(Bankr. S.D. Ind. Sep. 14, 2017)
The bankruptcy court grants the university’s motion for summary judgment, determining that the student loan debt is nondischargeable. The debtor filed the adversary proceeding alleging repayment would present an undue hardship. The debtor did not respond to the university’s motion and failed to present any evidence to satisfy the Brunner test. Opinion below.
Judge: Carr
Attorney for Debtor: Eric C. Redman, Redman Ludwig PC
Attorney for University: Constantine Alexander Hortis, Maryland Attorney General
Few words in real estate transactions inspire as much fear as "time is of the essence." If a closing date or other deadline is time-is-of-the-essence (TOTE), neither party can postpone the closing or extend the deadline without the other party's consent. So if a buyer is unable to timely close (often because they are unable to obtain financing) and the seller is unwilling to postpone the closing, the buyer may forfeit its security deposit and lose a valuable business opportunity. The consequences for failing to meet a TOTE closing are harsh and seemingly unavoidable.
Avoiding a fraudulent transfer to the Internal Revenue Service (“IRS”) in bankruptcy has become easier, or at least clearer, as a result of a recent unanimous decision by a panel of the Court of Appeals for the Ninth Circuit, Zazzali v. United States (In re DBSI, Inc.), 2017 U.S. App. LEXIS 16817 (9th Cir. Aug. 31, 2017).
The U.S. Court of Appeals for the Ninth Circuit recently affirmed final judgments against corporate borrowers and guarantors in three separate cases, holding that:
(a) the Nevada statute limiting the amount of the deficiency recoverable in a foreclosure action was preempted by federal law as applied to transferees of the Federal Deposit Insurance Corporation (FDIC);
(b) the plaintiff bank had standing to enforce the loans it acquired from the FDIC;
(c) the bank was not issue-precluded from showing that the subject loans had been transferred to it;
In In re Hungry Horse, LLC, Adversary Proceeding No. 16-11222 (Bankr. D. N.M. September 20, 2017) (“Hungry Horse”), the New Mexico Bankruptcy Court reminded us that many U.S. Supreme Court opinions can be limited in scope and do not necessarily dispose of all potential remedies to an issue.
The Bankruptcy Code prohibits a chapter 13 debtor from modifying a mortgage lien on the debtor's principal residence. Even in situations in which a secured creditor fails to file a proof of claim or otherwise participate in the bankruptcy proceeding, the Bankruptcy Code allows a secured creditor's lien on a primary residence to pass through the bankruptcy unaffected. However, a recent decision from a bankruptcy court in Texas illustrates the risks to secured creditors of blind reliance on these statutory protections.
Last week, in Assured Guaranty Corp. v. Fin. Oversight and Mgmt. Bd. for Puerto Rico, No. 17-1831, 2017 U.S. App. LEXIS 18387 (1st Cir., Sept. 22, 2017), the U.S. Court of Appeals for the First Circuit issued a noteworthy decision in the Puerto Rico quasi-bankruptcy proceedings. Overturning the district court’s ruling, the Court of Appeals held that the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), 48 U.S.C.
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