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Impact Of Covid-19 On Debtor’S Obligations To Comply With Duties To Pay Rent, Joseph Diorio
Impact Of Covid-19 On Debtor’S Obligations To Comply With Duties To Pay Rent, Joseph Diorio
Bankruptcy Research Library
(Excerpt)
Under section 365(d)(3) of title 11 of the United States Code (the “Bankruptcy Code”), a debtor-in-possession is required to “timely perform all the obligations of the debtor . . . arising from and after the order for relief under any unexpired lease of nonresidential real property until such lease is assumed or rejected, notwithstanding section 503(b)(1) of this title.” Section 365 was implemented to relieve landlords from the burden of proving the rent payments owed by the debtors prior to rejection were “actual and necessary” costs of preserving the bankruptcy estate. Section 365 has been heavily litigated since early …
Bankruptcy Courts Are Divided On Reducing A Debtor’S Obligation To Pay Rent When Government Regulations Restrict A Debtor’S Ability To Generate Income, Brittany M. Clark
Bankruptcy Courts Are Divided On Reducing A Debtor’S Obligation To Pay Rent When Government Regulations Restrict A Debtor’S Ability To Generate Income, Brittany M. Clark
Bankruptcy Research Library
(Excerpt)
Many indoor retail establishments and restaurants that faced shutdowns due to the COVID-19 pandemic (the “Pandemic”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), and subsequently requested rent abatement under § 365(d)(3) of the Bankruptcy Code or state law. Notwithstanding the unique and extreme circumstances caused by the Pandemic, not all bankruptcy courts agree on the extent to which judges have the discretion to grant abatement motions for rent payments that are otherwise due under § 365(d)(3). Some bankruptcy courts have granted debtors the ability to defer post-petition …
In Re Minter-Higgins, Deanna Scorzelli
In Re Minter-Higgins, Deanna Scorzelli
Bankruptcy Research Library
(Excerpt)
A Chapter 7 trustee cannot recover from the debtor, through a turnover motion, postpetition transfers that were made out of the debtor’s bank account that resulted from pre-petition checks and debit expenditures that were not transferred by the bank to the payees until after the debtor filed for bankruptcy. The § 362(b)(11) exception from the automatic stay insulates a consumer debtor from the trustee’s attempt to require her to “turnover” these amounts.
The Irs Can Offset Post-Petition Tax Overpayments Against Pre-Petition Tax Liabilities, Kyle J. Tumsuden
The Irs Can Offset Post-Petition Tax Overpayments Against Pre-Petition Tax Liabilities, Kyle J. Tumsuden
Bankruptcy Research Library
(Excerpt)
In bankruptcy cases, creditors have the powerful right of “setoff,” i.e., the right to “net” or cancel payments. The right to set off usually arises in cases of mutual debt obligations where a debtor owes a debt to a creditor who in turn owes a unilateral debt back to the same debtor. The rationale for the right to setoff it obvious, as it allows the parties to apply their mutual debt obligations against each other, “thereby avoiding the absurdity of making A pay B when B owes A.” In other words, the court will reduce the two competing judgments …
The Effect Of Conversion On A Post-Petition Lender’S Superpriority Claim Over A Chapter 7 Trustee’S Post-Conversion Administrative Expense Claim, Michael Foster
The Effect Of Conversion On A Post-Petition Lender’S Superpriority Claim Over A Chapter 7 Trustee’S Post-Conversion Administrative Expense Claim, Michael Foster
Bankruptcy Research Library
(Excerpt)
The Bankruptcy Code provides a priority scheme that dictates the order in which claims are to be paid. Generally, secured claims get paid out first. Secured claims are followed by administrative expense claims, which include expenses incurred for administration of the estate, such as professional fees of the trustee, attorney, or accountant employed by the estate, and certain taxes. These claims are then followed by other priority unsecured claims, and finally general unsecured claims. The amount of the distribution that a creditor will receive in a bankruptcy case depends on numerous factors, including the total number of other creditors …
Priority Treatment Of Employee Severance Compensation Claims, Eric Small
Priority Treatment Of Employee Severance Compensation Claims, Eric Small
Bankruptcy Research Library
(Excerpt)
When a bankrupt company terminates employees, those former employees often have claims against the estate for severance compensation. Sections 507(a) and 503(b)(1)(A) of the Bankruptcy Code provide for the priority treatment of such claims. Those sections apply to claims arising both pre-petition and post-petition. In the pre-petition context, courts must determine if a claim was earned within the pre-petition period prescribed by section 507(a)(4). For post-petition claims, whether such claims are given administrative expense priority for the full amount claimed turns on courts’ analysis of when the claims were earned, when services were rendered, and if and when the …