On Bankruptcy and Mediation
By Donald L. Swanson “For the reasons set forth below, the Court holds that S corporation status is not ‘property’ for the purposes of 11 U.S.C. §§ 544(b), 548.” --Judge Kevin R. Huennekens in Arrowsmith v. USA (In re Health Diagnostic Laboratory, Inc., Case No 17-04300, Doc. 54 (Bankr.E.D.Va., December 6, 2017). The reasons identified by... Continue Reading →
By Donald L. Swanson It’s a decade-or-more ago. I’m sitting in a continuing legal education seminar on bankruptcy law hoping to learn something new-and-useful for my day-to-day practice. Threatening Bankruptcy Attorneys With Criminal Prosecution?!! What we get, instead, is an hour-long warning from a representative of the U.S. Government on, (i) how attorneys in bankruptcy cases... Continue Reading →
By Donald L. Swanson The consensus I’ve been reading these days is that a split of authority is shaping up between the Second and Third Circuit Courts of Appeals on enforcability of make-whole premiums in bankruptcy. --The first of two cases is from the Third Circuit: In re Energy Future Holdings Corp., 842 F.3d 247 (3rd... Continue Reading →
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 This article is a two-centuries history of Federal bankruptcy laws and economic conditions in the United States: from the Declaration of Independence in 1776 through the enactment of the current Bankruptcy Code in 1978. The Late 1700s In 1776, at the signing of the Declaration of Independence, thirteen colonies along the... Continue Reading →
By Donald L. Swanson Timeline for a Plan Confirmation Dispute November 11: Creditor requests an order requiring mediation November 14 (a.m.): Debtor objects to request for mediation order November 14 (p.m.): Court orders mediation December 6: Debtor and creditor reach a settlement agreement February 7: Debtor’s bankruptcy plan is confirmed This timeline is from a... 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 →
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