Category: Bankruptcy

Arbitration Clause As Executory Contract: Rejecting In Bankruptcy To Forestall Arbitration? (Highland Capital v. Dondero)

An outlier (photo by Marilyn Swanson) By: Donald L Swanson Bankruptcy Court denies a motion to compel arbitration, because the arbitration agreement is a rejected executory contract. This appears to be a new and outlying theory for denying arbitration of bankruptcy disputes. The opinion is Highland Capital Management, L.P. v. Dondero et al., A.P. No. 21-03003,... Continue Reading →

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“Single Asset Real Estate” & Subchapter V Eligibility (In re Moore; In re McGrath; In re ENKOGS1)

A “single asset real estate”? (Photo by Marilyn Swanson) By: Donald L Swanson Rules for Subchapter V eligibility exclude a “single asset real estate” business.  The operative statute provides: “Debtor’ . . . [in Subchapter V] means a person engaged in commercial or business activities . . . excluding a person whose primary activity is the... Continue Reading →

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§ 1111(b) Election’s Two-Step For Confirmation (In re Topp’s Mechanical)

Election (photo by Marilyn Swanson) By: Donald L Swanson A new Bankruptcy Court opinion applies the § 1111(b) election and its two-step test in the context of a Subchapter V plan confirmation. The opinion is In re Topp’s Mechanical, Inc., Case No. 21-40038, Nebraska Bankruptcy Court (issued November 23, 2021, Doc. 94).  What follows is an... Continue Reading →

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Debtors In Bankruptcy: The “Criminals” Of Olde (Wood v. Owings)

Title page of U.S. Supreme Court's 1803 opinion, Wood v. Owings By Donald L. Swanson “The committing an act of bankruptcy is, in law, considered as criminal. The bankrupt law is, therefore, in this respect, to be construed strictly.” This quotation is a punch line from the very first opinion by the U.S. Supreme Court on... Continue Reading →

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Ending The Tragedy Of Debtors Prison (U.S. Supreme Court — Beers v. Haughton)

Imprisoned in a Safari Park (photo by Marilyn Swanson) By: Donald L Swanson Bankruptcy laws must (and do) change.  That’s because the U.S. economy is always changing: it has been in an ever-expanding mode—punctuated by recessions and depressions from time-to-time—throughout the course of its existence. One example of change is abolition of the debtors prison remedy.... Continue Reading →

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Subchapter V Eligibility: A “Liberal Construction” Trend (Lyons v. Family Friendly; In re Mongeau)

"Commercial or business activity"? (photo by Grant Swanson) By: Donald L Swanson Bankruptcy courts continue struggling with the meaning of the phrase “commercial or business activities” for Subchapter V eligibility.  That’s especially true when a debtor’s business liquidates before the bankruptcy is filed. However, the distinct trend of such struggle is toward a liberal construction of... Continue Reading →

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“Scheduled” Property & Automatic Abandonment (§ 554(c)): What About Listing Only On SOFA? (Stevens v. Whitmore)

11 U.S.C. Sec. 554–on abandonment By: Donald L Swanson “any property scheduled under section 521(a)(1) of this title not otherwise administered at the time of the closing of  a case is abandoned to the debtor”  (11 U.S.C. § 554(c), emphasis added).  Question: What does “scheduled under section 521(a)(1)” mean in § 554(c): Is inclusion on the... Continue Reading →

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Avoiding Liens On Residence: Homestead Exemption vs. Preserving For Estate vs. Tax Lien (Hutchinson v. Salven)

A homestead (photo by Marilyn Swanson) By: Donald L Swanson Here’s a new and interesting opinion from the Ninth Circuit Court of Appeals: Hutchinson v. Salven, Case No. 19-60065 (filed 10/19/2021). The opinion involves these facts: the IRS files a $162,000 tax lien for penalties against Debtors’ homestead;Debtors then file their Chapter 7 bankruptcy and attempt... Continue Reading →

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Pandemic-Induced Improvements In Judicial Processes Are Here To Stay: A Report

Revolutionary By: Donald L Swanson An early-in-the-pandemic report on judicial processes [fn. 1] shows how the pandemic produces a revolution in the way courts do business—a revolution creating improvements in court processes that are here to stay. What follows is a summary of that report. Pre-Pandemic Reality Before the pandemic began, US courts lag behind other... Continue Reading →

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Alabama & North Carolina: Squatter’s Rights On A Non-Uniform Bankruptcy System? (Siegel v. Fitzgerald)

Uniformity (photo by Marilyn Swanson) By: Donald L Swanson This is bizarre: Back in the 1980s, federal politicians in Alabama and North Carolina carve out a special deal for themselves (their bankruptcy funding is by taxpayers), while all other 48 states have a different deal (bankruptcy funding is by debtor fees); andThis disparity persists in varying... Continue Reading →

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