Bankruptcy Law Commons^™

Protecting Valuable Estate Interests Through The Unenforceability Of Ipso Facto Clauses, Kayla Martin

Bankruptcy Research Library

(Excerpt)

A trustee or debtor-in-possession is provided with a plethora of powers under title 11 of the United States Code (the “Bankruptcy Code”). A chapter 13 debtor-in-possession, pursuant to section 1322 of the Bankruptcy Code, may assume or reject any executory contract in connection with its plan. The ability, however, to assume or reject an executory contract is limited by section 365, which in part prohibits the modification or termination of a debtor’s interest in a contractual agreement on the sole basis that the debtor filed for bankruptcy, which is commonly known as an ipso facto provision. This prohibition of …

Savings—The Missing Element In Chapter 13 Bankruptcy Cases?, David R. Jones

Duke Law Master of Judicial Studies Theses

This paper examines the effects of debtor savings on the viability of chapter 13 bankruptcy plans. The paper further examines the impact of lawyer culture, debtor participation in the bankruptcy process and judicial activism on the use of the savings program by chapter 13 debtors. Using a data set of randomly selected chapter 13 bankruptcy cases filed in the Southern District of Texas, the analysis demonstrates that while savings has a direct positive impact on the success of chapter 13 plans, the degree of that success is significantly influenced by the views held by debtors’ lawyers, chapter 13 trustees and …

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, …

Evidentiary Support Needed For Successful Proof Of Claim Against Affiliated Debtors, Madeline Mallo

Bankruptcy Research Library

(Excerpt)

According to title 11 of the United States Code (the “Bankruptcy Code) and the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), a debtor must file schedules of the debtor’s assets and liabilities. A debtor’s schedules would include a list of all known claims against the debtor and list the claims as disputed, contingent or unliquidated.

If an entity believes they have a claim against the debtor that the debtor has not included on a schedule, or the claim is disputed, contingent, or unliquidated, that party can file a proof of claim. A proof of claim in a bankruptcy …

Contractual Provider Agreement Provides For Permissible Government Recoupment, Emily Santoro

Bankruptcy Research Library

(Excerpt)

A debtor healthcare provider without significant resources is unlikely to survive any prolonged disagreement with private or government payors. This challenge may be exacerbated by a debtors’ bankruptcy filing if a payor may refuses to make certain payments owed to the debtor. Therefore, whether a payors’ withholding of funds owed to a debtor hospital is considered an impermissible setoff or a permissible equitable recoupment is crucial.

This memorandum will explore whether a Medicaid/Medicare payor can withhold payments owed to a debtor, or whether such withholding violates the automatic stay. Part A will discuss withholding in healthcare bankruptcy scenarios generally. …

The Persistence Of Bankruptcy Stigma, 26 American Bankruptcy Institute Law Review 217 (2018), Michael D. Sousa

Sturm College of Law: Faculty Scholarship

The debtor-creditor relationship has always been intertwined with notions of morality. Failing to pay one’s financial obligations has traditionally been met with social opprobrium, internal shame, and external stigma. This dynamic did not change with the advent of American bankruptcy law. Indeed, for much of the twentieth-century, scholars have studied and debated whether the stigma associated with filing for bankruptcy has declined over the years, particularly in the 1980s and 1990s when the number of consumer bankruptcy filings increased dramatically. Existing studies suggest that the stigma regarding personal bankruptcy has declined in the latter portion of the twentieth-century.

Using a …

Debt Stigma And Social Class, 41 Seattle University Law Review 965 (2018), Michael D. Sousa

Sturm College of Law: Faculty Scholarship

For as long as creditors have been extending credit to consumer debtors, Western society has stigmatized those individuals who failed to repay their financial obligations or who found themselves swamped by unmanageable debt. Over the past three decades, scholars have studied whether the stigma surrounding indebtedness and bankruptcy has declined or increased in American Society, particularly due to the sharp spike in consumer bankruptcy filings during the 1990s.

These studies have resulted in a general debate over whether debt stigma stills exists in society. Absent from the scholarly literature to date is an exploration of whether debtors from different social …

The Restructuring Plan And The Role Of Foreign Investments In Italian System, Vito Cozzoli, Antonio Morelli

Arbitration Brief

No abstract provided.

