It is my honor to present a 90 minute national, teleconference on the Bankruptcy Code's Automatic Stay (11 U.S.C. sec. 362). Join us for an insightful, fast-paced, comprehensive and lively discussion of the Automatic Stay. This seminar is perfect for attorneys at any practice level, bankers, lenders, business owners and debtors. The seminar promises to be educational but interesting and a lasting and exceptional resource.
This document provides notice of Patriot Coal Corporation's motion seeking court approval to conduct rights offerings as part of its chapter 11 reorganization plan. Specifically, the motion seeks authorization to enter into a backstop purchase agreement with certain funds to ensure sufficient proceeds are raised in the rights offerings. The rights offerings will allow eligible creditors to purchase new senior secured notes and warrants. The motion also seeks approval of the proposed rights offerings procedures. Objections to the motion are due by October 30, with a hearing scheduled for November 6.
This document is an amended plan of reorganization filed in the United States Bankruptcy Court for LodgeNet Interactive Corporation and its affiliates, who are debtors in Chapter 11 bankruptcy cases. The plan proposes reorganizing the debtors' capital structure and financial obligations under Chapter 11 of the Bankruptcy Code. It defines key terms used in the plan and establishes classes of claims and interests to determine how prepetition obligations will be treated under the plan.
This document is an application filed in the United States Bankruptcy Court for the District of Delaware by Cordillera Golf Club, LLC seeking approval to retain GA Keen Realty Advisors, LLC as its real estate advisor. Cordillera Golf Club filed for Chapter 11 bankruptcy protection and requires assistance assessing the highest and best use of its owned real property and obtaining capital for its business. The application requests that GA Keen Realty be approved as Cordillera's real estate advisor nunc pro tunc to the petition date under the terms of a retention agreement between the two parties. GA Keen Realty has experience advising other debtors in bankruptcy cases and working with Cordillera since prior to the bankruptcy filing.
The debtor, Cordillera Golf Club, LLC, filed an application seeking approval to retain GA Keen Realty Advisors, LLC as its real estate advisor nunc pro tunc to the petition date. GA Keen Realty will assist the debtor by raising debt or equity capital to fund a reorganization plan, refinance properties, or sell properties. GA Keen Realty will receive transaction fees ranging from 2-6% of proceeds depending on the type of transaction closed. The application seeks to waive certain fee application requirements and employ GA Keen Realty under an incentive-based fee structure customary for its commercial real estate advisory services.
This document is an objection filed by the United States Trustee to motions filed by Petitioning Creditors and Alleged Debtors to seal certain documents filed with the court. The U.S. Trustee does not oppose sealing documents pending a ruling on whether the bankruptcy cases will proceed, but argues that any sealing should end if the court finds cause to open bankruptcy cases, as the information would then become public. The U.S. Trustee asserts that bankruptcy law favors public disclosure of information relevant to creditors and parties in interest.
This document is an affidavit from Mark Weinsten in support of LodgeNet Interactive Corporation filing for Chapter 11 bankruptcy and the relief sought in various first day motions. It provides background on LodgeNet's financial difficulties and proposed restructuring, including a $60 million investment from Colony Capital in exchange for 100% ownership of reorganized LodgeNet under a prepackaged Chapter 11 plan that has already received creditor support. The affidavit also summarizes various motions seeking court approval of procedures to allow LodgeNet to continue operating in bankruptcy with minimal disruption.
1) The plaintiffs, a photographer and his company, brought this action against their former agent MCA and its individual owners to recover unpaid fees of $400,484.97 for work performed.
2) MCA became insolvent in 2010 and stopped paying the plaintiffs in 2012. The plaintiffs allege that the individual defendants fraudulently transferred money from MCA's accounts to themselves.
3) The defendants move for summary judgment dismissing some claims, while two individual defendants seek to dismiss all claims against them. The court must determine if there are any genuine disputes of material fact.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking approval of procedures for interim compensation and reimbursement of expenses for professionals retained in the chapter 11 case. The motion requests that professionals be allowed to submit monthly fee applications for payment of 80% of fees and 100% of expenses, with interim fee applications submitted every three months. The procedures are consistent with those approved in other large chapter 11 cases and will help streamline the professional compensation process.
This document provides notice of Patriot Coal Corporation's motion seeking court approval to conduct rights offerings as part of its chapter 11 reorganization plan. Specifically, the motion seeks authorization to enter into a backstop purchase agreement with certain funds to ensure sufficient proceeds are raised in the rights offerings. The rights offerings will allow eligible creditors to purchase new senior secured notes and warrants. The motion also seeks approval of the proposed rights offerings procedures. Objections to the motion are due by October 30, with a hearing scheduled for November 6.
This document is an amended plan of reorganization filed in the United States Bankruptcy Court for LodgeNet Interactive Corporation and its affiliates, who are debtors in Chapter 11 bankruptcy cases. The plan proposes reorganizing the debtors' capital structure and financial obligations under Chapter 11 of the Bankruptcy Code. It defines key terms used in the plan and establishes classes of claims and interests to determine how prepetition obligations will be treated under the plan.
This document is an application filed in the United States Bankruptcy Court for the District of Delaware by Cordillera Golf Club, LLC seeking approval to retain GA Keen Realty Advisors, LLC as its real estate advisor. Cordillera Golf Club filed for Chapter 11 bankruptcy protection and requires assistance assessing the highest and best use of its owned real property and obtaining capital for its business. The application requests that GA Keen Realty be approved as Cordillera's real estate advisor nunc pro tunc to the petition date under the terms of a retention agreement between the two parties. GA Keen Realty has experience advising other debtors in bankruptcy cases and working with Cordillera since prior to the bankruptcy filing.
The debtor, Cordillera Golf Club, LLC, filed an application seeking approval to retain GA Keen Realty Advisors, LLC as its real estate advisor nunc pro tunc to the petition date. GA Keen Realty will assist the debtor by raising debt or equity capital to fund a reorganization plan, refinance properties, or sell properties. GA Keen Realty will receive transaction fees ranging from 2-6% of proceeds depending on the type of transaction closed. The application seeks to waive certain fee application requirements and employ GA Keen Realty under an incentive-based fee structure customary for its commercial real estate advisory services.
This document is an objection filed by the United States Trustee to motions filed by Petitioning Creditors and Alleged Debtors to seal certain documents filed with the court. The U.S. Trustee does not oppose sealing documents pending a ruling on whether the bankruptcy cases will proceed, but argues that any sealing should end if the court finds cause to open bankruptcy cases, as the information would then become public. The U.S. Trustee asserts that bankruptcy law favors public disclosure of information relevant to creditors and parties in interest.
This document is an affidavit from Mark Weinsten in support of LodgeNet Interactive Corporation filing for Chapter 11 bankruptcy and the relief sought in various first day motions. It provides background on LodgeNet's financial difficulties and proposed restructuring, including a $60 million investment from Colony Capital in exchange for 100% ownership of reorganized LodgeNet under a prepackaged Chapter 11 plan that has already received creditor support. The affidavit also summarizes various motions seeking court approval of procedures to allow LodgeNet to continue operating in bankruptcy with minimal disruption.
1) The plaintiffs, a photographer and his company, brought this action against their former agent MCA and its individual owners to recover unpaid fees of $400,484.97 for work performed.
2) MCA became insolvent in 2010 and stopped paying the plaintiffs in 2012. The plaintiffs allege that the individual defendants fraudulently transferred money from MCA's accounts to themselves.
3) The defendants move for summary judgment dismissing some claims, while two individual defendants seek to dismiss all claims against them. The court must determine if there are any genuine disputes of material fact.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking approval of procedures for interim compensation and reimbursement of expenses for professionals retained in the chapter 11 case. The motion requests that professionals be allowed to submit monthly fee applications for payment of 80% of fees and 100% of expenses, with interim fee applications submitted every three months. The procedures are consistent with those approved in other large chapter 11 cases and will help streamline the professional compensation process.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking approval of procedures for interim compensation and reimbursement of expenses for professionals retained in the chapter 11 case. The motion requests that professionals be allowed to submit monthly fee applications for payment of 80% of fees and 100% of expenses, with interim fee applications submitted every three months. The procedures are intended to streamline the payment process in this large chapter 11 case.
This document is a motion filed in United States Bankruptcy Court requesting an order to shorten the notice period for a hearing on the appointment of a trustee. The motion was filed by petitioning creditors against Allied Systems Holdings, Inc. and Allied Systems, Ltd. (L.P.), who were recently subject to involuntary bankruptcy petitions. The motion argues that exigent circumstances exist due to conflicts of interest and mismanagement by the company's controlling shareholder, Yucaipa, that threaten creditor interests. As such, an expedited hearing is requested to consider appointing a trustee to assume control of the debtors.
This document discusses a bankruptcy court case regarding the sale of an internet domain name. The key points are:
1) The debtor (Heath Global) had agreed to purchase the "Invest.com" domain name from Jim Magner for $2 million in installments over two years.
