Landlords contemplating terminating a lease with a distressed tenant in advance of a possible tenant bankruptcy will want to consider carefully a recent decision from the Seventh Circuit. The decision, In re Great Lakes Quick Lube LP, reversed and remanded a bankruptcy court decision in favor of a landlord.

My spouse and I visited Chicago years ago, and confusedly started driving the wrong way down a one-way street.  We were promptly pulled over by one of the Windy City’s finest.  I gave him my best smile, and said, “Sorry, officer, we’re from out of town.”  He grunted, “Don’t they have one-way streets where you come from?”  But he didn’t give us a ticket.  A recent disciplinary opinion out of Oklahoma, involving a tech-challenged bankruptcy lawyer, brings the story to mind.

E-filing woes bring bankruptcy court discipline

A Chicago bankruptcy court declined to dismiss the Chapter 11 case of a “bankruptcy remote” limited liability company even though the debtor failed to obtain the unanimous consent of its members as required by its operating agreement. See In re Lake Mich. Beach Pottawattamie Resort, LLC, Case No. 15bk42427, 2016 Bankr. LEXIS 1107 (Bankr. N.D. Ill. April 5, 2016).

(Bankr. S.D. Ind. Apr. 8, 2016)

The bankruptcy court addresses whether certain tax penalty claims are dischargeable. The court finds certain penalties are dischargeable because they arose out of tax returns filed outside the three-year window provided in 11 U.S.C. § 523(a)(7). However, other penalties were not dischargeable because they arose out of a tax return filed within the three-year window. Opinion below.

Judge: Carr

Attorney for Debtors: Camden & Meridew, P.C., Julie A. Camden

Practitioners generally identify “excusable neglect” as the standard that bankruptcy courts apply in determining whether to allow a creditor’s untimely proof of claim. A creditor who lets the bar date pass finds itself in the undesirable position of having to persuade the bankruptcy court that its neglect to file a timely proof of claim was excusable.

(7th Cir. Apr. 5, 2016)

When is a claim contingent? When is a claim subject to a bona fide dispute and who has the burden of proof? When is a claim against a person? When is a claim too small to count? When is an alleged debtor generally not paying his debts as they come due? Are we there yet?

(Bankr. S.D. Ind. Apr. 8, 2016)

The bankruptcy court rules that the government’s claim for penalties incurred by the debtor for false representations in unemployment benefit applications are not dischargeable. The debtor conceded that the debt for repayment of benefits was not dischargeable but disputed that the penalties imposed were dischargeable. The court finds that the penalties arose out of the fraudulent representations and thus were not dischargeable pursuant to 11 U.S.C. § 523(a)(2). Opinion below.

Judge: Lorch

Section 105(a) of the Bankruptcy Code acts as the Bankruptcy Code’s equitable backstop, empowering bankruptcy courts to “issue any order, process, or judgment that is necessary or appropriate to carry out [its] provisions” and to, “sua sponte, take[e] any action or mak[e] any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.” Does section 105(a), though, authorize

As we previously reported here at the Weil Bankruptcy Blog, in Burberry Limited and Burberry USA v.