The Rise And Fall Of Fear Of Abuse In Consumer Bankruptcy: Most Recent Comparative Evidence From Europe And Beyond, 96 Tex. L. Rev. 1327 (2018), Jason Kilborn

UIC Law Open Access Faculty Scholarship

Prepared for a symposium celebrating the groundbreaking career of Jay Westbrook, this Article examines recent evidence of fear of abuse of the benefits of consumer bankruptcy and the gradual abatement of that fear in modern consumer insolvency law reform. It marshals evidence of a recent and accelerating retreat in both the judicial discretion that Westbrook attributed to lawmakers' fear of abuse and other more direct techniques to avoid abusive recourse to consumer discharge. Fear of abuse appears to be diminishing with accumulated experience as indicated by recent liberalizing reforms in Denmark, Slovakia, Poland, Austria, Russia, and Romania. At the same …

Optimal Deterrence And The Preference Gap, Brook E. Gotberg

Faculty Publications

This Article is the first of its kind to argue that preference law is ineffective as a deterrent of collection behavior based on empirical evidence, drawn from interviews of actors within the field-debtors, creditors, and the attorneys who represented them in bankruptcy proceedings. This Article reports on interviews of sampled individuals who participated in successful 7 Chapter 11 reorganization cases involving preference actions. The overwhelming and indisputable conclusion from these interviews is that creditors may adjust their behavior in response to preference law, but not in ways that further the purported goal of preference deterrence. Accordingly, if preference law is …

Section 704(B)(2) - The Back Door Into Chapter 7 For The Above-Median Debtor, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Battle Of The Bayou: Placing A Receiver In The Right Position During A Bankruptcy Proceeding, Antonio M. Dinizo Jr.

St. Thomas Law Review

Investment Manager, Sam Israel, launched the Bayou Group LLC, a hedge fund, hoping to produce large returns for high net worth investors. After months of losses, it became clear to Israel that Bayou would never garner the types of returns he had promised investors. Instead of altering strategies or closing Bayou, Israel decided to convert Bayou into a Ponzi scheme. When Ponzi schemes fail, they present unique challenges for courts, regulators, creditors, and interested parties. One choice stakeholders will have to make is whether to appoint a receiver to marshal assets and seek a recovery for defrauded investors and creditors, …

A Canadian Lens On Third Party Litigation Funding In The American Bankruptcy Context, Stephanie Ben-Ishai, Emily Uza

Articles & Book Chapters

This Article offers two major recommendations to expand the use of third party litigation funding ("TPLF") into the U.S. insolvency context. As seen in the Canadian context, courts have accepted the use of litigation funding agreements fitting within certain parameters. If U.S. courts follow suit, friction against the implementation of TPLF can be mitigated. Alternatively, regulation may occur through legislative and regulatory models to govern and set out precisely what types of arrangements are permitted. Involving entities such as the SEC may expedite the acceptance of TPLF, but special attention is necessary not to intermingle notions of fiduciaries into the …

Midland Funding V. Johnson And The Pernicious Problem Of Stale-Debt Claims, Kara J. Bruce

Loyola of Los Angeles Law Review

No abstract provided.

The Federal Law Of Property: The Case Of Inheritance Disclaimers And Tenancy By The Entireties, David Gray Carlson

Washington and Lee Law Review

No abstract provided.

Ending Litigation And Financial Windfalls On Time-Barred Debts, Marc C. Mcallister

Washington and Lee Law Review

A trap for unsophisticated debtors, debt collectors often attempt to collect time-barred debts through written offers to settle those debts for a fraction of what is owed. Debtors typically respond to such offers in one of four ways. First, some debtors simply pay the offered settlement amount, usually 10%–40% of the total outstanding debt, thereby satisfying the debt in full. Second, those who wish to eliminate the debt but cannot pay the entire offered settlement amount will instead make a small payment, unwittingly reviving the statute of limitations on collections and making the entire debt judicially enforceable for several years …

Bankruptcy Law—Rethinking The Discharge Of Late Filed Taxes In Consumer Bankruptcy, Justin H. Dion, Barbara Curatolo

Faculty Scholarship

The 2005 amendments to the Bankruptcy Code, Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was enacted in order to improve bankruptcy law. However, BAPCPA has made the issue of whether late-filed taxes are dischargeable even murkier than before the amendments. After BAPCPA, some courts continued to analyze claims as they had before the amendment. Others used a “one-day-late rule” that prevented late-filed taxes from being dischargeable—even if the taxes were filed only one day late. This Article suggests a different approach. It argues that the legislature intended tax debt associated with late-filed income tax returns be dischargeable if the …

Jevic'S Promise: Procedural Justice In Chapter 11, Pamela Foohey

Washington Law Review Online

This piece is a response to Jonathan C. Lipson, The Secret Life of Priority: Corporate Reorganization after Jevic, 93 Wash. L. Rev. 631 (2018).

Jevic'S Promise: Procedural Justice In Chapter 11, Pamela Foohey

Washington Law Review Online

This piece is a response to Jonathan C. Lipson, The Secret Life of Priority: Corporate Reorganization after Jevic, 93 Wash. L. Rev. 631 (2018).

In Memory Of Roderick Glen Ayers, Jr. (1947–2017), Professor Of Law, St. Mary's University School Of Law, Craig A. Gargotta, William R. "Dick" Davis Jr.

St. Mary's Law Journal

On September 27, 2017, Glen Ayers, a former professor at St. Mary’s School of Law, passed away suddenly and unexpectedly. Two St. Mary's alumni—Bankruptcy Judge Craig A. Gargotta (1989) and William R. “Dick” Davis, Jr. (1983)—have provided this tribute to an icon of San Antonio’s bankruptcy bar.