The Bankruptcy Law Firm, Prof. Corp.
In re Specialty Shops Holding Corp.
In re Specialty Shops Holding Corp.,___F.4th___ (US District Court, District of Nebraska July 24, 2020; case number 18-405): 11 USC 546( c ) allows a creditor, which has sold goods to a debtor, shortly before the debtor files bankruptcy, to reclaim the creditor’s goods from the debtor, where the debtor has failed to pay for the goods. Specialty Shops hold that a creditor doesn’t get the goods back, it only gets a only has a general unsecured claim, if a secured lender already has a lien on the goods sought to be reclaimed, at the time the debtor files bankruptcy.…
American Bankrutpcy Institute E-newsletter of 7/23/20 Reports that Democratic Senators Push Bill Allowing Student Loans to Be Discharged in Bankruptcy, Under Certain Circumstances
Democratic Senators introduced a bill today (7/23/20) that would allow people to cancel student loan debt in bankruptcy if they can show income loss tied to economic fallout from the coronavirus pandemic, the Wall Street Journal reported. The measure from Sens. Sheldon Whitehouse (D-R.I.) and Sherrod Brown (D-Ohio) would allow student loan cancellations for people who either racked up large medical bills in the past three years or lost wages because of the coronavirus fallout. Republicans have expressed concerns that widespread student loan cancellations will cause the cost of higher education to rise, and earlier attempts to ease student loan…
Merriman v. Fattorini (In re Merriman)
Merriman v. Fattorini (In re Merriman), ___BR___ (B.A.P. 9th Cir. July 13, 2020, appeal 19-1245): 9th Circuit BAP holds that the US Supreme Court’s Acevedo opinion, which is viewed as barring federal courts, in most circumstances, from entering orders nunc pro tunc, does NOT bar a Bankruptcy Court from granting an order annulling the bankruptcy automatic stay retroactively (even though doing so is a nunc pro tunc order). In Merriman, the Ninth Circuit Bankruptcy Appellate Panel held that this year’s Acevedo decision from the Supreme Court does not bar bankruptcy courts from annulling the automatic stay. Except in unusual circumstances,…
Bankruptcy Press reports a 26% increase in Chapter 11 bankruptcy filings so far in 2020, over 2019
A 26% increase in Chapter 11 filings so far in 2020 as compared to last year can largely be blamed on the effects of COVID-19, and restructuring professionals say the spike is mirroring trends seen at the beginning of the 2008 financial crisis. Legal services firm Epiq Global released a report this week with data on the number of bankruptcy filings so far this year, revealing commercial restructuring cases are up 26% over 2019 as of the end of June, while the number of bankruptcy cases of all kinds was actually down by a similar margin over last year. The…
U.S. Weekly Jobless Claims Fall; But a Record 32.9 Million People are receiving Unemployment
Benefits, reports American Bankruptcy Institute’s 7/9/20 e-newsletter: New applications for U.S. jobless benefits fell last week, but a record 32.9 million Americans were collecting unemployment checks in the third week of June, Reuters reported. Economists cautioned against reading too much into the drop in weekly jobless claims reported by the Labor Department on Thursday, noting that the period included the July 4 Independence Day. Claims data are volatile around holidays. Large parts of the country, including densely populated states like Florida, Texas and California, are dealing with record spikes of new COVID-19 cases, which have forced a scaling back or…
In re Cherry, ___F.3d ___ (7th Cir. July 6, 2020, appeal number 19-1534)
US Court of Appeals for the Seventh Circuit Requires the Bankruptcy Court to Make Specific Findings for why the Bankruptcy Court is confirming a Chapter 13 plan that contains a plan provision that is expressly allowed by 11 USC 1322(b)—the Bankruptcy Code Section that lists what provisions a Chapter 13 plan may contain. This is a poorly reasoned decision, which, happily, is not what the US Court of Appeals for our Circuit, the 9th Circuit, or the 9th Circuit BAP, or bankruptcy courts in the 9th Circuit, require. There is nothing in 11 USC 1322(b) that would require a Bankruptcy…
Analysis: Retail, Energy Set Grim Bankruptcy Milestones
More U.S. retail companies sought bankruptcy protection in the first half of 2020 than in any other comparable period. Energy filings piled up at the fastest pace since oil prices plunged in 2016, data compiled by Bloomberg show. There have been 75 filings among all companies with liabilities of at least $50 million in the last three months, matching the same period of 2009, the second-worst quarter ever. Signaling more trouble ahead, the universe of issuers with bonds trading at distressed levels expanded for the first time since April. Three retailers filed last week, including Grupo Famsa SAB de CV,…
Seila Law LLC V. Consumer Financial Protection Bureau
The US Supreme Court, on 6/29/20, issues decision that to be constitutional, the President of the United States must be able to fire the Director of the Consumer Financial Protection Bureau (“CFPB”), and that therefore, the CFPB’s present structure is unconstitutional, because under the CFPBs present structure, the President cannot fire the CFPB director. The US Supreme Court rejected the argument that the dodd-Frank Act prohibited the President from firing the CFPB’s director. Overall, this decision is a win for the CFPB, because the decision upholds the rest of the CFPB.
Rockstar Inc. v. Schultz
In Rockstar Inc. v. Schultz,___F.3d___ (9th Cir. June 25, 2020 (not for publication), appeal from BAP to 9th Circuit Court of Appeals #19-60031) and Schultz v. Keyword Rockstar Inc. (In re Schultz) (also not for publication), ___BR___ (B.A.P. 9th Cir. June 4, 2019, appeal to BAP #18-1269), the 9thCircuit Court of Appeals and the 9th Circuit BAP Draw Opposite Conclusions from the Same Testimony. The BAP reversed the Bankruptcy Court trial decision, the 9th Circuit Court of Appeals reversed the BAP. For the 9th Circuit Court of Appeals, scant evidence is enough to uphold the trial court’s findings of fact.…
US Home-Mortgage Delinquencies Surge To The Highest Level In 9 Years
The number of US home mortgage delinquencies has surged to the highest level in nine years as the coronavirus pandemic continues to hit family finances. Total borrowers more than 30 days late surged to 4.3 million in May after a record jump to 3.4 million in April, according to a Monday report from Black Knight. In addition, more than 8% of all US mortgages were either past due or in foreclosure, the report showed. The report also included homeowners that missed payments even though they had forbearance agreements in place, which allow six months of deferral without penalty. Many borrowers…