(7th Cir. July 27, 2016)

The Seventh Circuit affirms the bankruptcy court’s order finding that the debtor’s prepetition transfer of a farm to the defendant was a fraudulent transfer subject to avoidance. The debtor transferred the farm in exchange for the defendant’s agreement to abandon litigation he had brought against the debtor. The bankruptcy court found that the debtor did not receive reasonably equivalent value in exchange for the farm. Opinion below.

Per Curiam

Defendant: Pro Se

Attorney for Trustee: Brenda L. Zeddun

An Eleventh Circuit panel recently vacated two district court orders after sending the parties to mediation, and after the parties’ conditioned settlement on vacatur of the orders. In Hartford Casualty Insurance Company v. Crum & Forster Specialty Insurance Company, after being ordered to mediation a second time by the appellate panel, the parties reached a settlement contingent on the district court’s vacating its orders on summary judgment and attorney’s fees.

In Rosenberg v. DVI Receivables XIV, LLC, 818 F.3d 1283 (11th Cir. 2016) (No. 14-14620), plaintiff filed an adversary complaint against defendants under the section of the Bankruptcy Code, 11 U.S.C.

In a prior post, we set forth the potential liability of employers for collection of debts owed by employees in violation of the bankruptcy stay. To protect themselves from such liability, employers that accrue claims against their employees in the ordinary course of business should implement written protocols designed in consultation with bankruptcy counsel.

The power of a bankruptcy court to authorize the sale of assets “free-and-clear” of liens and any other interests is a powerful tool that is used to realize value from distressed businesses. Indeed, purchasers will occasionally insist that sellers file a chapter 11 case in order to “cleanse the assets” by conducting their sale under Bankruptcy Code § 363(b). But how far does this power reach? Can bankruptcy be used to protect the purchaser from potential successor liability claims?

Last week, our post “You Can’t Always Get What You Want” discussed a Texas bankruptcy court decision rejecting efforts by debtor Sam Wyly to claim as exempt a number of offshore private annuities.

In a 9-page opinion issued in the Syntax-Brillian case on July 20, 2016, Judge Kevin J. Carey denied the motion of equity holders in Syntax-Brillian seeking to terminate the Liquidation Trustee (the “Trustee”). A copy of the Opinion is available on the Court’s website: Here.

Recently, in GSE Environmental, Inc. v. Sorrentino (In re GSE Environmental, Inc.), on a motion for judgment on the pleadings, the Bankruptcy Court for the District of Delaware held that the Chief Executive Officer’s claim for unpaid compensation payable in stock constituted an equity security rather than a general unsecured claim.

On July 29, 2016, SLJ Trucking Inc. (“Debtor” or “SLJ”) filed a voluntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. The Debtor is a licensed and bonded freight shipping and trucking company running freight hauling business from Newark, Delaware.

REAL PROPERTY UPDATE