2) After Heath Global missed an installment payment, Magner sent a notice purporting to terminate the agreement based on a clause allowing termination if a payment was not cured within 7 days.
3) Before the 7-day cure period expired, Heath Global filed for bankruptcy. The bankruptcy court found the agreement had automatically terminated pre-petition.
4) On appeal, the district court found that the agreement
The document provides a historical overview and summary of fraudulent transfer law in Vermont. It begins with the origins of fraudulent transfer law in 16th century England and discusses how various states, including Vermont, adopted versions of the Statute of 13 Elizabeth. It then summarizes Vermont's adoption of the Uniform Fraudulent Transfer Act in 1996 and how the Act modernized fraudulent transfer standards. The summary concludes by outlining the key elements, parties, remedies, standards of proof, and statute of limitations in fraudulent transfer cases under Vermont law.
This document is a bench ruling from a bankruptcy judge on a motion to compel arbitration related to a debtor's cash collateral motion. The judge analyzes applicable case law and determines that:
1) Whether a debtor has authority to use cash collateral is fundamentally a bankruptcy issue, not a contractual dispute.
2) The parties did not agree to arbitrate issues relating to a debtor's rights under the Bankruptcy Code, as those rights were created by Congress and differ from pre-bankruptcy contractual rights.
3) Therefore, the motion to compel arbitration of the debtor's cash collateral motion is denied, as use of cash collateral is a core bankruptcy issue not subject to the arbitration agreement.
King county-superior-court-order-on-rha-v-city-of-seattle-22421Roger Valdez
This order denies the plaintiffs' motion for summary judgment and grants the defendant's cross-motion for summary judgment. It finds that the three Seattle ordinances establishing defenses to eviction due to financial hardship during COVID-19 do not conflict with state law and are therefore not preempted. While the ordinance provision staying late fees is preempted, the rest can be harmonized with state eviction statutes as establishing substantive defenses rather than conflicting with the statutes' procedural framework. Controlling Washington precedent has established that the state eviction laws provide only procedures, not substantive rights, so local governments can permissibly provide additional defenses.
This document is a court opinion and order in a lawsuit between Century Indemnity Company and various defendants regarding insurance coverage for environmental contamination at a Superfund site. The court is considering a motion for summary judgment filed by third-party plaintiffs (various companies affiliated with Northwest Marine Inc.) against four insurance company defendants regarding those insurers' duties to defend the third-party plaintiffs in a CERCLA action related to the Superfund site. The court discusses the insurance policies at issue, the corporate history and succession of entities, and analyzes whether the policies trigger a duty to defend and if any policy exclusions apply.
United Western Bank v Office of Thrift Supervision-1Liana Prieto
This document summarizes a court case from the United States District Court for the District of Columbia regarding United Western Bank's challenge of the appointment of the Federal Deposit Insurance Corporation (FDIC) as the receiver of the bank by the Acting Director of the Office of Thrift Supervision (OTS). The court granted in part and denied in part motions to dismiss filed by OTS, the Acting Director, FDIC as receiver, and FDIC in its corporate capacity. The court found that United Western Bank could proceed with its claims against OTS and the Acting Director, but that the claims of the bank's holding company and individual directors, as well as claims against FDIC, must be dismissed.
This order grants a motion for assignment of rights and restrains judgment debtors from certain financial activities. It assigns the judgment debtors' rights to payments (now and in the future) from various accounts, properties, lawsuits, trusts, individuals and entities to the judgment creditors until an outstanding judgment is paid in full. It also requires the judgment debtors to post an undertaking to stay enforcement of the order.
The Alleged Debtors filed a motion requesting the court's permission to file an unredacted version of their Motion to Transfer Venue under seal. They argue the unredacted version contains sensitive commercial information regarding their financial condition and restructuring negotiations that could harm their business if disclosed publicly. The Alleged Debtors state they have publicly filed a redacted version, and the unredacted version would only be available to the court and specific receiving parties subject to confidentiality restrictions. They believe this balancing of interests appropriately protects their sensitive information while still allowing for consideration of the merits of their transfer motion.
Doc770 order confirming trustee's amended plan of liquidation for the debtormalp2009
This order confirms the Trustee's Amended Plan of Liquidation for the debtor FirstPlus Financial Group, Inc. The order finds that:
1) The Plan complies with the applicable provisions of the Bankruptcy Code.
2) All parties received proper notice of the Plan and Confirmation Hearing.
3) The classification of claims and interests under the Plan satisfies the requirements of the Bankruptcy Code.
4) The Trustee has met his burden of proof to confirm the Plan.
Motion to amend judgment points & authorities- signedjamesmaredmond
This document is a motion to amend a judgment to add additional judgment debtors. It describes an underlying malpractice judgment against Stephen Gaggero for over $2 million. It details Gaggero's estate plan from 1997 whereby he transferred over $35 million in personal assets to various trusts, corporations, limited partnerships and limited liability companies. The motion argues that these entities should be added as judgment debtors as they are alter egos of Gaggero. It provides background on the entities and trusts, describes Gaggero's continued control over the assets, and argues the separate existence of the entities should be disregarded as they were created to shield Gaggero's assets from creditors like the judgment creditors in this case. The
This document is a motion filed in a US bankruptcy court requesting permission to file an unredacted version of a response under seal. It summarizes that the response contains sensitive commercial information about the debtors' financial condition and restructuring negotiations. The debtors argue the information could harm ongoing negotiations and business operations if disclosed publicly. They seek to file the unredacted version under seal and make it available only to specific parties.
The document summarizes key aspects of Subchapter V of the U.S. Bankruptcy Code, which was added in 2019 to provide a streamlined bankruptcy process for small businesses. Some notable features include a limited trustee role, no U.S. Trustee fees, tight deadlines, and abrogation of the absolute priority rule allowing the debtor to retain ownership under certain conditions. The eligibility criteria for Subchapter V and role of the Subchapter V trustee are also outlined. Recent court decisions addressing various eligibility and procedural issues in Subchapter V cases are summarized as the new law continues to be interpreted.
- Cordillera Golf Club, LLC filed for Chapter 11 bankruptcy and sought to retain PricewaterhouseCoopers LLP as its financial advisor.
- PwC has expertise in financial advisory services for distressed companies and experience working on bankruptcy cases.
- The application requests the court approve PwC's retention to provide services such as evaluating strategic alternatives, advising on cash flow projections, and assisting with required bankruptcy reports and schedules.
The court appoints a receiver to enforce a judgment against several judgment debtors. The receiver is given broad powers to investigate and take control of the debtors' assets and records. This includes investigating properties, business interests, bank accounts, transfers of assets, and employment of agents. The debtors are ordered to turn over financial documents and records to the receiver and are prohibited from interfering with the receiver or disposing of assets.
Doc962 freeman group motion compromise & settlement_ a walk-awaymalp2009
The Trustee filed a motion seeking court approval of a compromise and settlement agreement between the Trustee and the Freeman Parties. The agreement provides that Robert Freeman and David Ward will withdraw their respective $92,500 proof of claims against the estate with prejudice, and the Trustee will dismiss the Freeman Parties from an adversary proceeding. The agreement achieves a walk-away settlement and full mutual release of claims between the parties. The Trustee believes the settlement is in the best interest of creditors and the estate by avoiding substantial time and costs of litigation, despite believing there are good objections to the proof of claims.
The Individual Chapter 11 Double Whammy CondundrumJanine Lee
1) The Sixth Circuit held that the absolute priority rule continues to apply to individual debtors in Chapter 11 bankruptcy, meaning they can only retain post-petition property and not pre-petition property if creditors are not paid in full.
2) The case involved an individual debtor, Cardin, who owed over $1 million to Ice House but proposed a bankruptcy plan that would allow him to keep pre-petition assets while only paying Ice House $124,000.
3) The Sixth Circuit found that the 2005 bankruptcy law amendments subject individual Chapter 11 debtors to the "double whammy" of having to use both pre-petition property and post-filing earnings to repay creditors in order to
121815 - OBJECTION TO 120815 ORDER ON OBJECTION (Townsend Matter)VogelDenise
POWER WITH "WE THE PEOPLE" - KNOW YOUR LEGAL/LAWFUL RIGHTS TO OVERTHROW THE UNITED STATES OF AMERICA'S DESPOTISM GOVERNMENT and have a GOVERNMENT that WORKS for "WE THE PEOPLE!"
DECLARATION OF INDEPENDENCE - Overthrowing Despotism, Political Corruption, Judicial Corruption/Injustices. . . .HEALING and RESTORING a NATION!
The FDIC is proposing regulations that would impose requirements for foreign currency futures, options on futures, and options that an insured depository institution supervised by the Federal Deposit Insurance Corporation engages in with retail customers.
