In In re Golden Sphinx Ltd., 2023 WL 2823391 (Bankr. C.D. Cal. Mar. 31, 2023), the U.S. Bankruptcy Court for the Central District of California denied a motion filed by a creditor of a chapter 15 debtor seeking discovery from a bank that had provided financing to one of the debtor's affiliates.

As the cannabis industry matures, there will be winners and losers. Losers lack access to the U.S. Bankruptcy Code. Marijuana related assets cannot be sold free and clear of liens and encumbrances via the tried and true bankruptcy section 363 sale, which leaves the loser’s creditors without the best tool to maximize the value of the loser’s assets, and deprives acquirers of a federal court order conveying assets. What’s the state of play, and what’s the alternative for the losers, their creditors, and the companies that would acquire them?

STATE OF PLAY

There are few things as daunting to a vendor or supplier as its counterparty’s bankruptcy. The likelihood of a significantly discounted recovery for goods and services provided and potential loss of a customer may have long-lasted impacts on profitability. Even worse, however, is the prospect that payments received in good faith prior to a debtor’s bankruptcy filing may be at risk of recoupment. In this alert, we address the risk that such payments are voidable as preferential transfers.

On July 14, the U.S. Court of Appeals for the Ninth Circuit partially affirmed and partially reversed a district court’s dismissal of an FDCPA suit. The district court reviewed plaintiff’s claims under the FDCPA, which alleged that defendants violated the bankruptcy court’s order discharging his debt and knowingly filed a baseless debt collection lawsuit.

The U.S. Bankruptcy Court for the Southern District of Florida created a three-factor test to help determine the ownership interests of social media accounts. The court in In re Vital Pharm[1] found that (1) documented property interests, (2) control over access, and (3) use, each play a role in establishing ownership over social media accounts.

On June 30, the Supreme Court ruled that the Biden administration did not have authority to forgive student loans under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act). Despite this defeat, the Biden administration is still working to reduce the burden of student loans. Advocates for student loan relief argue that student loans can be a crushing form of debt in part because of their treatment in bankruptcy. It is the common belief that student loans, unlike other forms of unsecured debt, are not dischargeable in bankruptcy.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of July 17, 2023.

In re Patacsil, 2023 WL 3964908 (Bankr. E.D. Cal. June 9, 2023)

We have previously discussed the growing list of judicial decisions addressing the appropriate remedy for overpayment of U.S. Trustee (“UST”) quarterly fees. In U.S. Tr. Region 21 v. Bast Amron LLP (In re Mosaic Mgmt. Grp., Inc.), No. 20-12547, 2023 WL 4144557 (11th Cir.

The confluence of the COVID-19 pandemic, high inflation, and increased borrowing costs culminated in countries incurring record levels of debt.[1] Despite this global debt crisis, there is currently no comprehensive set of rules or body of law to govern the restructuring of sovereign debt.