How U.S. Constitution’s Contracts Clause Bans State Bankruptcy Laws (Sturges v. Crowninshield)

Filling the void (photo by Marilyn Swanson) By: Donald L Swanson “No State shall . . . pass any . . . Law impairing the Obligation of Contracts.” --U.S. Constitution, Art. 1, Sec. 10, Cl. 1 (the “Contracts Clause”). One of the earliest opinions from the U.S. Supreme Court on the subject of bankruptcy is Sturges... Continue Reading →

Judge Wedoff: On Representing Respondents At Supreme Court In Chicago v. Fulton (An Interview)

By: Donald L Swanson On January 14, 2021, the U.S. Supreme Court issued its majority and concurring opinions in the City of Chicago v. Fulton case.  The opinions give a technical victory to the City on a narrow legal issue but suggest that the City may be in a difficult position on a variety of related... Continue Reading →

What Qualifies As “Engaged In Business Or Commercial Activities” For Subchapter V Eligibility? (In re U Stop)

Engaged in business or commercial activities? (photo by Marilyn Swanson) By: Donald L Swanson Negotiating a lease for office space in a portion of the debtor's business premises qualifies as “engaged in commercial or business activities" on the petition date for Subchapter V eligibility.  That’s the ruling by Hon. Charles L. Nail, Jr., Bankruptcy Judge for... Continue Reading →

Supreme Court Denies Cert (GE v. Belton): A Bankruptcy Code v. Arbitration Act Reprieve — And Constitution’s Bankruptcy Exception

Uniformity (photo by Marilyn Swanson) By: Donald L Swanson We've dodged the bullet . . . again! Yesterday, the U.S. Supreme Court denied certiorari in GE Capital Retail Bank v. Belton (Case No. 20-481), where the question presented is: Which federal statutory scheme takes precedence in resolving important bankruptcy issues -- the Bankruptcy Code or the... Continue Reading →

Debtors Sign Federal Tax Returns Digitally; Why Not Petitions and Schedules? Debtor digital signatures -- some background Reprinted with permission from the ABI Journal, Vol. XXXVIX, No. 1, January 2020.  Here is a link to the original publication. Debtors sign their federal tax returns digitally all the time. The Internal Revenue Service (IRS) allows digital signing, without reservation; the Department of Justice (DOJ) prosecutes digital... Continue Reading →

Court Order For Mediation Of Plan Confirmation Disputes (In re Garrett)

A mediation session? (photo by Marilyn Swanson) By: Donald L Swanson Every now and then, something happens that can serve as a model or form or checklist for similar situations.  Chapter 11 plan confirmation disputes are often complex and involve multiple parties.  In the case of In re Garrett Motion, Inc., (Case No. 20-12212, S.D.N.Y. Bankruptcy),... Continue Reading →

Will Subchapter V’s $7.5 Million Eligibility Limit Be Extended In Time?

Sunset (photo by Marilyn Swanson) By: Donald L Swanson March 27, 2021, is the sunset date for Subchapter V’s eligibility debt limit of $7.5 million.  At the stroke of midnight, that coach will turn back into a $2.7 million pumpkin. So . . . where is the action in Congress to extend that $7.5 million limit? ... Continue Reading →

Gaining Insight Into Mediating Parties’ Psychological States, Based on “Gaze Behavior”

Averting the gaze (photo by Marilyn Swanson) By: Donald L Swanson A “listeners’ gaze behavior may serve as a readily observable and quantifiable marker of psychological states relevant for . . . mediators.” [Fn. 1, emphasis added.] One day, back when this could still happen, I’m sitting in a waiting room with a bunch of strangers. ... Continue Reading →

Generating a Positive Cash Flow in Reorganization: The Central Task of a Family Business

By: Donald L Swanson A family business in Chapter 11 (whether in Subchapter V or a regular Chapter 11) has one task that stands above all others in importance. It’s this: The business must generate a positive cash flow. The Lawyer’s Impossible Task All the favorable bankruptcy rules that exist, and all the favorable bankruptcy court... Continue Reading →

Study: Early Referrals To Mediation, With Opt-Out for Good Cause, Are Effective

A courthouse (photo by Marilyn Swanson) By: Donald L Swanson When an opt-out for good cause exists, early referral of a case to mediation facilitates settlement. --This conclusion is from a “large sample” study of mediations involving the federal government as party defendant. The “large sample” study is reported as, “Dispute Resolution and the Vanishing Trial:... Continue Reading →

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