El documento analiza el cambio del modelo tradicional de consumo al consumo a través de aplicaciones móviles, especialmente en servicios como hospedaje, transporte y alimentación. Discute la innovación, aceptación por el mercado, falta de regulaciones legales apropiadas, estrategias de mercadeo y mayor rentabilidad de empresas que usan aplicaciones móviles. Proporciona ejemplos como sistemas de mensajería, carros compartidos y compra-venta entre usuarios.
Ser uniatlanticense significa sentirse parte de la universidad, compartir e involucrarse en ella, cuidar sus espacios y ofrecer soluciones a sus problemas. La autora sueña con una Universidad del Atlántico donde haya igualdad, amistad en lugar de rivalidad, sin abuso de poder y donde todos trabajen juntos por el medio ambiente y puedan acceder a los recursos, además de organizar actividades que involucren a toda la comunidad universitaria y sirva de ejemplo a nivel social.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking approval of procedures for interim compensation and reimbursement of expenses for professionals retained in the chapter 11 case. The motion requests that professionals be allowed to submit monthly fee applications for payment of 80% of fees and 100% of expenses, with interim fee applications submitted every three months. The procedures are intended to streamline the payment process in this large chapter 11 case.
This document is a motion filed in United States Bankruptcy Court requesting an order to shorten the notice period for a hearing on the appointment of a trustee. The motion was filed by petitioning creditors against Allied Systems Holdings, Inc. and Allied Systems, Ltd. (L.P.), who were recently subject to involuntary bankruptcy petitions. The motion argues that exigent circumstances exist due to conflicts of interest and mismanagement by the company's controlling shareholder, Yucaipa, that threaten creditor interests. As such, an expedited hearing is requested to consider appointing a trustee to assume control of the debtors.
This document discusses a bankruptcy court case regarding the sale of an internet domain name. The key points are:
1) The debtor (Heath Global) had agreed to purchase the "Invest.com" domain name from Jim Magner for $2 million in installments over two years.
2) After Heath Global missed an installment payment, Magner sent a notice purporting to terminate the agreement based on a clause allowing termination if a payment was not cured within 7 days.
3) Before the 7-day cure period expired, Heath Global filed for bankruptcy. The bankruptcy court found the agreement had automatically terminated pre-petition.
4) On appeal, the district court found that the agreement
The document provides a historical overview and summary of fraudulent transfer law in Vermont. It begins with the origins of fraudulent transfer law in 16th century England and discusses how various states, including Vermont, adopted versions of the Statute of 13 Elizabeth. It then summarizes Vermont's adoption of the Uniform Fraudulent Transfer Act in 1996 and how the Act modernized fraudulent transfer standards. The summary concludes by outlining the key elements, parties, remedies, standards of proof, and statute of limitations in fraudulent transfer cases under Vermont law.
This document is a bench ruling from a bankruptcy judge on a motion to compel arbitration related to a debtor's cash collateral motion. The judge analyzes applicable case law and determines that:
1) Whether a debtor has authority to use cash collateral is fundamentally a bankruptcy issue, not a contractual dispute.
2) The parties did not agree to arbitrate issues relating to a debtor's rights under the Bankruptcy Code, as those rights were created by Congress and differ from pre-bankruptcy contractual rights.
3) Therefore, the motion to compel arbitration of the debtor's cash collateral motion is denied, as use of cash collateral is a core bankruptcy issue not subject to the arbitration agreement.
King county-superior-court-order-on-rha-v-city-of-seattle-22421Roger Valdez
This order denies the plaintiffs' motion for summary judgment and grants the defendant's cross-motion for summary judgment. It finds that the three Seattle ordinances establishing defenses to eviction due to financial hardship during COVID-19 do not conflict with state law and are therefore not preempted. While the ordinance provision staying late fees is preempted, the rest can be harmonized with state eviction statutes as establishing substantive defenses rather than conflicting with the statutes' procedural framework. Controlling Washington precedent has established that the state eviction laws provide only procedures, not substantive rights, so local governments can permissibly provide additional defenses.
This document is a court opinion and order in a lawsuit between Century Indemnity Company and various defendants regarding insurance coverage for environmental contamination at a Superfund site. The court is considering a motion for summary judgment filed by third-party plaintiffs (various companies affiliated with Northwest Marine Inc.) against four insurance company defendants regarding those insurers' duties to defend the third-party plaintiffs in a CERCLA action related to the Superfund site. The court discusses the insurance policies at issue, the corporate history and succession of entities, and analyzes whether the policies trigger a duty to defend and if any policy exclusions apply.
United Western Bank v Office of Thrift Supervision-1Liana Prieto
This document summarizes a court case from the United States District Court for the District of Columbia regarding United Western Bank's challenge of the appointment of the Federal Deposit Insurance Corporation (FDIC) as the receiver of the bank by the Acting Director of the Office of Thrift Supervision (OTS). The court granted in part and denied in part motions to dismiss filed by OTS, the Acting Director, FDIC as receiver, and FDIC in its corporate capacity. The court found that United Western Bank could proceed with its claims against OTS and the Acting Director, but that the claims of the bank's holding company and individual directors, as well as claims against FDIC, must be dismissed.
This order grants a motion for assignment of rights and restrains judgment debtors from certain financial activities. It assigns the judgment debtors' rights to payments (now and in the future) from various accounts, properties, lawsuits, trusts, individuals and entities to the judgment creditors until an outstanding judgment is paid in full. It also requires the judgment debtors to post an undertaking to stay enforcement of the order.
The Alleged Debtors filed a motion requesting the court's permission to file an unredacted version of their Motion to Transfer Venue under seal. They argue the unredacted version contains sensitive commercial information regarding their financial condition and restructuring negotiations that could harm their business if disclosed publicly. The Alleged Debtors state they have publicly filed a redacted version, and the unredacted version would only be available to the court and specific receiving parties subject to confidentiality restrictions. They believe this balancing of interests appropriately protects their sensitive information while still allowing for consideration of the merits of their transfer motion.
Doc770 order confirming trustee's amended plan of liquidation for the debtormalp2009
This order confirms the Trustee's Amended Plan of Liquidation for the debtor FirstPlus Financial Group, Inc. The order finds that:
1) The Plan complies with the applicable provisions of the Bankruptcy Code.
2) All parties received proper notice of the Plan and Confirmation Hearing.
3) The classification of claims and interests under the Plan satisfies the requirements of the Bankruptcy Code.
4) The Trustee has met his burden of proof to confirm the Plan.
Motion to amend judgment points & authorities- signedjamesmaredmond
This document is a motion to amend a judgment to add additional judgment debtors. It describes an underlying malpractice judgment against Stephen Gaggero for over $2 million. It details Gaggero's estate plan from 1997 whereby he transferred over $35 million in personal assets to various trusts, corporations, limited partnerships and limited liability companies. The motion argues that these entities should be added as judgment debtors as they are alter egos of Gaggero. It provides background on the entities and trusts, describes Gaggero's continued control over the assets, and argues the separate existence of the entities should be disregarded as they were created to shield Gaggero's assets from creditors like the judgment creditors in this case. The
This document is a motion filed in a US bankruptcy court requesting permission to file an unredacted version of a response under seal. It summarizes that the response contains sensitive commercial information about the debtors' financial condition and restructuring negotiations. The debtors argue the information could harm ongoing negotiations and business operations if disclosed publicly. They seek to file the unredacted version under seal and make it available only to specific parties.
The document summarizes key aspects of Subchapter V of the U.S. Bankruptcy Code, which was added in 2019 to provide a streamlined bankruptcy process for small businesses. Some notable features include a limited trustee role, no U.S. Trustee fees, tight deadlines, and abrogation of the absolute priority rule allowing the debtor to retain ownership under certain conditions. The eligibility criteria for Subchapter V and role of the Subchapter V trustee are also outlined. Recent court decisions addressing various eligibility and procedural issues in Subchapter V cases are summarized as the new law continues to be interpreted.
- Cordillera Golf Club, LLC filed for Chapter 11 bankruptcy and sought to retain PricewaterhouseCoopers LLP as its financial advisor.
- PwC has expertise in financial advisory services for distressed companies and experience working on bankruptcy cases.
- The application requests the court approve PwC's retention to provide services such as evaluating strategic alternatives, advising on cash flow projections, and assisting with required bankruptcy reports and schedules.
The court appoints a receiver to enforce a judgment against several judgment debtors. The receiver is given broad powers to investigate and take control of the debtors' assets and records. This includes investigating properties, business interests, bank accounts, transfers of assets, and employment of agents. The debtors are ordered to turn over financial documents and records to the receiver and are prohibited from interfering with the receiver or disposing of assets.
Doc962 freeman group motion compromise & settlement_ a walk-awaymalp2009
The Trustee filed a motion seeking court approval of a compromise and settlement agreement between the Trustee and the Freeman Parties. The agreement provides that Robert Freeman and David Ward will withdraw their respective $92,500 proof of claims against the estate with prejudice, and the Trustee will dismiss the Freeman Parties from an adversary proceeding. The agreement achieves a walk-away settlement and full mutual release of claims between the parties. The Trustee believes the settlement is in the best interest of creditors and the estate by avoiding substantial time and costs of litigation, despite believing there are good objections to the proof of claims.
