Bankruptcy Law Commons^™

Circumstances In Which A Fee Is An Excise Tax Entitled To Priority, Valerie Hammel

Bankruptcy Research Library

(Excerpt)

Title 11 of the United States Code (the “Bankruptcy Code”) enumerates several categories in which claims are entitled to receive priority. Indeed, Section 507(a)(8)(E) grants governmental units priority on obligations that are “excise tax[es] on a transaction.” The Bankruptcy Code, however, does not define the universe of circumstances necessary to fall within the excise tax priority category. Governmental units therefore spend considerable efforts litigating to ensure that their claims are granted priority under the Bankruptcy Code. Ultimately, the success of a claim will hinge on how narrowly or broadly a court interprets Section 507(a)(8)(E). Part I of this memorandum …

Uncertainty In The Gap Period: The Dangers Of Doing Business With An Alleged Debtor, Daniel Ishoo

Bankruptcy Research Library

(Excerpt)

Section 303 of the Bankruptcy Code allows creditors to initiate an involuntary case against a debtor by filing a petition with the court. Although the provisions applied to an involuntary case and a voluntary case are largely the same, one major difference surfaces in an involuntary case—the existence of what is commonly referred to as the “gap period.” The gap period is the period between the filing of an involuntary petition and a Judge’s entry of an order for relief.

Pursuant to § 303(f) of the Bankruptcy Code, the debtor may continue to operate during the gap period as …

Conflicts Counsel Is Not A Cure All; It Does Not Overcome An Actual Conflict Of Interest, Stephanie Kenn

Bankruptcy Research Library

(Excerpt)

The Sixth Amendment of the Constitution guarantees the right to assistance of counsel. With this right comes many nuances, including the right of an individual to obtain counsel of his or her choice in civil matters if they choose to engage in such matters. The lawyer-client relationship is a fiduciary one and it carries many responsibilities on the attorney’s part. For example, a lawyer must provide “undivided loyalty” to his or her clients. This means that a lawyer must be aware of any conflicts of interest that may arise in the ordinary course of business. Lawyers must take the …

Adversary Proceeding Not Required For Bankruptcy Courts To Determine Lien Status, Justin Korenblatt

Bankruptcy Research Library

(Excerpt)

In Wells Fargo Bank, N.A. v. AMH Roman Two NC, LLC, the Fourth Circuit denied Wells Fargo’s motion to set aside an order canceling its mortgage because the motion was not timely. In 2002, Wells Fargo extended a mortgage to the debtors on a property in Pendleton, North Carolina. Two years later, debtors refinanced the property with PNC Bank. Although PNC fully repaid Wells Fargo’s loan, Wells Fargo allowed the debtors’ line of credit to remain open, and permitted the debtors to take advances totaling over $300,000. Then, in 2012, debtors filed voluntary petitions for relief under chapter …

Application Of The Federal Rule Of Bankruptcy Procedure Rule 2004 Balancing Test, Patrick O’Connor

Bankruptcy Research Library

(Excerpt)

Federal Rule of Bankruptcy Procedure 2004 (“Rule 2004”) provides that “[o]n motion of any party in interest, the court may order the examination of any entity.” By its terms, the rule is broad. It is only marginally narrowed by Rule 2004(b) to require that examinations “relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge.” Given that Rule 2004 is broadly available in bankruptcy cases to “any party in interest” …

The Insolvency Effect On Attorney-Client Privilege, Anna Piszczatowski

Bankruptcy Research Library

(Excerpt)

“The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law.” This privilege has been held as sacred and essential to encourage complete and candid communication between attorneys and their clients. In fact, if the attorney’s “professional mission” is to be carried out appropriately to the fullest extent, then the attorney must be able to acquire all the information necessary to represent his client. Therefore, the privilege allows unfettered communication, for the benefit of both parties.

By carving more exceptions to the privilege, as bankruptcy courts, and even the Supreme Court, have in …

Although A Presumption Against Extraterritoriality Generally Precludes A Foreign Plaintiff From Recovering A Debtor’S Assets In A Civil Rico Claim, That Presumption Can Be Overcome To Hold A Foreign Defendant Liable For A Preference Claim, Amanda M. Schaefer

Bankruptcy Research Library

(Excerpt)

The civil portion of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) permits any individual “injured in his business or property by reason of a violation of the statute’s criminal provisions” to pursue a cause of action against a tort feasor. For a party to pursue a civil remedy for economic injury under the civil portion of the statute, its criminal portion must first be violated through illegal activity, such as numerous acts of mail and wire fraud. In RJR Nabisco, Inc. v. European Community (“RJR Nabisco”), the Supreme Court held that RICO’s private right of action under …

Fraudulent Transfer Provision Of The Bankruptcy Code Defined More Narrowly Than Similar Provisions In Other Statutes, Yaakov Seff

Bankruptcy Research Library

(Excerpt)

The fraudulent conveyance provision of the Bankruptcy Code, (“the Code”), Section 548, is an “elemental and ancient provision of debtor-creditor relations.” It provides that “[t]he trustee may avoid any transfer ... of an interest of the debtor in property ... that was made ... within two years before the date of the filing of the petition . . .” where the transfer involved actual or constructive fraud.

