On Bankruptcy and Mediation
A farming operation? (Photo by Marilyn Swanson) By: Donald L Swanson “Engaged in” eligibility for Chapter 12 (farming operations) and Subchapter V (commercial or business activities) are similar-but-separate things. An opinion by the Kansas Bankruptcy Court shows the difficulty in addressing the “engaged in” eligibility standards in Chapter 12—even when Subchapter V opinions are consulted as... Continue Reading →
Behind the scenes (photo by Marilyn Swanson) By Donald L. Swanson “We can’t see what the Subchapter V trustees are doing, so we don’t have an opinion on their effectiveness.” --This is the response of a couple bankruptcy judges, when asked about the effectiveness of Subchapter V trustees in performing the statutory “facilitate a consensual plan”... Continue Reading →
Managing tension (photo by Marilyn Swanson) By: Donald L Swanson On January 3, 2022, Reuters reports, under the heading “Judge orders mediation for Purdue, Sacklers over opioid settlement,” as follows: A U.S. bankruptcy judge orders mediation in the Purdue Pharma bankruptcy [fn. 1], calling for the company, the Sackler family members that own it and nine... Continue Reading →
Pursuing a strategy? (Photo by Marilyn Swanson) By: Donald L Swanson “There is no federal mediation privilege”;“the mediator's testimony about the mediation is not privileged”; and“there is no legal bar to Defendants seeking the [mediator’s testimony] with regard to the mediation and settlement negotiations.” --Roberts v. City of Fairbanks, Case No. 17-cv-00034, U.S. District Court of... Continue Reading →
Flip-Flopping (photo by Marilyn Swanson) By: Donald L Swanson “The Congress shall have Power . . . To establish . . . uniform Laws on the subject of Bankruptcies throughout the United States” (U.S. Const., Article I, §8, cl. 4). Once upon a long time ago, the U.S. Constitution’s Bankruptcy Clause, and its “uniform Laws” requirement,... Continue Reading →
A death knell? (photo by Marilyn Swanson) By: Donald L Swanson Merchant cash advances are the business version of payday loans: a relatively small amount of money loaned at a high rate of interest. Payday loans are repaid from debtor’s next paycheck, while merchant cash advances are repaid by daily withdrawals from debtor’s bank account. Merchant... Continue Reading →
Uniformity (photo by Marilyn Swanson) By: Donald L Swanson The United States of America is asking the U.S. Supreme Court to rule on the constitutionality of having U.S. Trustees in 88 judicial districts and Bankruptcy Administrators in 6 judicial districts. What follows is a summary of the U.S. Trustee’s explanation of the constitutionality issue in a... Continue Reading →
11 U.S.C. Sec. 1191(c)(2) By: Donald L Swanson “The three-year term here is fair and equitable, as it properly balances the risks and rewards for both the debtor and its creditors”; and“the Court declines to fix a longer plan period.” --From a Bankruptcy Court opinion confirming Debtor’s Subchapter V plan—In re Urgent Care Physicians, Ltd, Case... Continue Reading →
A reasonable and necessary path (photo by Marilyn Swanson) By: Donald L Swanson A Subchapter V Trustee is entitled to allowance of fees, even when the Subchapter V case is dismissed for lack of authority to file the case. That's the December 16, 2021, ruling in In re Besthost Inn LLC, Case No 21-12158 in the... Continue Reading →
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 →