The Individual Chapter 11 Double Whammy CondundrumJanine Lee
1) The Sixth Circuit held that the absolute priority rule continues to apply to individual debtors in Chapter 11 bankruptcy, meaning they can only retain post-petition property and not pre-petition property if creditors are not paid in full.
2) The case involved an individual debtor, Cardin, who owed over $1 million to Ice House but proposed a bankruptcy plan that would allow him to keep pre-petition assets while only paying Ice House $124,000.
3) The Sixth Circuit found that the 2005 bankruptcy law amendments subject individual Chapter 11 debtors to the "double whammy" of having to use both pre-petition property and post-filing earnings to repay creditors in order to
121815 - OBJECTION TO 120815 ORDER ON OBJECTION (Townsend Matter)VogelDenise
POWER WITH "WE THE PEOPLE" - KNOW YOUR LEGAL/LAWFUL RIGHTS TO OVERTHROW THE UNITED STATES OF AMERICA'S DESPOTISM GOVERNMENT and have a GOVERNMENT that WORKS for "WE THE PEOPLE!"
DECLARATION OF INDEPENDENCE - Overthrowing Despotism, Political Corruption, Judicial Corruption/Injustices. . . .HEALING and RESTORING a NATION!
The FDIC is proposing regulations that would impose requirements for foreign currency futures, options on futures, and options that an insured depository institution supervised by the Federal Deposit Insurance Corporation engages in with retail customers.
El documento analiza el cambio del modelo tradicional de consumo al consumo a través de aplicaciones móviles, especialmente en servicios como hospedaje, transporte y alimentación. Discute la innovación, aceptación por el mercado, falta de regulaciones legales apropiadas, estrategias de mercadeo y mayor rentabilidad de empresas que usan aplicaciones móviles. Proporciona ejemplos como sistemas de mensajería, carros compartidos y compra-venta entre usuarios.
Ser uniatlanticense significa sentirse parte de la universidad, compartir e involucrarse en ella, cuidar sus espacios y ofrecer soluciones a sus problemas. La autora sueña con una Universidad del Atlántico donde haya igualdad, amistad en lugar de rivalidad, sin abuso de poder y donde todos trabajen juntos por el medio ambiente y puedan acceder a los recursos, además de organizar actividades que involucren a toda la comunidad universitaria y sirva de ejemplo a nivel social.
Megan Felipa Mittermayer-Madureira's CV summarizes her experience as head girl of her high school where she gained leadership skills working with students and teachers. She was an all-round athlete focused on swimming, hockey, and athletics, obtaining several awards and qualifications. Additionally, she participated in cultural activities like dance and cheerleading. Her work experience includes various waitressing and promotional jobs with good references. She is currently interning at a girls' high school as part of her Bachelor of Education degree.
Building Dedicated Development Teams with AvicomaTanya Kiseris
Avicoma provides dedicated software development teams as a service where they recruit qualified developers, set up infrastructure and provide ongoing support so clients can scale development capabilities quickly and save up to 60% on costs. Key services include building custom teams, managing all legal and financial responsibilities, and offering 24/7 infrastructure and talent management. An example is outlined where Avicoma helped a client grow their dedicated team to over 20 developers in the first year and now fully manages application updates and support.
The document summarizes the purpose and scope of the automatic stay provision in the US Bankruptcy Code (Section 362). It discusses how the automatic stay gives debtors breathing room from creditors, prevents unequal treatment of creditors, and allows for orderly reorganization or liquidation proceedings. The stay prohibits collection efforts, harassment, foreclosure actions, and generally fixes creditors' rights and priorities as of the petition date.
The U.S. Trustee plays a major role in monitoring Chapter 11 cases by overseeing the debtor's operations and financial reporting. The U.S. Trustee conducts creditor meetings, ensures compliance with reporting requirements, and can seek to convert a case or have a trustee appointed for noncompliance. A trustee can be appointed if the debtor is dishonest or mismanaging the business, or a party requests it. The trustee then takes over management of the business from the debtor in possession and must file a reorganization plan.
The document is the March 2016 newsletter of the RNZAFA Canterbury Branch which provides updates on upcoming branch events and activities, obituaries of deceased members, a report on a branch visit to a local Air Training Corps squadron, and historical information on the Airspeed Oxford aircraft used by the RNZAF. It also includes letters to the editor, advertisements, and lists the branch committee members and their roles.
The document discusses similarities and differences between the filmmakers' horror sequence and other films in the genre. It notes that the opening sequence uses POV camera angles similarly to The Blair Witch Project to create realism and fear. The sequence also takes place in the woods, uses a dark filter, and features a villain whose face is obscured - all conventions seen in The Blair Witch Project and Alien. However, the film focuses more on gender stereotypes than religious themes seen in The Exorcist. It keeps to conventions like isolated settings and the early death of innocent characters, but avoids including a promiscuous character or weapons typically seen in horror films to create a more realistic and gritty sequence.
Este documento presenta información sobre herramientas para presentar y pasos para publicar una página web. Explica los pasos para buscar sitios de hospedaje web gratuitos e incluye detalles de dos sitios. También describe los pasos para publicar una página web de manera gráfica. Finalmente, discute posibles variantes para la presentación dependiendo del público y entorno.
PANELISTS:
DAMIAN NASSIRI | CUONG M. NGUYEN
LYNDA T. BUI | ANN N. NGUYEN
National Conference of Vietnamese American Attorneys
NCVAA is the only national organization that provides a forum for distinguished Vietnamese American judges, elected officials and attorneys to celebrate our accomplishments in the U.S. and abroad, promote the high standards of professionalism in law and politics, and discuss legal and community issues affecting Vietnamese Americans.
Past guests, panelists and speakers of NCVAA include Vietnamese Americans that are prominent judges, highly regarded elected officials and accomplished attorneys: Hon. Thang Nguyen Barrett, Hon. Tam Bui, Hon. Jacqueline Duong, Prof. Wendy Duong, Viet V. Le, Hon. Jacqueline Nguyen, Madison Nguyen, Hon. Nho Nguyen, Tasha Nguyen, Prof. Xuan-Thao Nguyen, Thuy Thi Nguyen, Hon. Tu Pham, Assemblyman Van Tran, Prof. Nhan Vu and many more.
We have also been honored with the attendance of esteemed non-Vietnamese Americans that either gave speeches, sat as panelists or attended the events: Jeffrey Bleich (Pres. of CA State Bar), Hon. David O. Carter (U.S. District Court, Central District of CA) Hon. John Chiang (CA State Controller), Justice Ming W. Chin (California Supreme Court), Kamala Harris (San Francisco District Attorney), Peter McHugh (Santa Clara County Supervisor), Hon. Nathan Mihara (CA Sixth Appellate District Court of Appeals), Justice Carlos R. Moren (California Supreme Court), Hon. Alicemarie Stotler (Chief Judge of the US District Court, Central District of CA) and many others.
PANELISTS:
DAMIAN NASSIRI | CUONG M. NGUYEN
LYNDA T. BUI | ANN N. NGUYEN
National Conference of Vietnamese American Attorneys
NCVAA is the only national organization that provides a forum for distinguished Vietnamese American judges, elected officials and attorneys to celebrate our accomplishments in the U.S. and abroad, promote the high standards of professionalism in law and politics, and discuss legal and community issues affecting Vietnamese Americans.
Past guests, panelists and speakers of NCVAA include Vietnamese Americans that are prominent judges, highly regarded elected officials and accomplished attorneys: Hon. Thang Nguyen Barrett, Hon. Tam Bui, Hon. Jacqueline Duong, Prof. Wendy Duong, Viet V. Le, Hon. Jacqueline Nguyen, Madison Nguyen, Hon. Nho Nguyen, Tasha Nguyen, Prof. Xuan-Thao Nguyen, Thuy Thi Nguyen, Hon. Tu Pham, Assemblyman Van Tran, Prof. Nhan Vu and many more.
We have also been honored with the attendance of esteemed non-Vietnamese Americans that either gave speeches, sat as panelists or attended the events: Jeffrey Bleich (Pres. of CA State Bar), Hon. David O. Carter (U.S. District Court, Central District of CA) Hon. John Chiang (CA State Controller), Justice Ming W. Chin (California Supreme Court), Kamala Harris (San Francisco District Attorney), Peter McHugh (Santa Clara County Supervisor), Hon. Nathan Mihara (CA Sixth Appellate District Court of Appeals), Justice Carlos R. Moren (California Supreme Court), Hon. Alicemarie Stotler (Chief Judge of the US District Court, Central District of CA) and many others.
