News
Biden Administration Will Provide Debt-Relief Measures
American Bankruptcy Institute (ABI) reports that the Biden administration will provide debt-relief measures for more than 12,000 financially distressed farmers, Bloomberg News reported. The U.S. Department of Agriculture will temporarily suspend past-due debt collections and foreclosures for farmers borrowing under two major loan programs administered by the Farm Service Agency, administration officials said. The measure is designed to help farmers hit by the coronavirus pandemic and economy’s slump with about 10% of borrowers qualifying. “USDA and the Biden Administration are committed to bringing relief and support to farmers, ranchers and producers of all backgrounds and financial status, including by ensuring…
Supreme Court Holds that Merely Holding Property Isn’t a Stay Violation
On 1/14/21, in City of Chicago v. Fulton___S.Ct___ case 19-357 (US Sup. Ct. 2021), the US Supreme Court ruled NO STAY VIOLATION by a creditor continuing to hold onto debtor’s property, after debtor files bankruptcy, which the creditor got possession of lawfully, before the debtor filed bankruptcy. Here is the ABI discussion of the case: Justices rule that affirmative action is required before withholding property amounts to controlling estate property and results in an automatic stay violation. Reversing the Seventh Circuit and resolving a split among the circuits, the Supreme Court ruled unanimously today “that mere retention of property does…
Famous People Who Have Filed Bankruptcy
Credit & collection newsletter of 1/13/21 reports on famous people who have filed bankruptcy. Here is one report: Movie director Francis Ford Coppola filed for his second bankruptcy case in 1992, with assets listed at $52 million and liabilities at $98 million, according to the New York Times. He blamed the majority of his debt on the failure of the movie “One From The Heart,” which cost $27 million to film but earned only $4 million.
America Bankruptcy Institute (“ABI”) summarizes New Bankruptcy Relief Provisions, that are contained in the 2021 Federal Appropriations Act
The new Consolidated Appropriations Act of 2021 (the “Act”), which was signed into law on Dec. 27, 2020 (H.R. 133), includes within its 5,593 pages a number of new bankruptcy relief provisions for businesses as part of what the legislation calls the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Additional bankruptcy relief provisions are found in a miscellaneous section of the Act. A summary of the relief provisions (including PPP loans becoming available to certain debtors, treatment of commercial real estate leases and preference amendments). Here is a summary of the relief provisions that will affect businesses,…
More Than Half of Emergency Small-Business Funds Went to Larger Businesses, New Data Shows
More than half of the money from the Treasury Department’s coronavirus emergency fund for small businesses went to just 5 percent of the recipients, according to data on more than 5 million loans that was released by the government yesterday evening in response to a Freedom of Information Act request and lawsuit, the Washington Post, on 12/2/20, reported.
On 12/17/20, the American Bankruptcy Institute (“ABI”) reports that US Congress and White House Race to Finish $900 Billion Covid-19 Aid Package
US House and Senate, and the White House face a rapidly approaching deadline to wrap up negotiations on another coronavirus relief bill, racing today to complete the details of the roughly $900 billion package and pass it through Congress before the end of the week, the Wall Street Journal reported. Top Republicans and Democrats are closing in on a relief package that would send another direct check to many Americans, enhance unemployment benefits, provide aid to small businesses and fund the distribution of the Covid-19 vaccine, among other measures. Because they are planning to approve a relief bill alongside a…
American Bankruptcy Institute on 11/25/20 published the following UPDATE ON PROPOSED EXTENSION OF THE PPP LOAN PROGRAM
With a change in administration likely within the next two months, and Congress scrambling to agree on another rescue package for millions of Americans facing yet more pandemic related economic hardship as many of the government subsidies and stimulus plans are set to expire the end of December, Senators Rubio and Collins have revamped S. 4321 initially introduced on July 27, 2020 (“Initial Proposed PPP III Legislation”),1 which would (finally) make the Payroll Protection Program loans (“PPP Loans”) available to debtors in bankruptcy. The PPP expired in early August 2020, and S. 4321 became bogged down in neverending partisan politics,…
Issue: Is Inaction of Creditor an Automatic Stay Violation?
On October 13, 2020, the US Supreme Court heard oral argument on City of Chicago v. Fulton, 19-357 (Sup. Ct. 2020), to resolve the Circuit split on whether a creditor who legally took possession of property of the debtor, prepetition, violates the bankruptcy automatic stay if the creditor does not return the property to the debtor, as soon as the debtor files bankruptcy. Supreme Court to resolve a circuit split by deciding whether a change in the status quo must occur before the automatic stay is violated. The Supreme Court heard oral argument this morning in City of Chicago v.…
Nearly 11 Million Households Missed Mortgage Or Rent Payments At Pandemic’s Outset
Nearly 11 million households fell behind on their mortgage or rent payments during the first three months of the COVID-19 pandemic, according to a new study by the Mortgage Bankers Association’s Research Institute for Housing America (RIHA). Meanwhile, 30 million people missed at least one student loan payment. The report contains data from an internet panel survey specially tailored to study the impact of the pandemic on rent, mortgage and student loan payment patterns. It found that the sudden onset of the pandemic led to abrupt job losses and reductions in hours worked. “However, federal government stimulus programs and employees…
U.S. Corporate Bankruptcy Filings at 10-Year High as COVID-19 Pandemic Inflicts Economic Pain
U.S. corporate bankruptcies are on their way to hitting a decade-long high, underlining the economic pain inflicted by the COVID-19 pandemic and efforts to limit the disease’s spread, MarketWatch.com reported. Total bankruptcies announced by U.S. companies so far this year stand at 470, the most for any comparable year-to-date period since 2010, according to S&P Global Market Intelligence. S&P’s analysis took into account both public and private companies with public debt. Most of the bankruptcies were concentrated in retail, energy and manufacturing, with larger defaults such as J.C. Penney and Chesapeake Energy occurring exclusively in these industries. Analysts say many…