The Bankruptcy Law Firm, Prof. Corp.
U.S. Supreme Court To Review Biden Student Debt Relief Plan In February 2023
Can a president (here President Biden), by executive order, cancel $400 billion dollars of student loan debt? Or can only the US Congress, by legislation passed by US Congress, and signed into law by the President, cancel that $400 billion dollars of student loan debt. The U.S. Supreme Court said Thursday it will hear oral arguments in February 2023 on this issue: Six Republican-led states have sued in federal court, saying that President Biden’s so called “student borrower relief plan” (cancelling $400 billion dollars of student loan debt by an executive order, without legislation passed by the US Congress, allowing…
Avion Funding LLC v. GFS Industries LLC (In re GFS Industries LLC), 22-05052 (Bankr. W.D. Tex. Nov. 10, 2022)
Avion Funding LLC v. GFS Industries LLC (In re GFS Industries LLC), 22-05052 (Bankr. W.D. Tex. Nov. 10, 2022): discusses that there is a “split” (ie disagreement) among Judges as to whether or not a corporation that files Subchapter V of Chapter 11 bankruptcy case can be sued to hold a debt “nondischargeable”, pursuant to 11 USC 523(a)(2), (4) or (6), where the debt is a debt arising from debtor committing fraud, embezzlement, breach of fiducisary duty, or is a debt from debtor committing a “willful and malicious act” (except a Chapter 13 debtor can seek to discharge a “willful…
Masingale v. Muding (In re Masingale), ___BR___ (9th Cir. BAP 11/2/22), appeal 22-1016
Masingale v. Muding (In re Masingale), ___BR___ (9th Cir. BAP 11/2/22), appeal 22-1016; for publication 9th Cir BAP decision is important, because BAP rules that by claiming exemption of ‘100% of FMV’ of asset (usually homestead exemption, but could be something like stock) debtors keep postpetition appreciation in exempt assets. Note that for debtors in California, using California exemptions, this result is the result required by the amended California exemption law, which takes effect for bankruptcy cases filed after 1/21/23.
Tico Construction Co. v. Van Meter (In re Powell)
Tico Construction Co. v. Van Meter (In re Powell), ___BR___ (B.A.P. 9th Cir. Oct. 21, 2022), appeal number 22-1014.9th Cir BAP says debtor has absolute right to dismiss a ch13 case, even if debtor was not eligible to file ch13. I can see some possibilities this ruling could be abused by a debtor who wants the automatic stay, but does not want to be stuck in bankruptcy, so files a Chapter 13 case, knowing debtor is NOT eligible for chapter 13, then later dismisses the Chapter 13 case, after having the bankruptcy automatic stay protecting the debtor for as long…
Smart Capital Investments I LLC v. Hawkeye Entertainment LLC (In re Hawkeye Entertainment LLC), ___F.4th___ (9th Cir. Sept. 23, 2022) appeal no. 21-56264
A Cured Breach Still Invokes Section 365(b)(1)’s Landlord Protections, Ninth Circuit Court of appeals rules Adequate assurance of future performance may not be required if the debtor has already cured the breach of lease, the Ninth Circuit says. If there has ever been a breach of a lease of real property — even if it was cured or was not material — the landlord is still entitled to “adequate protection” or one of the other assurances laid out in Section 365(b)(1), according to the Ninth Circuit. However, “adequate assurance” may not be required if the breach has been cured or…
Mortgage Rates Hit 6.02%, Highest Since the 2008 Financial Crisis
Mortgage rates topped 6% this week [9/15/22] , a jolt to home buyers who last year were paying less than half that. The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis in 2008, when the U.S. was deep in recession. [reported by Wall street Journal on 9/15/22]
Jurist Noted for Bankruptcy Expertise Will Weigh J&J Talc Appeal
Johnson & Johnson’s use of bankruptcy to shift mass talc lawsuits against the company to chapter 11 will meet its most serious test yet before a federal appeals judge whose influential bankruptcy rulings shape one of the nation’s top corporate restructuring hubs, WSJ Pro Bankruptcy reported. Judge Thomas Ambro sits on the three-judge panel that will hear arguments Monday in a Philadelphia courtroom over an emerging corporate restructuring strategy where companies facing mass personal-injury litigation use a Texas law to create a new subsidiary with minimal business operations and make it responsible for tort liabilities before filing for bankruptcy. The…
SB 1099
Description: On August 30th, California Senate Bill 1099 was delivered to Governor Newsom’s desk for signature. NACBA is very proud to be the official sponsor of SB 1099. Join NACBA’s California working group as they walk you through the significant improvements to CA’s bankruptcy exemption laws & how you can apply them for your clients. WHY YOU SHOULD ATTEND: NACBA’s California working group assisted Senator Bob Wieckowski, the bill’s author, in getting these significant improvements to California’s bankruptcy laws. Highlights of SB 1099 that will be discussed include: “Ride through” option restored for vehicles (no more repos for failure to…
In re Klein, ___BR___ (US Bankruptcy Court D. Colo. Aug. 23, 2022) bky case No.17-19106: holds Debtor Retains Appreciation in Nonexempt Property Sold During Chapter 13
Judge Rosania answered a question left open by the Tenth Circuit in Barrera. Answering a question left open by the Tenth Circuit in Rodriguez v. Barrera (In re Barrera), 22 F.4th 1217 (10th Cir. Jan. 19, 2022), Bankruptcy Judge Joseph G. Rosania, Jr., of Denver decided that a chapter 13 debtor retains appreciation in the value of nonexempt property that the debtor owned on the filing date but sold in the course of the chapter 13 case. In Barrera, the Tenth Circuit held that nonexempt appreciation in the value of a home sold after confirmation of a chapter 13 plan…
The federal Consumer Financial Protection Bureau (“CFPB”) Adds New Debt Collection Rule FAQs
Last week, the CFPB published additional frequently asked questions on Regulation F, its debt collection rule. The new FAQs address third-party communications, electronic communications, and unusual or inconvenient time and place provisions. Prohibitions on Third-Party Communications. The FAQs address the following questions: What is the Debt Collection Rule’s general prohibition on third-party communications? Are there exceptions to the general prohibition against third-party communications? Does the general prohibition on third-party communications apply to electronic communications from a debt collector about a debt? Electronic Communications. The FAQs address the following questions: Does the Debt Collection Rule require debt collectors to communicate electronically…