Bankruptcy Alert: The Second Circuit Condemns Chapter 11 Plan “Gifting”Patton Boggs LLP
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This document is a certificate of service for a response filed by Allied Systems Holdings, Inc. and Allied Systems, Ltd. (L.P.) regarding a motion by petitioning creditors BDCM Opportunity Fund II, LP, Black Diamond CLO 2005-1 Adviser L.L.C., and Spectrum Investment Partners LP to shorten time for a hearing on appointing a trustee. The certificate lists the parties that were served the response by mail or hand delivery on May 21, 2012.
This document summarizes a presentation by Terry W. Clemans on rapid rescoring and compliance infractions. The presentation discusses (1) new conflicts between various financial regulations regarding loan originator compensation and the rescoring of mortgages, (2) definitions of compensation under the relevant rules, and (3) issues with the Credit Repair Organization Act's prohibition of upfront fees for credit services that could restrict how rescoring fees are charged. The presentation seeks answers to compliance challenges but notes more legislative or regulatory action may be needed to resolve conflicts between the rules.
The petitioning creditors filed a motion requesting permission to file redacted versions of confidential pleadings and exhibits under seal in bankruptcy proceedings against Allied Systems Holdings, Inc. and Allied Systems, Ltd. The pleadings and exhibits contain confidential commercial information from credit agreements. The motion argues that public disclosure of this confidential information would violate the credit agreements.
This document summarizes a Tax Court memorandum opinion regarding the IRS's determination to maintain a tax lien against the petitioner. The petitioner proposed two offers-in-compromise and a partial payment installment agreement to settle his unpaid tax liabilities from 2000-2002, totaling around $65,000. The Tax Court found that the settlement officer did not abuse their discretion in rejecting the petitioner's collection alternatives because the offers-in-compromise were both less than the petitioner's reasonable collection potential as calculated under IRS guidelines, and the installment agreement lacked specified payment details. The court also found the settlement officer properly included the cash surrender value of the petitioner's life insurance policies as an asset in determining reasonable collection potential.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking authorization to retain and pay certain professionals utilized in the ordinary course of business without requiring each professional to file a formal application for employment. The motion proposed procedures for retaining ordinary course professionals, including requiring the professionals to file declarations of disinterestedness, limiting monthly payments to $25,000 per professional absent a fee application, and requiring the debtor to file quarterly reports on payments to the professionals. The debtor argued this relief was necessary to avoid disruption to its business operations and pending litigation matters.
The debtor, Cordillera Golf Club, LLC, filed a motion seeking authorization to retain and pay certain professionals utilized in the ordinary course of business without requiring each professional to file a formal application for employment. The motion proposed procedures for retaining ordinary course professionals, including requiring the professionals to file declarations of disinterestedness, limiting monthly payments to $25,000 per professional absent a fee application, and requiring the debtor to file quarterly reports on payments to the professionals. The debtor argued this relief was necessary to avoid disruption to its business operations and pending litigation matters.
Time Barred Mortgages in Bankruptcy 2.0Joseph Towne
This document discusses issues related to time barred mortgages in bankruptcy. It notes that both state and federal law are unclear on this issue. Filing a proof of claim on a time barred debt could violate the Fair Debt Collection Practices Act. The statute of limitations for mortgages in Florida is 5 years from acceleration, while the statute of repose is generally 20 years from execution. However, federal law may preempt these in some cases like with FDIC or SBA assigned mortgages. The document also discusses tolling provisions and issues around determining when a mortgage is time barred.
Duress renders a contract voidable. Originally, only duress to the person through actual or threatened violence was recognized. While duress to goods, such as unlawfully detaining property, was not considered sufficient to avoid a contract. However, modern developments have extended the definition of duress to include economic duress, where commercial pressure suppresses a party's will. All that is now required to prove duress is suppression of voluntary consent, rather than completely overbearing a party's will. Remedies for duress include setting aside the contract, damages for the tort of intimidation, and potentially damages even if the contract was affirmed.
This motion seeks to compel judgment debtor Stephen Gaggero to produce documents in response to a request for production from the judgment creditors Knapp, Petersen & Clarke, Stephen Ray Garcia, Stephen Harris, and Andre Jardini (KPC) related to enforcing their judgment. KPC argues that Gaggero's responses improperly withheld relevant documents and asserted invalid claims of privilege. KPC requests the court order production of the requested documents, award $10,840 in attorney fees for bringing this motion, and sanction Gaggero's attorney $5,000 for obstructing discovery.
This document discusses closing a loophole in the Fair Credit Billing Act (FCBA) regarding how credit card companies handle rebilled credit card charges. Currently, if a consumer disputes a charge but it is then rebilled by the merchant or creditor, the creditor can claim "no further responsibility" under the FCBA. The document argues this loophole should be closed by treating rebilled charges as new billing errors under the FCBA. It analyzes principles from corporate law on duty to monitor and from civil procedure on claim preclusion to support this position. Closing the loophole would better achieve the FCBA's intent of consumer protection and reduce future litigation risks for creditors.
EKEJIJA- NVC FUND-SEC SETTLEMENT SOLUTION
CASE: 2:20-cv-08985-ODW-DFM
Case No.: 2:20-cv-08985-FWS-DFM
Dear John F. Libby,
As requested by Judge Fred W. Slaughter, the undersigned, frank-ojogwa: Ekejija, comes now to submit in good faith for your favorable consideration a graceful workable solution to settle and resolve the above-referenced egregious case (the “Case”), according to the requirement of Rule 1 of the Federal Rules of Civil Procedure (“FRCP”), that “all civil actions and proceedings in the United States district courts … be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.”
The purpose of my proposal is to achieve the complete, final, fair, and equitable resolution of all of the financial, civil rights, and reputational damages and other civil claims I am holding against the U.S. Securities and Exchange Commission, an agency of the federal government (the “SEC”), arising out of and suffered in connection with the extreme quantifiable and unquantifiable economic and wrongs, injuries, damages, defamations, prejudices, and injustices done to our companies and me, by the SEC’s egregious, willful, wrongful, meritless, reckless, abusive, and vindictive crusade, undertaken under color of law and constitutes a gross breach of fidelity, over the past 11 years. That the SEC persisted in misusing and abusing its government authority, compounding these many wrongs long after it knew or should have known that its allegations were meritless, and the resulting compounding of its wrongful behavior, and that such conduct exposed the SEC and the federal government to ridicules, substantial financial and other liability, makes the situation even more outrageous.
Notwithstanding the foregoing, I am willing to settle and resolve this matter upon the terms and conditions summarized below. You will see that my proposal satisfies each of the requirements of FRCP Rule 1. Indeed, I am proposing to achieve the intended result by underwriting the financial elements of my claims out of our assets and at no cost to the government. Moreover, the structure and mechanisms of this proposal are eminently fair and reasonable by design and within your authority as a federal judge to implement.
Consumer Finance Class Actions & Litigation - Conference MaterialsRachel Hamilton
Consumer financial services companies are facing unprecedented regulatory and enforcement scrutiny and mounting litigation, and there is no sign of change coming anytime soon. That is why it is essential that in-house an outside counsel have a mastery of new class action trends, emerging theories of liability, the latest enforcement actions and regulatory initiatives, and the most effective defense and settlement strategies.
This document provides an overview and agenda for an interactive seminar on current developments in ERISA litigation. It summarizes key provisions of ERISA related to civil enforcement, fiduciary duties, statute of limitations, subrogation claims, employer stock fund litigation, and the contraceptive mandate. It also outlines Supreme Court cases on these issues like US Airways v. McCutchen on subrogation, pending cases like Fifth Third Bancorp v. Dudenhoeffer on the fiduciary duty regarding employer stock funds, and implications of decisions.
Counseling Financially Distressed Businesses Business Law 101Steven Silton
Bankruptcy can provide financially distressed businesses with relief from creditors and help reorganize viable businesses facing short-term problems. It offers tools like the automatic stay, which stops collection efforts and lawsuits, and the ability to terminate unfavorable contracts and leases. Bankruptcy can help with issues like bad contracts, trade debt, and foreclosures, but cannot solve problems like lack of revenue or uninterested investors. It allows businesses to term out or modify unsecured debt and tax debt through a repayment plan.
This document summarizes a court case, In re Bataa/Kierland, LLC, that examines the court's power to disqualify votes on chapter 11 reorganization plans under section 1126(e) of the Bankruptcy Code. The court provided an in-depth analysis of the historical context and legislative intent behind section 1126(e), which was meant to allow courts to override votes made in bad faith. However, more recent cases like Figter have defined bad faith very narrowly, focusing only on obvious fraud rather than votes made to serve ulterior motives beyond self-interest. As a result, creditors now have more flexibility to purchase claims in other classes to manipulate votes, so long as there is no overt
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Anti-Money Laundering (AML): What It Is, Its History, and How It Works
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NBI, Inc. and William J. Amann, Esq. presents: The Automatic Stay and Bankruptcy Litigation Straegy for Creditors and Debtors, April 2016
1. Page 1 of 32
NATIONAL BUSINESS INSTITUTE, INC.
