The Bankruptcy Law Firm, Prof. Corp.
US Senate Bill Would Ban Garnishment Of Relief Funds By Debt Collectors
A bipartisan group of senators have introduced legislation to prevent debt collectors from garnishing coronavirus relief payments from consumers. Sens. Sherrod Brown, D-Ohio, Ron Wyden, D-Ore., Chuck Grassley, R-Iowa, and Tim Scott, R-S.C., have sponsored legislation that would bar private debt collectors from garnishing the “recovery rebates” that were provided to consumers through the Coronavirus Aid, Relief, and Economic Security Act. “Congress came together to pass the CARES Act, which provided money to help working families pay for food, medicine, and other basic necessities — it’s not for debt collectors,” Brown, the top Demcorat on the Senate Banking Committee, said…
ISL Loan Trust v. Millennium Lab Holdings II, 19-1152 (Sup. Ct.)
ISL Loan Trust v. Millennium Lab Holdings II, 19-1152 (Sup. Ct.): US Supreme Court Denied Petition for Certiorari, in an appeal in a Chapter 11 bankruptcy case, which asked US Supreme Court to decide issues of Equitable Mootness and Third-Party Releases. Denied on 5/26/20. The US Supreme Court said it denied the petition for certioraria because the case from the Third Circuit was not a good vehicle for granting certiorari on either issue, even though there is a circuit split on nonconsensual, third-party releases. The US Supreme Court declined to the case, even though the decision on appeal from the…
Bird v. Hart, ___BR___ (US District Ct, District of Utah May 19, 2020) case number in District Court 19-54
Bird v. Hart, ___BR___ (US District Ct, District of Utah May 19, 2020) case number in District Court 19-54: US District Court, hearing bankruptcy appeal, affirms bankruptcy court decision that asset is automatically abandoned back to the chapter 7 bankruptcy debtor, from the bankruptcy debtor’s chapter 7 “bankruptcy estate”, by the bankruptcy case being closed, IF debtor listed that asset anywhere in the debtor’s bankruptcy documents. This is a more “debtor friendly” decision than the more narrow rule, which is that an asset is automatically abandoned back to the chapter 7 bankruptcy debtor, from the bankruptcy debtor’s chapter 7 “bankruptcy…
In re Thu Thi Dao, ___BR___ (Bankr. E.D. Cal. May 11, 2020, docket number 20-20742)
In re Thu Thi Dao, ___BR___ (Bankr. E.D. Cal. May 11, 2020, docket number 20-20742): Bankruptcy Judge Christopher Klein Takes Sides on a Circuit Spilt Coming to the US Supreme Court, regarding whether automatic stay that expires per 11 USC 362( c )(3)(A)—stay expires 30 days into second case ongoing for debtor within a 1 year period–expires only as to debtor’s property, or also expires as to property of the debtor’s “bankruptcy estate” American Bankruptcy Institute says Judge Klein’s opinion reads like an amicus brief urging the Supreme Court to grant ‘cert’ and resolve a circuit split by taking sides…
Potential Wave of U.S. Bankruptcies Draws Nearer as Corporate Distress Spreads
For many troubled companies, like luxury retailer Neiman Marcus Group Inc., which filed today, the lockdown to blunt the COVID-19 coronavirus super-charged the effects of pre-existing problems like debt overloads and the inability to please fickle consumers. For others, the debt they rack up while the pandemic rages may prove insurmountable once the health threat is over, Bloomberg News reported. “Everyone’s distressed watch list has become so big that it doesn’t even make sense to call it a watch list — it’s everyone,” said Derek Pitts, head of debt advisory and restructuring at PJ Solomon, which tracks the financial well-being…
Pillars v. General Motors LLC (In re Motors Liquidation Co.), 18-1954 (US Court of Appeals for the Second Circuit, May 6, 2020)
A mistake by a lawyer isn’t “deliberate” and therefore can’t be a judicial admission. Joining three other circuits, the Second Circuit held that a lawyer’s mistake in a pleading doesn’t amount to a judicial admission making the client liable when the client would have been free from liability had the lawyer quoted the correct document. The opinion is a hornbook explication of what is or is not a judicial admission. Among other things, a judicial admission must be “deliberate.” Evidently, a lawyer’s mistake is not “deliberate,” thus extricating the lawyer from the specter of malpractice. The appeal arose in the…
Housing Market Faces Its Next Crisis as May Rent and Mortgages Come Due
While aggressive federal and state intervention and temporary corporate measures have prevented a surge in evictions and foreclosures, the housing and rental market has fallen into a severe crisis that threatens the ability of millions of Americans to stay in their homes even if the coronavirus pandemic eases in the coming months, the Washington Post reported. [as reported in 5/4/20 American Bankruptcy Institute e-newsletter]
State Bank of Southern Utah v. Beal (In re Beal), 19-2043 (Bankr. D. Utah March 31, 2020)
Warning that attorneys must file bankruptcy adversary proceedings before the deadline for doing so runs, lack of expertise using Court e-filing system (CM/ECF) is not an excuse for missing deadline: State Bank of Southern Utah v. Beal (In re Beal), 19-2043 (Bankr. D. Utah March 31, 2020) Bankruptcy Judge R. Kimball Mosier of Salt Lake City dismissed an adversary proceeding complaint that was 16 minutes late because the plaintiff’s lawyer waited to file until the last minute and then encountered problems in navigating the Court e-filing system. The plaintiff’s lawyer made his appearance in a consumer’s chapter 7 case. He…
Bankruptcy Code’s Small Business Reorganization Act Debt Limit is Increased to $7,500,000 for One Year, by the CARES Act that is part of US Legislation to Combat the Covid 19 Pandemic
In February 2020, the Small Business Reorganization Act of 2019 (“SBRA”), also known as Subchapter V of Chapter 11 of the Bankruptcy Code, went into effect. The SBRA includes a number of provisions that make Chapter 11 reorganization quicker, cheaper and more effective for businesses with total debts under $2,725,625. The recently enacted CARES Act, designed to aid businesses suffering the effects of the coronavirus, increases the debt limit to $7,500,000 for one year, which will enable a far greater number of companies to take advantage of the SBRA
Five Big Banks Suspend Mortgage Payments
Five of the nation’s largest banks have agreed to temporarily suspend residential mortgage payments for people affected by the coronavirus, California Gov. Gavin Newsom said Wednesday. The announcement came as Newsom provided yet another grim statistic about the economic devastation from the virus: 1 million Californians have filed for unemployment benefits since March 13 as businesses shut down or dramatically scaled back because of a statewide “stay-at-home” order to prevent the spread of the virus. Meanwhile, Newsom said California is rapidly expanding its supply of equipment for health care workers and hospital beds in anticipation of the expected surge in…