Banking & Finance Law Report

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The CARES Act: Changes to the U.S. Bankruptcy Code

On March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. Among other things, the CARES Act made some important changes to the U.S. Bankruptcy Code. Specifically, the CARES Act modified subchapter V of the bankruptcy code to make it more widely available to small businesses. The … Continue Reading

Expanding the Defense of Ordinary Course and Widening the Range of Acceptable Payments During the Historical Period

The Seventh Circuit Court of Appeals in Unsecured Creditors Committee of Sparrer Sausage Co., Inc. v. Jason’s Foods, Inc., 2016 WL 3213090 (7th Cir. June 10, 2016) expanded the scope of the ordinary course defense in a bankruptcy preference action.  This case provides an excellent road map for a creditors’ rights attorney defending a preference … Continue Reading

Supreme Court Enhances Creditor’s Right to Bar Debtor’s Discharge of Debts-Expanding Reach of Actual Fraud and Shareholder’s Liability

Until the recent U. S. Supreme Court’s decision in Husky International Electronics, Inc. v. Ritz, __ U.S. __, 136 S.Ct. 1581, 194 L.Ed.2d 655, 84 U.S. L.W. 4270 (2016),  there was disagreement in the circuit courts regarding whether a debtor in bankruptcy could be denied a discharge under 11 U.S.C. § 523(a)(2)(A) where the evidence … Continue Reading

Ohio Revised Code §1301.401 – A Powerful Tool for Lenders with a Defective Mortgage

For years, it was generally accepted that mortgage creditors and bankruptcy trustees could assert the status of a bona fide purchaser and treat a defectively notarized mortgage as if that mortgage did not exist.  On February 16, 2016, our Supreme Court provided clarity regarding the legal effects of R.C. §1301.401 and provided protection to lenders … Continue Reading

STRUCTURED DISMISSAL OF CHAPTER 11 CASES AND THE INVOLUNTARILY SUBORDINATED CREDITOR: Official Comm. of Unsecured Creditors v. CIT Group/Bus. Credit Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3d Cir. 2015)

The United States Court of Appeals for the Third Circuit plays a uniquely important role in the development of the bankruptcy laws.  The liberal venue rule for bankruptcy cases set out in 28 U.S.C. § 1408 has led to the disproportionate filing of large and mega chapter 11 bankruptcy cases being filed in the District … Continue Reading

Law v. Siegel, __ U.S. ___, 134 S.CT. 1188 (2014): The Supreme Court Addresses the Scope of the “All Writs” Provision in the Bankruptcy Code

The Bankruptcy Code has approximately 275 different sections. The number of its subsections and subparagraphs is well into the thousands. It is impossible to select the “most significant” provision in the Bankruptcy Code, but among the candidates for that title is certainly § 105 of the Code. Section 105(a) of the Bankruptcy Code provides in … Continue Reading

In re McKenzie, 737 f.3d 1034 (6th cir. 2013) Extending the Deadline for Trustees to Attack Preferences: The Sixth Circuit’s Life Jacket for Tardy Trustees

It is often said that the acid test of a security interest or lien on property is the bankruptcy of the property owner. If that person or entity files a bankruptcy petition, the bankruptcy trustee has a number of options to challenge or even avoid certain liens. A lien that is not properly perfected is … Continue Reading

The Sixth Circuit Holds that Bankruptcy Courts Lack the Inherent Power to Award “Serious Non-Compensatory Punitive Damages”

Nearly 30 years after enactment of the Bankruptcy Amendments and Federal Judgeship Act of 1984 and establishment of the current bankruptcy court structure, courts are still struggling to understand the bounds of a bankruptcy court’s jurisdiction and power. Unfortunately for one recent appellant, a bankruptcy court’s power to enter punitive damages is not as great … Continue Reading

In re: Tracy Broadcasting Corporation

Secured creditors of borrowers holding Federal Communications Commission ("FCC") broadcasting licenses, as well as such borrowers seeking credit, will be reassured by a recent decision of the United States Court of Appeals for the Tenth Circuit, In re: Tracy Broadcasting Corporation, released October 16, 2012. The Tenth Circuit has joined other courts in upholding the priority … Continue Reading

Part Seven

This article is Part Seven in a seven-part series on how to structure sales and what to do when your customer fails to pay. You can find previous articles in this series here: Structuring Sales to Ensure Payment; Signs of Trouble Before Payment Default; Default by a Customer: Knowledge is Power; What to Consider When … Continue Reading

Signs of Trouble Before Payment Default

This article is Part Two in a seven-part series on how to structure sales and what to do when your customer fails to pay. You can find Part One of this series here: Structuring Sales to Ensure Payment. Please subscribe to this blog by entering your email in the box on the left, or check … Continue Reading

RECOUPMENT AND SETOFF ISSUES FOR HEALTH CARE LENDERS

Health care lenders and others evaluating or relying on the financial strength of a healthcare provider need to think about the potential recoupment and setoff of claims against Medicare/Medicaid receivables of the provider.  RECOUPMENT Recoupment, which is the netting of two related claims which is the function of a single, unitary transaction between the parties, … Continue Reading
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