PRESENTS
THE BANKRUPTCY CODE’S AUTOMATIC STAY, 11 U.S.C. §362
April 4, 2016, 11:00 A.M. EST to 12:30 P.M. EST
Via Teleconference Seminar (NBI Program # 72073)
Presented by
William J. Amann, Esq.
CRAIG, DEACHMAN & AMANN, PLLC
65A Flagship Drive
North Andover, MA 01845
978-702-3077
wamann@cda-law.com
&
Craig, Deachman & Amann, PLLC
1662 Elm Street
Manchester, NH 03101
603-665-9111
www.cda-law.com
A.THE PURPOSE OF THE AUTOMATIC STAY
11 U.S.C. § 362, known as the automatic stay, is one of the
most powerful, if not the most powerful, provisions of the
Bankruptcy Code. The automatic stay is one of the fundamental
debtor protections provided by the bankruptcy laws. It gives the
debtor a breathing spell from his creditors. It stops all
collection efforts, all harassment, and all foreclosure actions.
It permits the debtor to attempt a repayment or reorganization
plan, or simply to be relieved of the financial pressures that
drove him into bankruptcy.
The automatic stay also provides creditor protection.
Without it, certain creditors would be able to pursue their own
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remedies against the debtor's property. Those who acted first
would obtain payment of the claims in preference to and to the
detriment of other creditors. Bankruptcy is designed to provide
an orderly liquidation procedure under which all creditors are
treated equally. A race of diligence by creditors for the
debtor's assets prevents that.
In addition to protecting relative positions of creditors,
automatic stay is designed to shield Chapter 7 debtor from
financial pressure during pendency of bankruptcy proceeding. In
re Stringer (1988, CA9 Cal) 847 F2d 549, 17 BCD 1169, 19 CBC2d
233, CCH Bankr L Rptr P 72297.
Automatic stay is crucial provision of bankruptcy law and
prevents disparate actions against debtors and protects
creditors in manner consistent with bankruptcy goal of equal
treatment of creditors by ensuring that no creditor receives
more than equitable share of debtor's estate. Lincoln Sav. Bank,
FSB v Suffolk County Treasurer (In re Parr Meadows Racing Ass'n)
(1989, CA2 NY) 880 F2d 1540, 19 BCD 1125, CCH Bankr L Rptr P
73010, cert den (1990) 493 US 1058, 110 S Ct 869, 107 L Ed 2d
953 and (superseded by statute on other grounds as stated in In
re Fischer (1995, BC MD Tenn) 184 BR 41, 27 BCD 569, 34 CBC2d
99) and (superseded by statute on other grounds as stated in
Marc Stuart Goldberg, P.C. v City of New York (In re Navis
Realty) (1996, BC ED NY) 193 BR 998) and (criticized in Marine
3. Page 3 of 32
Midland Bank v Bennett Funding Group, Inc. (In re Bennett
Funding Group, Inc.) (1997, BC ND NY) 1997 Bankr LEXIS 2197) and
(criticized in In re Bennett Funding Group, Inc. (1997, BC ND
NY) 1997 Bankr LEXIS 2359) and (criticized in In re Marfin Ready
Mix Corp. (1998, BC ED NY) 220 BR 148, 40 CBC2d 199) and
(criticized in In re P.G. Realty Co. (1998, BC ED NY) 220 BR
773, 32 BCD 718) and (criticized in City of White Plains v A&S
Galleria Real Estate, Inc. (In re Federated Dep't Stores, Inc.)
(2000, BC SD Ohio) 243 BR 341, 43 CBC2d 906) and (superseded by
statute on other grounds as stated in 229 Main St. Ltd. Pshp. V
Department of Environmental Protection (In re 229 Main St. Ltd.
Pshp.) (2000, DC Mass) 251 BR 186, 51 Envt Rep Cas 1188).
Primary purpose of stay is to afford debtors in Chapter 11
reorganizations opportunity to continue their businesses with
their available assets. Small Business Admin. v Rinehart (1989,
CA8 SD) 887 F2d 165, 19 BCD 1508, 21 CBC2d 917, CCH Bankr L Rptr
P 73125 (criticized in In re Tillery (1995, BC WD Ark) 179 BR
576, 33 CBC2d 521).
Purpose of stay provisions of 11 USCS § 362, as regards
Chapter 13 proceedings, is to allow trustee to have opportunity
to inventory debtor's position before proceeding with
administration of case and drafters intended § 362(a)(7) as mere
stay of creditor's enforcement of setoff rights and not as
evisceration of substantive rights to sell. In re Hammett (1983,
4. Page 4 of 32
ED Pa) 28 BR 1012, 9 CBC2d 98, CCH Bankr L Rptr P 69211, 83-1
USTC P 9336, 52 AFTR 2d 5394.
11 USCS § 362 requires that set of facts occurring
prepetition and creating legal relationship be claim that must
be stayed unless it is excepted in 11 USCS § 362(b); purpose of
statute is to cover both those claims based upon fully accrued
prepetition causes of action and those claims based on
prepetition facts or relationships which may still be contingent
or un-matured. Baldwin-United Corp. v Paine Webber (1985, SD
Ohio) 57 BR 759, 14 BCD 374, 15 CBC2d 921.
Policy underlying 11 USCS § 362 as whole is to afford
immediate relief to debtor from understandably importunate
creditors, and also to prevent dissipation of debtor's remaining
assets before orderly, equitable distribution to creditors may
be effected. In re Compton Corp. (1988, ND Tex) 90 BR 798, app
dismd (1989, Em Ct App) 889 F2d 1104 and (criticized in Minn.
Corp. v First Alliance Mortg. Corp. (In re First Alliance Mortg.
Corp.) (2001, CD Cal) 264 BR 634).
Automatic stay of 11 USCS § 362 is merely recognition of
necessity for protection of estate from pending and additional
actions by creditors to recover collateral or collect debts;
orderly liquidation or rehabilitation is objective of such
section, not dismemberment of assets of debtor. In re Feimster
(1979, BC ND Ga) 3 BR 11, 6 BCD 131, 1 CBC2d 956.
5. Page 5 of 32
In Chapter 11 context, purpose of automatic stay is not as
end in itself but rather to facilitate reorganization; its
function so far as secured creditors are concerned is to
preserve their position, within equitable limits, during period
between filing of case and confirmation of plan of
reorganization. In re Mr. D Realty Co. (1983, BC SD Ohio) 27 BR
359.
One primary goal of automatic stay is to sort out creditors
into order of priority untainted by post-petition jockeying for
position; intended effect of stay, is to fix rights and
priorities as of time of petition filing and to prohibit any
further acts to advance those rights and priorities. In re Paul
(1986, BC DC Mass) 67 BR 342.
Purpose of automatic stay is to preserve what remains of
debtor's insolvent estate and to provide systematic equitable
liquidation procedure for all creditors, thereby preventing
chaotic and uncontrolled scramble for debtor's assets in variety
of uncoordinated proceedings in different courts. In re Sparks
(1995, BC ND Ill) 181 BR 341.
Manifest purpose of automatic stay provision is to act of
debtor's shield from proceedings which may adversely affect its
interest; this purpose will hardly be served by requiring
indefinite suspension of debtor's attempt to be relieved of
judgments with obvious effect of acting as debtor's sword
6. Page 6 of 32
against creditor's claims upon it. Shop in the Grove, Ltd. v
Union Federal Sav. & Loan Asso. (1982, Fla App D3) 425 So 2d
1138.
Purpose of automatic stay provision is to prevent
interference with debtor's property during involuntary
bankruptcy proceeding. Bishop v Geno Designs, Inc. (1982, Tex
App Tyler) 631 SW2d 581.
Subsection (a) defines the scope of the automatic stay,
by listing the acts that are stayed by the commencement of the
case. The commencement or continuation, including the issuance
of process, of a judicial, administrative, or other proceeding
against the debtor that was or could have been commenced before
the commencement of the bankruptcy case is stayed under
paragraph (1). The scope of this paragraph is broad. All
proceedings are stayed, including arbitration, license
revocation, administrative, and judicial proceedings.
Proceedings in this sense encompasses civil actions as well, and
all proceedings even if they are not before governmental
tribunals.
The provision in this first paragraph prohibiting the
issuance of process is designed to prevent the issuance of a
writ of execution by a judgment creditor of the debtor to obtain
property that was property of the debtor before the case, but
that was transferred, subject to the judgment lien, before the
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case. Because the other paragraphs of this subsection refer only
to property of the estate or property of the debtor, neither of
which apply to this kind of transferred property, they would not
prohibit pursuit of the transferred property by issuance of
process. Thus, the prohibition in this paragraph is included and
the judgment creditor is allowed to proceed by way of
foreclosure against the property, but not by a general writ of
execution (in the State court, or wherever the creditor obtained
the judgment) against the debtor and all of the debtor's
property.
