On Bankruptcy and Mediation
Photo is from the electronic docket for Sears bankruptcy case By Donald L. Swanson Here’s an under-appreciated fact: businesses (every one of them) face every-day risks that can destroy them. The rise and fall of the retailer, Sears, provides an illustration of the reality of such risks and how those risks ultimately prevail—even for the best... Continue Reading →
Can it be fixed? (Photo by Marilyn Swanson) By: Donald L Swanson 11 U.S.C. § 1191(c)(2) provides (emphasis added): “(c) . . . the condition that a plan be fair and equitable . . . includes . . . (2) . . . all of the projected disposable income of the debtor to be received in... Continue Reading →
What’s the intent? (Photo by Marilyn Swanson) By: Donald L Swanson Under 11 U.S.C. § 727(a)(2), an individual debtor may be denied a discharge, in its entirely, for making a transfer “with intent to hinder, delay, or defraud” a creditor or the trustee. On April 17, 2023, the Bankruptcy Court for Eastern Michigan ruled: an “intent... Continue Reading →
A "Silent" Participant? (Photo by Marilyn Swanson) By: Donald L Swanson A “silent” creditor in Subchapter V is one who does not vote on the debtor’s plan and does not object to that plan. The “silent” creditor is a problem for Subchapter V cases. The Problem Here’s the problem: Subchapter V plans are prevented from being... Continue Reading →
Alive? Or a fiction? (Photo by Marilyn Swanson) By: Donald L Swanson Here are a couple discharge-related bankruptcy questions I’ve heard of late, along with an answer. Question 1. Why are individuals, but not corporations, eligible for a Chapter 7 discharge? §727(a)(1) says, “the court shall grant the debtor a discharge, unless—(1) the debtor is not... Continue Reading →
Confidential and no competition (photo by Marilyn Swanson) By: Donald L Swanson Can non-compete and confidentiality protections in a rejected franchise agreement be discharged in bankruptcy? The answer is, “No,” according to In re Empower Central Michigan, Inc.[Fn. 1] Facts Debtor is an automotive repair shop. Debtor operates under a Franchise Agreement with Autolab Franchising, LLC. ... Continue Reading →
Expired (Photo by Marilyn Swanson) By: Donald L Swanson The continuing effort in Congress to extend Subchapter V’s $7.5 million debt limit recently hit a snag. The result: the $7.5 million debt limit for Subchapter V eligibility expired on June 21, 2024, and the Subchapter V debt limit is now reduced to an inflation-adjusted $3,024,725.[i] The... Continue Reading →
Uttering an expletive? (Photo by Marilyn Swanson) By: Donald L Swanson The phrase “Texas Two-Step,” as used in bankruptcy, is a legal expletive. Regardless of what the details of a Texas Two-Step might be, the phrase has become synonymous with: abusive behavior; bad faith conduct; a means for swindling creditors; the antithesis of “doing what’s right”;... Continue Reading →
By: Donald L Swanson Here’s a dilemma: Should bankruptcy be available as a tool for resolving mass tort cases of all types (like it already is in asbestos contexts)? Here’s an illustration of the dilemma: many tort claimants in the Johnson & Johnson case DO NOT want bankruptcy involved; but many tort claimants in the Purdue... Continue Reading →
https://youtu.be/pjbJU1cUf80 By: Donald L Swanson Hon. Michelle M. Harner is Bankruptcy Judge for the District of Maryland. Judge Harner has a long history of work on creating and implementing Subchapter V bankruptcy laws for smaller businesses. That history includes these two roles: back in 2012 through 2014, Judge Harner served as Reporter for the Commission to... Continue Reading →
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