On Bankruptcy and Mediation
By: Donald L. Swanson The case before the U.S. Supreme Court is Merit Management Group, LP v. FTI Consulting, Inc., Case No. 16-784. The bankruptcy question is whether the § 546(e) safe harbor prohibits avoidance of a transfer made through a financial institution as escrow agent. Oral arguments occurred on November 6, 2017 [Footnote 1]. Justice... Continue Reading →
By: Donald L. Swanson The U.S. Supreme Court has already dismissed one bankruptcy appeal this term as “improvidently granted.” This is an oddity. And it should have also dismissed U.S. Bank National Association v. Village at Lakeridge, Case No. 15-1509, for the same reason. Instead, the Court held oral arguments in the Lakeridge case on... Continue Reading →
By: Donald L. Swanson Financially strapped farmers and their lenders finally get some much-needed bankruptcy tax relief. Normally, pre-bankruptcy income and capital gains tax claims have a priority and non-dischargeable status in bankruptcy. And the same taxes, when arising during bankruptcy, add an administrative claim status. Some Farm History Such normal rules had a devastating... Continue Reading →
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 →
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 →
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 →
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 →
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 →
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 →
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 →
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