The stay is not permanent. There is adequate provision
for relief from the stay elsewhere in the section. However, it
is important that the trustee have an opportunity to inventory
the debtor's position before proceeding with the administration
of the case. Undoubtedly the court will lift the stay for
proceedings before specialized or nongovernmental tribunals to
allow those proceedings to come to a conclusion. Any party
desiring to enforce an order in such a proceeding would
thereafter have to come before the bankruptcy court to collect
assets. Nevertheless, it will often be more appropriate to
permit proceedings to continue in their place of origin, when no
great prejudice to the bankruptcy estate would result, in order
to leave the parties to their chosen forum and to relieve the
bankruptcy court from many duties that may be handled elsewhere.
8. Page 8 of 32
Paragraph (2) stays the enforcement, against the debtor
or against property of the estate, of a judgment obtained before
the commencement of the bankruptcy case. Thus, execution and
levy against the debtors' prepetition property are stayed, and
attempts to collect a judgment from the debtor personally are
stayed.
Paragraph (3) stays any act to obtain possession of
property of the estate (that is, property of the debtor as of
the date of the filing of the petition) or property from the
estate (property over which the estate has control or
possession). The purpose of this provision is to prevent
dismemberment of the estate. Liquidation must proceed in an
orderly fashion. Any distribution of property must be by the
trustee after he has had an opportunity to familiarize himself
with the various rights and interests involved and with the
property available for distribution.
Paragraph (4) stays lien creation against property of
the estate. Thus, taking possession to perfect a lien or
obtaining court process is prohibited. To permit lien creation
after bankruptcy would give certain creditors preferential
treatment by making them secured instead of unsecured.
Paragraph (5) stays any act to create or enforce a lien
against property of the debtor, that is, most property that is
acquired after the date of the filing of the petition, property
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that is exempted, or property that does not pass to the estate,
to the extent that the lien secures a prepetition claim. Again,
to permit post-bankruptcy lien creation or enforcement would
permit certain creditors to receive preferential treatment. It
may also circumvent the debtors' discharge.
Paragraph (6) prevents creditors from attempting in any
way to collect a prepetition debt. Creditors in consumer cases
occasionally telephone debtors to encourage repayment in spite
of bankruptcy. Inexperienced, frightened, or ill-counseled
debtors may succumb to suggestions to repay notwithstanding
their bankruptcy. This provision prevents evasion of the purpose
of the bankruptcy laws by sophisticated creditors.
Paragraph (7) stays setoffs of mutual debts and credits
between the debtor and creditors. As with all other paragraphs
of subsection (a), this paragraph does not affect the right of
creditors. It simply stays its enforcement pending an orderly
examination of the debtor's and creditors' rights.
Subsection (b) lists five exceptions to the automatic stay. The
effect of an exception is not to make the action immune from
injunction. The court has ample other powers to stay actions
not covered by the automatic stay. Section 105, of proposed
title 11, derived from Bankruptcy Act § 2a(15), grants the power
to issue orders necessary or appropriate to carry out the
provisions of title 11. The bankruptcy courts are brought within
10. Page 10 of 32
the scope of the All Writs Statute, 28 U.S.C. 1651 (1970), and
are given the powers of a court of law, equity, and admiralty
(H.R. 8200, § 243(a), proposed 28 U.S.C. 1481). Stays or
injunctions issued under these other sections will not be
automatic upon the commencement of the case, but will be granted
or issued under the usual rules for the issuance of injunctions.
By excepting an act or action from the automatic stay, the bill
simply requires that the trustee move the court into action,
rather than requiring the stayed party to request relief from
the stay. There are some actions, enumerated in the exceptions,
that generally should not be stayed automatically upon the
commencement of the case, for reasons of either policy or
practicality. Thus, the court will have to determine on a case-
by-case basis whether a particular action which may be harming
the estate should be stayed.
With respect to stays issued under other powers, or the
application of the automatic stay, to governmental actions, this
section and the other sections mentioned are intended to be an
express waiver of sovereign immunity of the Federal government,
and an assertion of the bankruptcy power over State governments
under the Supremacy Clause notwithstanding a State's sovereign
immunity.
The first exception is of criminal proceedings against the
debtor. The bankruptcy laws are not a haven for criminal
11. Page 11 of 32
offenders, but are designed to give relief from financial over-
extension. Thus, criminal actions and proceedings may proceed in
spite of bankruptcy.
Paragraph (2) excepts from the stay the collection of
alimony, maintenance or support from property that is not
property of the estate. This will include property acquired
after the commencement of the case, exempted property, and
property that does not pass to the estate. The automatic stay is
one means of protecting the debtor's discharge. Alimony,
maintenance and support obligations are excepted from discharge.
Staying collection of them, when not to the detriment of other
creditors (because the collection effort is against property
that is not property of the estate), does not further that goal.
Moreover, it could lead to hardship on the part of the protected
spouse or children.
Paragraph (3) excepts any act to perfect an interest in
property to the extent that the trustee's rights and powers are
limited under section 546(a) of the bankruptcy code. That
section permits post-petition perfection of certain liens to be
effective against the trustee. If the act of perfection, such as
filing, were stayed, the section would be nullified.
Paragraph (4) excepts commencement or continuation of actions
and proceedings by governmental units to enforce police or
regulatory powers. Thus, where a governmental unit is suing a
12. Page 12 of 32
debtor to prevent or stop violation of fraud, environmental
protection, consumer protection, safety, or similar police or
regulatory laws, or attempting to fix damages for violation of
such a law, the action or proceeding is not stayed under the
automatic stay. Paragraph (5) makes clear that the exception
extends to permit an injunction and enforcement of an
injunction, and to permit the entry of a money judgment, but
does not extend to permit enforcement of a money judgment. Since
the assets of the debtor are in the possession and control of
the bankruptcy court, and since they constitute a fund out of
which all creditors are entitled to share, enforcement by a
governmental unit of a money judgment would give it preferential
treatment to the detriment of all other creditors.
Subsection (c) of section 362 specifies the duration of the
automatic stay. Paragraph (1) terminates a stay of an act
against property of the estate when the property ceases to be
property of the estate, such as by sale, abandonment, or
exemption. It does not terminate the stay against property of
the debtor if the property leaves the estate and goes to the
debtor. Paragraph (2) terminates the stay of any other act on
the earliest of the time the case is closed, the time the case
is dismissed, or the time a discharge is granted or denied
(unless the debtor is a corporation or partnership in a chapter
7 case).
13. Page 13 of 32
Subsection (c) governs automatic termination of the stay.
Subsections (d) through (g) govern termination of the stay by
the court on the request of a party in interest. Subsection (d)
requires the court, on request of a party in interest, to grant
relief from the stay, such as by terminating, annulling,
modifying, or conditioning the stay, for cause. The lack of
adequate protection of an interest in property of the party
requesting relief from the stay is one cause for relief, but is
not the only cause. As noted above, a desire to permit an action
to proceed to completion in another tribunal may provide another
cause. Other causes might include the lack of any connection
with or interference with the pending bankruptcy case. For
example, a divorce or child custody proceeding involving the
debtor may bear no relation to the bankruptcy case. In that
case, it should not be stayed. A probate proceeding in which the
debtor is the executor or administrator of another's estate
usually will not be related to the bankruptcy case, and should
not be stayed. Generally, proceedings in which the debtor is a
fiduciary, or involving post-petition activities of the debtor,
need not be stayed because they bear no relationship to the
purpose of the automatic stay, which is debtor protection from
his creditors. The facts of each request will determine whether
relief is appropriate under the circumstances.
14. Page 14 of 32
Subsection (e) provides a protection for secured creditors
that is not available under present law. The subsection sets a
time certain within which the bankruptcy court must rule on the
adequacy of protection provided of the secured creditor's
interest. If the court does not rule within thirty (30) days
from a request for relief from the stay, the stay is
automatically terminated with respect to the property in
question. In order to accommodate more complex cases, the
subsection permits the court to make a preliminary ruling after
a preliminary hearing. After a preliminary hearing, the court
may continue the stay only if there is a reasonable likelihood
that the party opposing relief from the stay will prevail at the
final hearing. Because the stay is essentially an injunction,
the three stages of the stay may be analogized to the three
stages of an injunction. The filing of the petition which gives
rise to the automatic stay is similar to a temporary restraining
order. The preliminary hearing is similar to the hearing on a
preliminary injunction, and the final hearing and order is
similar to a permanent injunction. The main difference lies in
which party must bring the issue before the court. While in the
injunction setting, the party seeking the injunction must
prosecute the action, in proceedings for relief from the
automatic stay, the enjoined party must move. The difference
does not, however, shift the burden of proof. Subsection (g)
15. Page 15 of 32
leaves that burden on the party opposing relief from the stay
(that is, on the party seeking continuance of the injunction) on
the issue of adequate protection.
At the expedited hearing under subsection (e), and at all
hearings on relief from the stay, the only issue will be the
claim of the creditor and the lack of adequate protection or
existence of other cause for relief from the stay. This hearing
will not be the appropriate time at which to bring in other
issues, such as counterclaims against the creditor on largely
unrelated matters. Those counterclaims are not to be handled in
the summary fashion that the preliminary hearing under this
provision will be. Rather, they will be the subject of more
complete proceedings by the trustees to recover property of the
estate or to object to the allowance of a claim.
