Filing for bankruptcy is one of the most challenging experiences you can ever have. In fact, the things that happen before bankruptcy – calls from debt collectors, receiving garnishments, and the fear of losing your investments including your home and your car – can drive anyone to physical and mental exhaustion.

Last year, Burr & Forman lawyers won a decisive victory in the Eleventh Circuit, in the case of In re Failla, 838 F.3d 1170 (11th Cir. 2016). In Failla, the Eleventh Circuit held that a debtor who files a statement of intention to “surrender” his or her house in bankruptcy may not oppose the secured creditor’s foreclosure proceeding in state court. Failla is a significant victory for secured creditors for two primary reasons. First, the Eleventh Circuit interpreted the meaning of “surrender,” as used in 11 U.S.C.

Our Delaware Corporate and Alternative Entity Law attorneys closely follow the opinions coming from Delaware’s Supreme Court and Court of Chancery. Our 2017 Year to Date Review is a collection of brief summaries of selected cases concerning Delaware Corporate and Alternative Entity Law. While this list is a selection of important cases, our intent is to provide our readers with the rationale behind a court’s holding to ultimately provide information that may be helpful in strategic and business decisions concerning litigation and commercial arrangements.

The Bottom Line

Summary

The Worker Adjustment and Retraining Notification (WARN) Act in the U.S. requires that employers give sixty days’ notice to its employees before effecting a mass layoff.

Late last week, the United States Supreme Court said that it erred when it granted certiorari to resolve a bankruptcy dispute over whether state or federal law should apply to the recharacterization of debt. In In re Province Grande Olde Liberty, LLC, the Fourth Circuit affirmed the judgment of the bankruptcy court and district court, both of which had relied on the Bankruptcy Code to recharacterize a debt from a secured claim to a capital investment. The high Court took the matter up in June presumably to address the current circuit split on the issue.

The U.S. Court of Appeals for the Sixth Circuit recently affirmed a bankruptcy court’s order granting the debtors’ motion to compel the trustee to abandon their home as property of the estate because it had little equity and thus little value for unsecured creditors.

A copy of the opinion is available at: Link to Opinion.

Third Circuit holds that State-specific protections in favor of oil and gas producers did not apply under Article 9 of the UCC

Recently, in Gupta v. Quincy Medical Center, 858 F.3d 657 (1st Cir. 2017), the U.S. Court of Appeals for the First Circuit clarified the limits of the bankruptcy courts’ subject-matter jurisdiction over civil proceedings. The decision, authored by Judge Lipez and joined by retired Supreme Court Justice David Souter (sitting by designation), provides a thorough analysis of the bankruptcy courts’ jurisdiction in such cases.