But the ability to avoid fraudulent transfers is not limited to the bankruptcy context; parallel provisions are found in several areas of the federal legislation. For instance, there is a fraudulent transfer …

More Than Fraud: Proving Fraud On The Court, Stephen Van Doran

Bankruptcy Research Library

(Excerpt)

In all adversarial proceedings, litigants have a duty of full disclosure and honesty with the court. Typically, where a party obtains a judgment through fraudulent conduct, the only way to overturn that judgment is through a motion to vacate pursuant to Federal Rule of Civil Procedure 60(b)(3).

A final judgment can also be overturned by a motion, pursuant to Federal Rule of Civil Procedure 60(d)(3), as incorporated into the Bankruptcy Rules by Rule 9024, to vacate a judgment based upon fraud on the court. Fraud on the court is generally limited to instances where “the integrity of the judicial …

Access To Consumer Bankruptcy, Pamela Foohey

Scholarly Works

This essay examines the state of access to justice in the context of consumer bankruptcy from two vantage points: (1) how people decide that their money problems are legal problems addressable by filing bankruptcy; and (2) the barriers people face in using the consumer bankruptcy system. To shed new light on how people decide to use bankruptcy to address their financial troubles, I analyze a sample of narratives accompanying consumers' complaints about financial products and services submitted to the Consumer Financial Protection Bureau. I also chronicle the evolution of research regarding consumer bankruptcy’s “local legal culture,” systemic racial bias, and …

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

Articles

The Supreme Court has issued two disturbing tax opinions which disrupt the notion that “property” (when used in federal statutes) refers to state-law notions. In Drye v. United States, the Supreme Court pierced the Arkansas fiction that inheritance disclaimers are retrospective in effect. Thus the Internal Revenue could claim that a tax lien attached to the pre-disclaimer inheritance. Disclaimer could not defeat this lien. In United States v. Craft, the Supreme Court pierced the Michigan fiction that a tenancy by the entireties does not belong to the individual spouses but, rather, the a corporate “marital” entity that is a separate …

Bankrupted Slaves, Rafael I. Pardo

Scholarship@WashULaw

Responsible societies reckon with the pernicious and ugly chapters in their histories. Wherever we look, there exist ever-present reminders of how we failed as a society in permitting the enslavement of millions of black men, women, and children during the first century of this nation’s history. No corner of society remains unstained. As such, it is incumbent on institutions to confront their involvement in this horrific past to fully comprehend the kaleidoscopic nature of institutional complicity in legitimating and entrenching slavery. Only by doing so can we properly continue the march of progress, finding ways to improve society, not letting …

Valuation Disputes In Corporate Bankruptcy, Kenneth M. Ayotte, Edward R. Morrison

Faculty Scholarship

Prior scholarship points to disagreements about valuation and judicial valuation error as key drivers of Chapter 11 outcomes. Avoiding valuation disputes and valuation errors is also the underlying driver of most proposed reforms, from Baird’s auctions to Bebchuk’s options. In this paper, we undertake a detailed examination of bankruptcy court opinions involving valuation disputes. Our paper has two goals. The first is to understand how parties and their expert witnesses justify their opposing views to the judge, and how judges decide between them. The second is to provide practical guidance to judges in resolving valuation disputes. We document surprisingly pervasive …

A Bridge Over Troubled Waters - Resolving Bank Financial Distress In Canada, Janis P. Sarra

All Faculty Publications

Effective June 2017, Canada formalized its new resolution regime for “domestic systemically important banks”. This article examines the new resolution regime in the context of the early intervention program by the financial services regulator. The system offers a complex but integrated set of mechanisms to monitor the financial health of financial institutions, to intervene at an early stage of financial distress, and to resolve the financially distressed bank in a timely manner. Resolution is the restructuring of a financially distressed or insolvent bank by a designated authority. To “resolve” a bank is to use a series of tools under banking …

Bankruptcy, Harlin D. Hale, Chance Hiner

SMU Annual Texas Survey

No abstract provided.

Bad Rules Won’T Clean Dirty Pools: The Problem Behind Section 523(A)(16) Policy And The Unnecessary Burden It Places On Debtor Hoa Members, Austin D. Murray

FIU Law Review

No abstract provided.

Reforming The True-Sale Doctrine, Heather Hughes

Scholarly Articles in Law Reviews & Journals

No abstract provided.

Commodifying Consumer Data In The Era Of The Internet Of Things, Stacy-Ann Elvy

Articles & Chapters

Internet of Things (“IOT”) products generate a wealth of data about consumers that was never before widely and easily accessible to companies. Examples include biometric and health-related data, such as fingerprint patterns, heart rates and calories burned. This Article explores the connection between the types of data generated by the IOT and the financial frameworks of Article 9 of the Uniform Commercial Code and the Bankruptcy Code. It critiques these regimes, which enable the commodification of consumer data, as well as laws aimed at protecting consumer data, such as the Bankruptcy Abuse Prevention and Consumer Protection Act, various state biometric …

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

Articles by Maurer Faculty

In this Response to Jonathan Lipson's article, The Secret Life of Priority: Corporate Reorganization After Jevic, 93 Wash. L. Rev. 631 (2018)), I focus on Czyzewski v. Jevic Holding Corp.'s implications for procedural justice and corporate reorganization. In his article, Lipson explicitly links the chapter 11 process with the Bankruptcy Code’s substantive rules about priority, crafting a forceful argument about what procedural values the U.S. Supreme Court sought to uphold when it penned Jevic. In doing so, Lipson expounds on a broader truth about the co-option of corporate reorganization’s process in the name of value preservation. Procedural justice teaches that …

Modularity In Cross-Border Insolvency, Andrew B. Dawson

Articles

No abstract provided.