We Need a Bankruptcy System for Small Businesses Without the Absolute Priority Rule: Two Alternatives

  By Donald L. Swanson During the entire existence of the Bankruptcy Code (enacted in 1978), Chapter 11 rules have been essentially the same for large and small businesses. General Motors, for example, is governed by the same Chapter 11 bankruptcy rules that govern every small Mom & Pop enterprise. I've always thought this same-treatment to... Continue Reading →

Federal Arbitration Act Needs a Bankruptcy Exception

By Donald L. Swanson This article is in follow-up to a prior one titled, "Federal Arbitration Act vs. Stern v. Marshall: So . . . What's Fair About This?"  The point here is that we need a bankruptcy exception to the Federal Arbitration Act. Litigation in bankruptcy: Here's how the issue arises. A Chapter 7, 11,... Continue Reading →

Recovering Tax Payments From IRS as Fraudulent Transfers (§ 544(b)): The “Actual Creditor” Issue

By: Donald L. Swanson The fact scenario is this. An S corporation pays its own taxes each year. Then it files bankruptcy. So, the bankruptcy trustee sues the IRS for recovery of those tax payments as fraudulent transfers.  It does so under two different sections of the Bankruptcy Code: (i) Under § 548, for payments within... Continue Reading →

“Bad” Fraud v. “Desperate” Fraud: The Ancient Pitkin / Brerewood Affair

By Donald L. Swanson Fraudulent conduct is as old as humanity itself. And it’s not going away. A Distinction: Bad Fraud v. Desperate Fraud Not all fraud is alike. --Two Illustrations My first experiences with fraud [or what might have been fraud – I’m not really sure] are in early high school days. Growing up on... Continue Reading →

Federal Arbitration Act vs. Stern v. Marshall: So . . . What’s Fair About This?

By Donald L. Swanson I’m irritated [not that anyone actually cares]. Here’s why. Federal Arbitration Act I’ve been reading some bankruptcy cases on requirements of the Federal Arbitration Act. These cases talk about submitting a bankruptcy dispute to arbitration based on an arbitration provision in the disputing parties’ pre-petition contract. Never mind that the dispute is... Continue Reading →

The Student Loan Debt Problem: Northwestern University as “Exhibit A”

By:  Donald L. Swanson Let’s juxtapose these two quotes: “Congress must act now to defuse the student loan debt bomb.” --From Jim Haller, Opinion Contributor, The Hill, February 27, 2017. “Northwestern’s [financial aid] options make higher education  more accessible.” --From Northwestern University's (Evanston, IL) “Tuition and Aid” online page. The Northwestern quote above uses the... Continue Reading →

A Peek into Business and Bankruptcy in Russia

By Donald L. Swanson It's not very often that we get to see what's going on with businesses and bankruptcies in Russia. But we now get a peek. It comes from a lawsuit and a bankruptcy filed in the Southern District of New York involving a granite production business in Russia. Business Developments in Russia Sergei... Continue Reading →

Puerto Rico is a “State” under U.S. Bankruptcy Law: Foreshadowing Bankruptcy-Type Relief for Other “States”?

By Donald L. Swanson "We must decide whether Puerto Rico is a “State” for purposes of this [bankruptcy] pre-emption provision. We hold that it is." --Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, U.S. Supreme Court Case No. 15-233 (Decided June 13, 2016). The Bankruptcy Code definition of "State" is contained in Sec. 101(52) and... Continue Reading →

Omission of Mediators and Other “Masters” from Federal Bankruptcy Rules is the Result of Haste and Error?!

By: Donald L. Swanson Mediators and Other Special Masters in District Courts -- Rule 53 “Special Masters” can be appointed by U.S. District Courts to handle special circumstances, under Fed.R.Civ.P. 53. One type of special master under Rule 53 is a “Settlement Master” (aka “Mediator”). Special masters are used by District Courts, typically, in large... Continue Reading →

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