The Bankruptcy Law Firm, Prof. Corp.
Small Businesses Tackle New PPP Puzzle: Forgiveness
Small businesses that received government-backed loans to ease the pain of the coronavirus pandemic are beginning to turn to a process some say is as complex as getting the money: figuring out whether they have to pay it back, the Wall Street Journal reported. Some small-business owners have spent dozens of hours wading through the 11-page forgiveness application for Paycheck Protection Program loans. Others are trying to determine how or whether legislation President Trump signed earlier this month changes the math. Some lenders say that the government is putting them in a difficult spot by making them responsible for determining…
Blixseth v. Credit Suisse, ___F3d___16-35304 (9th Cir. June 11, 2020): Ninth Circuit 6/11/20 Decision in Blixseth v. Credit Suisse, Now Permits Nonconsensual, Third-Party Releases in Chapter 11 Plans, which is a BIG change in Ninth Circuit law
Aligning with the Third Circuit, the Ninth Circuit says that lower courts were reading its prior decisions too broadly. The Ninth Circuit had been generally understood as categorically banning nonconsensual, third-party releases in chapter 11 plans. Narrowing, if not repudiating, three earlier opinions in a published decision on June 11, the Ninth Circuit explicitly aligned itself with the Third Circuit by permitting nonconsensual, third-party releases in chapter 11 plans that exculpate participants in the reorganization from claims based on actions taken during the case. In her opinion for the appeals court, Ninth Circuit Judge Marsha S. Berzon quoted the Third…
Millions Of Americans Skipping Payments As Tidal Wave Of Defaults, Evictions Looms
reports 6/4/20 Credit & Collection e-newsletter Americans are skipping payments on mortgages, auto loans and other bills. Normally, that could mean massive foreclosures, evictions, cars repossessions and people’s credit getting destroyed. But much of that’s been put on pause. Help from Congress and leniency from lenders have kept impending financial disaster at bay for millions of people. But that may not last for long. The problem is, these efforts aim to create a financial bridge to the future for people who’ve lost their income in the pandemic — but the bridge is only half built. For one thing, the help…
In re Cumbess
In re Cumbess, ___F.3d___ 2020 WL 2897260 (11th Cir. 2020),. In this 6/3/20 published decision, the US Court of Appeals for the Eleventh Circuit holds that if a trustee does not assume a personal property lease before confirmation of a Chapter 13 plan, the leased property is no longer property of the estate and cannot be assumed by the debtor in the confirmed plan on behalf of the estate. No such decision by the Ninth Circuit Court of Appeals, so far. Only time will tell whether Circuit Courts, other than the Eleventh Circuit, will take this same position.
California and additional States Sue US Governement over New Payday Lending Rule
California and additional States Sue US Governement over New Payday Lending Rule (adopted by US Government on 6/2/20) that Makes Payday Lenders NOT subject to “cap” on the (extremely high) interest rates the Payday Lenders can charge consumers on unsecured loans, so Long as the Payday Lender “partners” with a Bank: Trying to stop the cycle of unsophisticated borrowers getting trapped in a recurring cycle of debt, multiple states have imposed regulations on payday lenders in recent years – regulations that will no longer apply to some lenders under a new Trump administration rule. California, Illinois and New York sued…
Big Bankruptcies Sweep the U.S. in Fastest Pace Since May 2009
In the first few weeks of the pandemic, it was just a trickle: Companies like Alaskan airline Ravn Air pushed into bankruptcy as travel came to a halt and markets collapsed. But the financial distress wrought by the shutdowns only deepened, producing what is now a wave of insolvencies washing through America’s corporations. In May alone, some 27 companies reporting at least $50 million in liabilities sought court protection from creditors — the highest number since the Great Recession. They range from well-known U.S. mainstays such as J.C. Penney Co. and J. Crew Group Inc. to air carriers Latam Airlines…
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…