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The Third Circuit Requires Inequitable Conduct By A Higher-Priority Creditor To Equitably Subordinate Its Debt To A Lower-Priority Creditor, Caitlyn R. Marino
The Third Circuit Requires Inequitable Conduct By A Higher-Priority Creditor To Equitably Subordinate Its Debt To A Lower-Priority Creditor, Caitlyn R. Marino
Bankruptcy Research Library
(Excerpt)
Title 11 of the United States Code (the “Bankruptcy Code”) implements a basic priority system under section 507 to determine the order a bankruptcy court will distribute the assets of an estate. The classic hierarchy begins with secured creditors, then “[s]pecial classes of creditors, such as those [holding] certain claims for taxes or wages . . . [then] low-priority creditors, including general unsecured creditors . . . [followed by] equity holders . . . [who] receive nothing until all previously listed creditors have been paid in full.” Section 510(c) of the Bankruptcy Code authorizes disturbing the fundamental distribution scheme …
Domestic Support Obligation Not Necessarily A First Priority Claim, Gabrielle Pullo
Domestic Support Obligation Not Necessarily A First Priority Claim, Gabrielle Pullo
Bankruptcy Research Library
(Excerpt)
During distribution of the proceeds of a debtor’s estate, creditor claims and expenses are paid in a specific order of priority pursuant to title 11 of the United States Code (the “Bankruptcy Code”). Domestic support obligations, which include monies owed to or recoverable by a spouse, former spouse, child of the debtor, or such child’s parents, are entitled to be paid first. Typically, these types of claims are first priority regardless of whether they are filed by the persons to whom they are owed or by a governmental unit on behalf of such persons. However, this top tier priority …
Distribution Of Property Overseen By Family Courts Will Not Bar Constructive Fraudulent Transfer Claims, Allyson Rivard
Distribution Of Property Overseen By Family Courts Will Not Bar Constructive Fraudulent Transfer Claims, Allyson Rivard
Bankruptcy Research Library
(Excerpt)
In general, a transfer made by a debtor may be avoided under title 11 of the United States Code (the “Bankruptcy Code”) or applicable state law, if the transfer was actually or constructively fraudulent. Actual fraudulent transfer claims require a showing of actual intent to hinder, delay, or defraud creditors. Constructive fraudulent transfer claims do not require proof of actual intent. Instead, a transfer will generally be constructively fraudulent if it is shown that (1) the debtor was insolvent at the time of, or rendered insolvent by, the transfer and (2) so long as the debtor received “less than …
Exercising Dominion And Control; An Initial Transferee’S Liability For Avoidable Transfers, Shelley Fredericks
Exercising Dominion And Control; An Initial Transferee’S Liability For Avoidable Transfers, Shelley Fredericks
Bankruptcy Research Library
(Excerpt)
Under section 550(a)(1) of the Bankruptcy Code, a bankruptcy trustee may collect the full amount of an avoidable transfer from the initial transferee of a fraudulent or avoidable transfer. Specifically, it provides that, “[e]xcept as otherwise provided in this section, to the extent that a transfer is avoided…the trustee may recover, for the benefit of the estate, the property transferred or…the value of such property, from the initial transferee of such transfer or the entity for whose benefit such transfer was made.” This section of the Bankruptcy Code gives power to bankruptcy trustees seeking to collect improperly transferred funds, …
Confirmed Bankruptcy Plan Supersedes Applicable Finra Rules, Derek Piersiak
Confirmed Bankruptcy Plan Supersedes Applicable Finra Rules, Derek Piersiak
Bankruptcy Research Library
(Excerpt)
In the United States, the Financial Industry Regulatory Authority (“FINRA”) is authorized by the SEC to adopt and administer the Uniform Practice Code (“UPC”), the rules governing secondary market securities transactions. UPC Rule 1140 determines which unitholders are entitled to a distribution by setting a record date and an ex-date. The record date is the date fixed by the issuer for the purpose of determining which holders of securities are entitled to receive dividends or other distributions. A debtor can also set a record date in their bankruptcy plan. The ex-date is set by FINRA and is “the date …
Gifting & The Absolute Priority Rule, Brianna Walsh
Gifting & The Absolute Priority Rule, Brianna Walsh
Bankruptcy Research Library
(Excerpt)
The absolute priority rule sets forth a hierarchical scheme for the distribution of proceeds obtained through liquidating the assets of a debtor. The scheme provides that property of an estate shall be distributed to secured creditors, then to administrative and priority unsecured creditors, then to unsecured creditors, and lastly to equity holders. Under Chapter 11, section 1129(b)(2)(B)(ii) for a dissenting class of impaired creditors, a plan is “fair and equitable” only if the allowed value of such creditors claims are paid in full, or the holder of any claim or equity that is junior to the dissenting creditors will …