The Bankruptcy Law Firm, Prof. Corp.
Democrats Press Biden to Extend Freeze on Student Loan Payments
American Bankruptcy Institute on 03/25/22 reports: Democrats in Congress are pressing the Biden administration to extend the suspension of student loan payments before it’s set to expire May 1 as they seek to avoid cutting off a pandemic-induced benefit in the middle of an election year, The Hill reported. The federal student loan payments suspension has already been extended five times throughout the COVID-19 pandemic since it began under former President Trump in March 2020. That means millions of people who owe student loans to the federal government haven’t been required to make payments on their debt in two years,…
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141: Ninth Circuit BAP (Bankruptcy Appellate Panel) holds Debtor Can’t Be Punished for Shifting Legal Theories, to amend exemptions claimed by debtor in debtor’s bankruptcy case, after Bankruptcy Judge rules debtor’s originally claimed exemptions With regard to exemptions, a debtor can’t be punished for dramatically shifting legal theories regarding exemptions claimed, in response to an unfavorable decision by the bankruptcy court. That’s the teaching of a March 25 opinion for the Ninth Circuit Bankruptcy Appellate Panel by Bankruptcy Judge Gary A. Spraker. The opinion…
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022)
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022): The 9th Circuit Bankruptcy Appellate Panel (BAP) ruled that when a claim is subordinated, pursuant to 11 USC §510(b), that any liens and encumbrances securing the claim that is subordinated, are subordinated as well. This is a significant decision, because it means subordination of a claim pursuant to Section 510(b) would also subordinate liens and other encumbrances.
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022)
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022): Second Circuit Court of Appeals is First Appeals Court to Hold that Small Business Administration was allowed to bar bankruptcy Debtors from Receiving PPP Loans On an issue where the lower courts are divided, the Second Circuit became the first court of appeals to rule that a “loan” under the Paycheck Protection Program, “as a matter of law, . . . is a loan guaranty program and not an ‘other similar grant,’ and thus is not covered by [the antidiscrimination…
Lan Tu Trinh v. citizens Business Banking 141 S.Ct. 1412, 2012 WL 666601 (2021)
Lan Tu Trinh v. citizens Business Banking 141 S.Ct. 1412, 2012 WL 666601 (2021): US Supreme Court Won’t Review Court-Appointed Receivers’ Immunity The U.S. Supreme Court will not second-guess whether court-appointed receivers are shielded from liability for their actions thanks to “quasi-judicial immunity,” leaving in place a recent Third Circuit ruling that granted a receiver those protections.
American Bankruptcy Institute reports that a Bill has been introduced in the US Senate on 3/14/22, called “Bankruptcy Threshold Adjustment and Technical Corrections Act”
Introduced by Senator Charles Grassley (R-Iowa). The Bill, S. 3823, if it was passed by Senate, and by House, and if signed into law by President Biden, would permanently set the debt limit at $7.5 million for small businesses electing to file for bankruptcy under subchapter V of chapter 11. Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the bill also would raise the debt limit for individual chapter 13 filings to $2.75 million and remove the distinction between secured and unsecured debt for that calculation.
Sheen v. Wells Fargo Bank, NA, 2022 DJDAR 2345 (California Supreme Court 3/7/22)
Sheen v. Wells Fargo Bank, NA, 2022 DJDAR 2345 (California Supreme Court 3/7/22): In this landmark decision of the California Supreme Court—the highest court in the California State court system, in a decision that is amazingly BAD for property owners, the California Supreme Court held that lenders/loan servicers do NOT owe borrowers a duty of care in the loan modification process. Borrowers seeking loan modifications always had trouble dealing with lenders/loan servicers who were supposed to be processing the loan modification applications submitted to the lenders/loan servicers by the borrowers. Now it will be functionally impossible to get lenders/loan servicers…
Manookian v. Burton (In re Cummings Manookian PLLC), ___BR___ (Bankruptcy Court, M.D. Tenn. March 7, 2022), bankruptcy case no. 21-00797
Bankruptcy Court rules that ‘Reasonable Possibility’ of a Surplus gives a Chapter 7 bankruptcy Debtor Standing in Chapter 7 case, to object to something the Chapter 7 bankruptcy trustee wants the Bankruptcy Court to approve Due process considerations mean it’s not harmless error if a debtor was denied standing improperly. Everyone knows that chapter 7 debtors seldom have standing to object to a trustee’s initiatives in bankruptcy court because they can’t show that the outcome will affect the debtor. But how strong a showing must the debtor make about the likelihood of a surplus to establish standing to object? That’s…
In re Egan Avenatti LLP
In re Egan Avenatti LLP, ___BR___ (Bankr. C.D. Cal. March 3, 2022) bankruptcy case #19-13560: A Bankruptcy Judge in Central District of California Bankruptcy Court issues decision that a party which wants to subpoena a bankruptcy trustee must—pursuant to the “Barton Doctrine” move for and get permission of the Bankruptcy Court to subpoena the Trustee, before subpoenaing the Trustee. Background Someone seeking to issue a subpoena to a trustee is the proper party to seek leave under the Barton doctrine, Judge Clarkson says. However, the Bankruptcy Judge’s decision acknowledges that a 2006 9th Circuit BAP decision In re Media Group,…
In re LTL Management LLC, ___BR___, 21-30589 (Bankr. D.N.J. Feb. 25, 2022)
In re LTL Management LLC, ___BR___, 21-30589 (Bankr. D.N.J. Feb. 25, 2022): Johnson & Johnson Subsidiary Survives a Motion to Dismiss—for being a bad faith bankruptcy filing– the bankruptcy filed by the subsidiary that J& J created, put all the talc claim cancer lawsuits into, and then had subsidiary (LTL Management LLC) filed bankruptcy. J&J created the LTL Management LLC subsidiary, put the talc tort claim suits into the subsidiary, have the subsidiary file bankruptcy and the parent company does NOT file bankruptcy, has come to be referred to as the “Texas 2 Step”, because this procedure was first used…