Yes, Gathering Agreements Can Be Rejected as Executory Contracts (At Least Under One Court’s Interpretation of Texas Law)
In its recently issued decision in Husky International Electronics, Inc. v. Ritz, a 7-1 majority of the Supreme Court has clarified that intentionally fraudulent transfers designed to hinder or defraud creditors can fall within the definition of “actual fraud” under Section 523(a)(2)(A) of the Bankruptcy Code and can sometimes result in corresponding liabilities being non-dischargeable in a personal bankruptcy proceeding.1
So you are chugging along with a foreclosure action (either on real and/or personal property) only to be stopped in your tracks by the borrower filing a voluntary Chapter 7 bankruptcy petition. The usual, immediate thought is – “better contact our bankruptcy counsel to obtain relief from the automatic stay.” Well, perhaps, or perhaps you might want to contact the Chapter 7 Trustee first (either directly or through your bankruptcy counsel). Why? Maybe the Chapter 7 Trustee would be interested in liquidating that collateral for you though the bankruptcy system.
(Bankr. W.D. Ky. May 17, 2016)
On May 16, 2016, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz, No. 15-145, holding that the "actual fraud" bar to discharge under section 523(a)(2)(A) of the Bankruptcy Code encompasses an individual debtor's knowing receipt of fraudulently transferred property.
Statutory Background
In a favorable ruling to creditors and bankruptcy trustees, SCOTUS issued its ruling yesterday in Husky Int'l Elecs., Inc. v. Ritz (In re Ritz) addressing a circuit split on whether “actual fraud” requires a debtor in bankruptcy to have made a false representation. The 7-1 majority found that “actual fraud” under §523(a)(2)(A) of the Bankruptcy Code to encompass fraudulent conveyance schemes, even when those schemes do not involve a false representation.
On May 10, 2016, the Missouri General Assembly passed the Missouri Commercial Receivership Act (MCRA), providing for significant changes to Missouri’s law on receiverships. Assuming that Governor Nixon signs the bill (which is almost certain), the law will become effective later this year. The significant changes to the Missouri receivership law in the MCRA are as follows:
Either from our prior posts here and here, or from the great posts from Stone and Baxter’s Plan Propon
On May 16, 2016, the Supreme Court of the United States handed down its opinion in Husky International Electronics, Inc. v. Ritz, Case No. 15-145.
On May 10, 2016, the Missouri Commercial Receivership Act (the “Act”) was passed by the Missouri General Assembly as SB 578. The proposed Act provides a complete statutory structure for the appointment of receivers and the administration of receiverships within the state.
Currently, Missouri law regarding receiverships is largely based on case law, in addition to very limited statutory authority. As a result, receivership law can be somewhat confusing and inconsistently applied.