Getting Mediators Approved and Paid in Bankruptcy

By Donald L. Swanson Every now and then a mediator gets stiffed on fees.  It doesn’t happen often.  But it happens.  And it’s always a shame. Mediators of bankruptcy disputes have an additional payment-related hurdle they must navigate.  The hurdle is this: --Advance court approval is required for getting paid from bankruptcy funds. Statutory Requirements... Continue Reading →

How the Bankruptcy Stay Passed Constitutional Muster — A Depression-Era Opinion that’s a Model for Today

By: Donald L Swanson The automatic stay is one of the basics of our bankruptcy laws. It’s a foundational rule for the entire bankruptcy system. But that hasn’t always been the case. In fact, the U.S. Supreme Court, in a Depression-era case, had to decide whether a bankruptcy stay is constitutionally permissible. And, fortunately, the Supreme... Continue Reading →

Merchant Cash Advance Loans as Preferences: Contrasting Judgments

By: Donald L Swanson Merchant cash advance loans provide ready-cash for businesses in desperate need of cash. Because of the desperation, terms of merchant cash advance loans can be oppressive. For example: Repayments are made daily—by automatic cash withdrawals from debtor’s bank account; Rates of return, if repaid as scheduled, often range from 50% per annum... Continue Reading →

U.S. House of Representatives Passes Bi-Partisan Bankruptcy Bill — It’s True!

By Donald L. Swanson On July 25, 2019, the U.S. House of Representatives passes on voice vote H.R. 2336, which raises the debt limit for Chapter 12 eligibility from $4.4 million to $10 million.  And both parties voted, "Aye"! Who would've thunk it: bi-partisan action by a partisan political body, in today's political environment?! The subject... Continue Reading →

Small Businesses and Entrepreneurs in Financial Stress Need a Chapter 12 Solution

By Donald L. Swanson It’s been 40 years since enactment of the Bankruptcy Code [Fn. 1].  And the Code has been highly effective in many contexts. But the Bankruptcy Code is, and always has been, inadequate for the needs of small businesses and entrepreneurs in financial stress.  Congress needs to address this deficiency. What Works &... Continue Reading →

Who Gets the $4 Million Tax Refund in Bankruptcy: U.S. Supreme Court to Decide (Rodriguez v. FDIC)

By: Donald L. Swanson On June 28, 2019, the U.S. Supreme Court granted certiorari in the case of Rodriguez v. FDIC, (Supreme Court Case No. 18-1269). The case is about a $4 million tax refund received by a parent corporation in bankruptcy, based upon losses from one of its wholly owned subsidiaries.  The question is this:... Continue Reading →

Estate Planning: A Frequently Used, But Rarely Successful, Defense Against Fraudulent Transfer Claims

By: Donald L. Swanson “Estate planning” is a frequently utilized, but rarely successful, defense against fraudulent transfer claims. Here’s why: estate planning strategies that make perfect sense when everyone is solvent become cloaked with “badges of fraud” amid insolvency, demonstrating “actual intent to hinder, delay or defraud creditors.” Estate planning to address financial defaults is usually... Continue Reading →

The Bankruptcy Code Needs an Advocate for Its Interests at U.S. Supreme Court — The Solicitor General is Not Adequate

By: Donald L Swanson The Bankruptcy Code is in a precarious position.  It is a “transformative piece of legislation,” but it is without a strong agency in the Executive Branch to interpret it, enforce it, and promote its interests. [Fn. 1] Each Federal agency is part of the Executive Branch and has an area of responsibility... Continue Reading →

Legal Standard for Imposing Civil Contempt

By: Donald L. Swanson On June 3, 2019, the U.S. Supreme Court issued its opinion in the Taggart v. Lorenzen case. The Question The question before the Supreme Court, in Taggart v. Lorenzen, “concerns the legal standard for holding a creditor in civil contempt when the creditor attempts to collect a debt in violation of a... Continue Reading →

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