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Taming The Bankruptcy Code's Toothless Tiger, 11 U.S.C. § 521(2), Julio M. Zapata
Taming The Bankruptcy Code's Toothless Tiger, 11 U.S.C. § 521(2), Julio M. Zapata
Washington Law Review
Federal appellate courts are divided on whether a debtor who files a Chapter 7 bankruptcy petition and is current on the underlying contractual obligation secured by collateral is able to retain the collateral without redeeming it or reaffirming the debt under section 521(2) of the Bankruptcy Code. The Fourth and Tenth Circuits hold that the Code's options are not exclusive. Thus, the debtor may retain the collateral and continue under the terms of the contract as long as the payments are current In contrast, the Seventh and Eleventh Circuits hold that a debtor's only options are those listed in section …
Desperate Times And Desperate Measures: The Troubled State Of The Ordinary Course Of Business Defense—And What To Do About It, Lawrence Ponoroff
Desperate Times And Desperate Measures: The Troubled State Of The Ordinary Course Of Business Defense—And What To Do About It, Lawrence Ponoroff
Washington Law Review
The ordinary course of business defense to the bankruptcy trustee's preference avoiding power has been controversial since its enactment in 1978. Burdened with a cryptic legislative history concerning its underlying goals, this preference exception has gone through multiple reinterpretations at the hands of Congress and the U.S. Supreme Court. In recent years, faced with a potentially expansive reading of the ordinary course defense that threatened to eclipse the rule, courts have used the "ordinary business terms" element of the defense to engraft an objective requirement that the party asserting the defense establish conformity of the challenged transfer with prevailing industry …