News
Revision of Certain Dollar Amounts in the Bankruptcy Code
(Effective April 1, 2016) – Source: 81 Fed. Reg. 8748-01, 2016 WL 684261 (Feb. 22, 2016) Affected sections of Title 28 U.S.C. and the Bankruptcy Code Dollar amount to be adjusted New (adjusted) dollar amount1 28 U.S.C.: Section 1409(b)—a trustee may commence a proceeding arising in or related to a case to recover (1)—money judgment of or property worth less than $1,250 $1,300 (2)—a consumer debt less than $18,675 $19,250 (3)—a non consumer debt against a non insider less than $12,475 $12,850 11 U.S.C.: Section 101(3)—definition of assisted person $186,825 $192,450…
In re Tapang
In re Tapang, 540 B.R. 701 (Bankr. N.D. Cal. 2015): the U.S. Bankruptcy Court for the Northern District of California determined that a 5% interest rate on the secured creditor’s claim met the standards set forth in Till v. SCS Credit Corporation, 541 U.S. 465 (2004) ("Till") for confirmation of the debtor’s chapter 11 plan, by "cramdown" on the secured creditor who voted to reject the Chapter 11 plan. Facts: The Tapang case concerned the limited question of the rate of interest required for the debtor to cram down her proposed plan of reorganization on a dissenting secured creditor, 523…
Ninth Circuit Rules That Debtor’s Insider Can Sell Claims to Friendly Third Parties and Garner Critical Acceptance Votes on Its Plan
U.S. Bank N.A. v. The Village at Lakeridge, LLC (In re The Village at Lakeridge, LLC), ___F3d___, 2016 WL 494592 (9th Cir. Feb. 8, 2016). Earlier this month, the Ninth Circuit ruled that an insider can sell its claim to a friendly third party, whose vote fulfills Bankruptcy Code section 1129(a)(10)’s requirement of an impaired consenting class, unless the third party has a close relationship with the debtor and negotiated the claim purchase at less than arm’s length.
Fed Interest Rate Countdown Begins Amid Deluge Of Data
Thursday, 9/17/15, is D-Day for the Federal Reserve to come to a decision on whether to increase interest rates. And the nation’s central bank, which keeps insisting its decision is dependent on incoming economic data, will have to sort through an onslaught of data points before it goes public with its decision Sept. 17 at 2 p.m. ET. The Fed is weighing its first rate hike since 2006. The Janet Yellen-led Fed has emphasized that its decision-making is data-dependent. Well, recent U.S. data on jobs, the pace of economic growth, the health of the economy’s services sector and sales of…
COMMENTARY: Supreme Court Denies Law Firm Payment for Defending Right to be Paid
On 6/16/15, the US Supreme Court issued its decision in Baker Botts, LLP v. ASARCO, LLC. The US Supreme Court had granted certiorari to decide the issue of: “whether Sect. 330(a)(1) permits a bankruptcy court to award attorneys’ fees for work performed in defending a fee application.” By a vote of 6-3, with US Supreme Court Justice Thomas writing for the majority, the US Supreme Court held that Bankruptcy Code section 11 USC 330(a) does not give bankruptcy courts the discretion to award fee-defense fees under any circumstances. The Court reasoned that the plain text of the statute, which only…
Debt Collection Report Captures Horror Stories
A new report by the Center for Responsible Lending has revealed what many consumers have known for years. Debt collectors often cross the line with abusive behaviors. From coercive language to outright lies about debt to forged documents, federal and state regulator investigations into debt buyers and debt collectors revealed a pattern of abuses prevalent within the industry. Recent investigations have forced debt collectors to pay tens of millions of dollars in fines for multiple instances of illegal activity. The report comes as several state legislatures are considering legislation to put in place new rules-of-the-road for debt collectors to protect…
US Supreme Court rules on 6/1/15 that Chapter 7 debtors CANNOT lienstrip a junior lien, even if that junior lien is completely under water, meaning there is not even $1 of equity available to pay the junior lien, after the senior lien(s) are paid in full
The U.S. Supreme Court on June 1, 2015, unanimously held in Bank of America, N.A. v. Caulkett that a chapter 7 debtor cannot "strip off" even a totally underwater mortgage under § 506(d), reversing the Eleventh Circuit. In so holding, the Court not only reaffirmed but extended its controversial decision in Dewsnup v. Timm, 502 U.S. 410 (1992), in which the Court had held that a chapter 7 debtor cannot "strip down" a partially underwater mortgage under § 506(d). Many observers had thought — especially after oral argument in Caulkett — that the Court might take this opportunity to overturn…
Supreme Court Backs Power of Bankruptcy Judges in Wellness Decision
On 5/26/15, the U.S. Supreme Court ruled, in Wellness International Network Ltd v. Sharif, that bankruptcy judges have the power to make final judgments in certain disputes if everyone involved consents to the arrangement, the Wall Street Journal reported today. In a 6-3 ruling, the Court reversed a Seventh Circuit finding that the bankruptcy court didn’t have the constitutional authority to decide whether certain property belonged to the bankruptcy estate because the dispute also involved state law issues. Justice Sonia Sotomayor, writing for the court, said that bankruptcy courts can be the final arbiter of disputes so long as those…
The Supreme Court issued a unanimous opinion in HARRIS v. VIEGELAHN
The Supreme Court issued a unanimous opinion, on 5/18/15, in HARRIS v. VIEGELAHN, in favor of the debtor and holding that debtor is entitled to return of any post-petition wages not already disbursed by the chapter 13 trustee, when debtor converts debtor’s ch 13 case to ch 7, and the ch 13 trustee is holding plan payments paid to trustee by debtor to fund plan, which Trustee has not yet distributed to the creditors.
Ninth Circuit Court of Appeals Made a Ruling in Favor of Debt Collection Industry
On May 12, 2015, the Ninth Circuit Court of Appeals ruled 3-0 in favor of the credit and collection industry in the case of Kubler Corporation, dba Alternative Recovery Management v. Diaz, 14-55235 (9th Cir., May 12, 2015). The issue on appeal was the district court’s decision that California law does not permit a creditor without a contractual interest provision to claim and collect interest prior to a court awarding prejudgment interest. The Ninth Circuit held that California law can entitle a creditor to interest even without a prior judgment. Consequently, the court found that the collection agency did not…