Recent Cases
SEC v. Jarkesy, 144 S. Ct. 2117, 219 L. Ed. 2d 650 (June 27, 2024)
SEC v. Jarkesy, 144 S. Ct. 2117, 219 L. Ed. 2d 650 (June 27, 2024): This 6/27/24 US Supreme Court case is NOT a bankruptcy case, but it clarifies several previous US Supreme Court decisions that are bankruptcy decisions, including previous US Supreme Court Granfinanciera case on when is there a right to jury trial, and including previous US Supreme Court cases on bankruptcy court’s jurisdiction/lack of jurisdiction, ie Northern Pipeline, and Stern v Marshall. Jaresky is important because Jarekesy makes clear there is NO right to a jury trial in the claims-allowance process in bankruptcy. However, Jaresky does reconfirm…
US Banks Warn of Disaster and Brace for Higher Delinquencies Despite Rate Cut Expectations
US Banks Warn of Disaster and Brace for Higher Delinquencies Despite Rate Cut Expectations, reports 7/29/24 Credit & Collection e-newsletter: Some of the largest United States banks are bracing themselves for some significant losses coming out of their portfolio of personal loans and credit cards as indicated by their financial reports covering the second quarter of 2024. JPMorgan Chase, one of the country’s largest banks set aside nearly $1.2 billion from its revenues to raise its loan loss provision to a staggering amount of $3 billion. They are not alone in this initiative as other big financial institutions like Bank…
In re LTL Management LLC,___F.4th___ (3d Cir. Court of Appeal, 7/25/24), appeal 23-2971
The US Court of Appeal for the Third Circuit quickly dismissed J&J’s second Chapter 11 bankruptcy case. The Third Circuit’s decision dismissing J&J’s second Chapter 11 bankruptcy case (filed by a subsidiary corporation that J&J created for the purpose of filing the second Chapter 11 bankruptcy case) is very clear that bankruptcy cannot be used to deal with mass tort cases filed in non-bankruptcy courts (here the thousands of tort cases filed in nonbankruptcy court alleging that J&J talc caused female cancers), where there is only an “attenuated possibility of insolvency” in the future. The ‘attenuated possibility of insolvency’ in…
Many of America’s 60-Year-Olds Are in Financial Peril
A bruising recession and the disappearance of pensions have left many young baby boomers (people born after world war II ended and up to 1964), who are now 60 or more years old, financially exposed, reports a Wall Street Journal 7/24/24 article. Born in a midcentury, postwar America brimming with promise, many of the youngest boomers are still sporting financial bruises from the 2007-09 recession and are adversely affected by the nation’s steady shift away from guaranteed pensions. “The most important things for me right now are a place to live indoors, water and food,” said one of these Boomers,…
Banks are Bracing for Consumers to Stop Paying Off Their Credit Cards
Banks are Bracing for Consumers to Stop Paying Off Their Credit Cards, reports Credit & Collection e-newsletter on 7/24/24 With interest rates sitting at more than two-decade highs and inflation continuing to bear down on consumers, big banks are preparing to face more risks from their lending practices. In the second quarter, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all raised their provisions for credit losses from the prior quarter. These provisions are the money that financial institutions set aside to cover any potential losses from credit risk, including delinquent or bad debt and lending, like commercial real…
U.S. Senate Bill Aims to Curb Texas Two-Step Bankruptcies
The American Bankruptcy Institute (“ABI”) reports that on 7/23/24, U.S. Senators introduced a bipartisan bill yesterday that would deter so-called Texas two-step bankruptcies, saying that wealthy companies should not be able to stop lawsuits by dumping their liabilities into a bankrupt shell company, Reuters reported. Sens. Sheldon Whitehouse (D-R.I.) and Josh Hawley (R-Mo.) introduced the “Ending Corporate Bankruptcy Abuse Act of 2024” that would prevent financially healthy companies from evading “responsibility for injuries they caused” or bog down consumers in lengthy bankruptcy proceedings, they said in a statement. “Large corporations on solid financial footing — like Johnson & Johnson and…
Two Bankruptcy Court Decisions
Two Bankruptcy Court decisions– Parlement Technologies Inc., 24-10755, 2024 BL 240417, 2024 WL 3417084 (Bankr. D. Del. July 15, 2024), and Coast to Coast Leasing LLC v. M&T Equipment Finance Corp. (In re Coast to Coast Leasing LLC), 24-00172 (Bankr. N.D. Ill. July 17, 2024) hold that the US Supreme Court Harrington v Purdue Pharma, LP (“Purdue”) decision–which holds that the Bankruptcy Code does NOT allow a Bankruptcy Court to confirm (approve) a Chapter 11 bankruptcy plan which grants nonconsensual releases to non-debtors—does NOT prohibit a Bankruptcy Judge from granting a preliminary injunction stopping lawsuits against nondebtors from proceeding. Both…
Wike v. State Bar of Nevada (In re Wike), __ BR__ (9th Cir. BAP 7/3/24), case 23-1179, about Dischargeability of Disciplinary Costs.
Wike v. State Bar of Nevada (In re Wike), __ BR__ (9th Cir. BAP 7/3/24), case 23-1179, about Dischargeability of Disciplinary Costs. But though the 9th Circuit BAP can complain about the US Supreme Court Kelly v. Robinson decision–which held criminal restitution is nondischargeable per 11 USC 523(a)(7)—complaining is all BAP, or even Circuit Courts, can do, because US Supreme Court decisions are binding on all Courts in the United States A decision from the Ninth Circuit Bankruptcy Appellate Panel is emblematic of courts inveighing against Kelly v. Robinson, 479 U.S. 36 (1986), where the Supreme Court held that criminal…
Henry v. Collection Professionals Inc., 23-00721 (N.D. Ill. June 17, 2024)
Harvey v. Collection Professionals Inc., __ F.Supp.4th__ (US District Ct, N.D. Ill 6/1724): Another case in the “Circuit Split” about whether claims by a debtor, pursuant to Bankruptcy Code section 11 USC 524(a) (violation of bankruptcy discharge by creditor), which seek to have a creditor held in contempt, because the creditor allegedly violated the debtor’s bankruptcy discharge, can be brought in US District Court, or whether such contempt claims, alleging violation of the debtor’s bankruptcy discharge, can only be brought in bankruptcy court. Claims. Circuits are split on whether claims for contempt of the discharge injunction must be brought in…
Ivanov v. Van’s Aircraft Inc. (In re Van’s ARicraft Inc.) , ___ BR (Bankruptcy Court Oregon 6/11/24)
Ivanov v. Van’s Aircraft Inc. (In re Van’s ARicraft Inc.) , ___ BR (Bankruptcy Court Oregon 6/11/24): An additional bankruptcy judge holds that in a Sub V Chapter 11 case filed by a corporation, that creditors can bring adversary proceedings seeking to hold corporate debts nondischargeable. Bankruptcy Judge refusted to follow the 9th Circuit BAP (Bankruptcy Appellate Panel) which had previously ruled that when a corporation files Sub V Chapter 11 bankruptcy, that debts of the corporation cannot be held nondischargable, even if those debts were for the corporation debtor having committed fraud, intentional misrepresentation, larceny, breach of fiduciary duty…