Subsection (f) permits ex parte relief from the stay in
situations in which irreparable damage might occur to the stayed
party before there is opportunity for notice and a hearing under
the usual procedure. The Rules of Bankruptcy Procedure will
provide for a hearing soon after the issuance of any ex parte
order under this subsection.
Reach of stay is intended to be quite broad, and therefore
exceptions to stay should be read narrowly to secure broad grant
of relief to debtor. In re Stringer (1988, CA9 Cal) 847 F2d 549,
17 BCD 1169, 19 CBC2d 233, CCH Bankr L Rptr P 72297.
16. Page 16 of 32
The Automatic stay is fundamental to reorganization process
and its scope is intended to be broad. Small Business Admin. v
Rinehart (1989, CA8 SD) 887 F2d 165, 19 BCD 1508, 21 CBC2d 917,
CCH Bankr L Rptr P 73125 (criticized in In re Tillery (1995, BC
WD Ark) 179 BR 576, 33 CBC2d 521).
11 USCS § 362 is extremely broad in scope and should apply
to almost any type of formal or informal action against debtor
or property of estate. Delpit v Commissioner (1994, CA9) 18 F3d
768, 94 CDOS 1745, 94 Daily Journal DAR 3125, 25 BCD 590, 30
CBC2d 1745, 94-1 USTC P 50127, 73 AFTR 2d 1409, 94 TNT 51-32
(criticized in Roberts v Commissioner (1999, CA11) 175 F3d 889,
99-1 USTC P 50511, 83 AFTR 2d 2282, 12 FLW Fed C 782) and
(criticized in Spence v Brooks (2001, CA4 Va) 11 Fed Appx 175)
and (criticized in Haag v United States (2007, CA1 Mass) 485 F3d
1, 2007-1 USTC P 50473, 99 AFTR 2d 1986).
The scope of automatic stay provisions is broad and applies
to formal and informal proceedings against debtor; any action
taken in violation of automatic stay is void. In re Smith (1988,
WD Mich) 86 BR 92, affd in part and revd in part on other
grounds (1989, CA6 Mich) 876 F2d 524, 19 BCD 1097, CCH Bankr L
Rptr P 72936.
17. Page 17 of 32
Legislative history reveals clear congressional intent that
automatic stay be broadly enforced so as to preserve status quo
as of petition date, insure orderly administration of bankruptcy
estate, and prevent race among creditors. Pension Benefit Guar.
Co. v LTV Corp. (In re Chateaugay Corp.) (1988, SD NY) 87 BR
779, 17 BCD 1089, 9 EBC 2209, affd (1989, CA2 NY) 875 F2d 1008,
19 BCD 913, 10 EBC 2425, 111 CCH LC P 11200, 16 FR Serv 3d 400,
revd on other grounds, remanded (1990) 496 US 633, 110 S Ct
2668, 110 L Ed 2d 579, 20 BCD 1075, 22 CBC2d 1237, 12 EBC 1593,
CCH Bankr L Rptr P 73423 and (Abrogated as stated in Cohen v JP
Morgan Chase & Co. (2007, CA2 NY) 498 F3d 111).
Although scope of automatic stay is undeniably broad, it
does not serve to stay all actions involving bankrupt party;
rather, reach of automatic stay is limited by its purpose. Rett
White Motor Sales Co. v Wells Fargo Bank (1989, ND Cal) 99 BR
12, CCH Bankr L Rptr P 72814.
Congress intended automatic protection afforded by
automatic stay provisions of 11 USCS § 362 to be far reaching
and to eliminate previously existing limited perimeters of
Bankruptcy Code automatic stay; scope of protection under 11
USCS § 362 is broad and was designed to reach all proceedings,
including license revocations, arbitrations, administrative and
judicial proceedings, and its operation is no longer limited to
civil action, but includes proceedings even if they are not
18. Page 18 of 32
before governmental tribunals. In re R. S. Pinellas Motel
Partnership (1979, BC MD Fla) 2 BR 113, 5 BCD 1292, 1 CBC2d 349,
CCH Bankr L Rptr P 67384, 53 ALR Fed 611.
The scope of automatic stay is broad and encompasses all
proceedings, even those not before governmental tribunals. In re
Elsinore Shore Associates (1986, BC DC NJ) 66 BR 723, 15 BCD
420, 15 CBC2d 1128, CCH Bankr L Rptr P 71553.
The Automatic stay provision is very broad, and any
exceptions to it must be strictly construed to further purposes
of automatic stay. Gunther v Glabb (In re Glabb) (2001, BC WD
Pa) 261 BR 170.
Chapter 7 debtors were entitled to recovery of their
attorney's fees incurred in bringing motion for stay violation
under 11 USCS § 362 by creditor's law firm, which was obligated
to turn over funds garnished under Colo. R. Civ. P. 103 §
6(a)(1)to chapter 7 trustee under 11 USCS § 542(a), although
debtors were not entitled to funds as cash collateral under 11
USCS § 363(a). In re Trujillo (2012, BC DC Colo) 485 BR 238.
Automatic stay provision is purposely broad in its reach so
as to prevent dismemberment of debtor's estate in chaotic and
uncontrolled scramble for debtor's assets in variety of
uncoordinated proceedings in different courts. Stone v George F.
Richardson, Inc. (1983) 169 Ga App 232, 312 SE2d 339 (ovrld in
19. Page 19 of 32
part on other grounds by State v Glover (2007) 281 Ga 633, 641
SE2d 543, 2007 Fulton County D R 488).
The Automatic stay is broad in scope and applies in almost
any type of action against debtor or property of estate; it
stays collection efforts, harassment, and interference with
debtor's assets. General Motors Acceptance Corp. v Yates Motor
Co. (1981) 159 Ga App 215, 283 SE2d 74.
The Automatic stay is critical protection of bankruptcy law
and quite broad in its scope. Ramirez v Fuselier (In re Ramirez)
(1995, BAP9 Cal) 183 BR 583, 95 CDOS 5397, 95 Daily Journal DAR
8390, CCH Bankr L Rptr P 76595, app dismd (1999, CA9 Cal) 201
F3d 444, reported in full (1999, CA9) 1999 US App LEXIS 26239.
B.CREDITOR STRATEGIES
Whether you represent creditors or debtors, it is valuable
to know some basic strategies. With that said, I’ll share with
you what a more experienced debtor’s counsel told me at a
deposition in a complex chapter 11 case more than a decade ago.
I was representing a secured creditor who had filed a
motion for relief in order to foreclose on various parcels of
real estate. Debtor’s counsel told me (in his typical,
threatening fashion) that I had “gone too far” in pressing my
motion for relief. Well, I soon found out what he meant when
the debtor filed a host of adversary proceedings against my
20. Page 20 of 32
client seeking to re-characterize the debt to equity and to
otherwise subordinate our debt to other claimants. In the end,
after years of protracted litigation, we obtained the property.
But not without a fairly high cost in time and money. This isn’t
meant to discourage filing motions for relief; just be aware of
the full picture in the case, if you can, before filing.
Discussing and addressing concerns before filing, at least in a
chapter 11 case, is often advisable.
So, the first thing to understand is what a moving creditor
wants and whether there are other things which can be offered,
in way of adequate protection or plan concessions (in a Chapter
11). Quite simply, if your case involves a personal debtor and
you are dealing with consumer goods (be it a house, car, boat or
other secured asset), the approach is simple-you often just file
first and ask questions or negotiate afterwards. Is there
something the debtor can offer to temporarily satisfy or placate
the creditor? Is there equity in the asset? Can you offer a
better alternative to foreclosure or repossession? Are there
offensive maneuvers you can make if the creditor refuses to
deal?
I am reminded of a small business case where I represented
a small business owner (debtor) against a very aggressive
creditor. The creditor took the position that the equipment
contract (for the company’s large manufacturing equipment) was a
21. Page 21 of 32
lease and under the Code, the debtor had to assume or reject and
more importantly, had to get current if it wanted to retain the
equipment. We took the position that the equipment contract was
not a true lease (under the U.C.C.) but rather was a loan; a
loan which could be crammed-down since the value of the
equipment was far less than the outstanding balance due. We
offered adequate protection, we offered additional cash
collateral and we asked to re-write or modify the equipment
contract. None of these offers were appealing to the zealous
creditor. So, we filed an adversary proceeding to determine
whether the equipment contract was a lease or a loan. We
survived the creditor’s motion to dismiss. Soon after that
hearing, the creditor became remarkably receptive to a principal
write down and adequate protection. Because of this, the
company survived for several more years. The owner (who was an
interesting character, had a Ph.D. And had a bush pilot’s
license) ultimately decided to close up shop and move to South
America. Yet, knowing the right strategy to counter the motion
for relief enabled him and his family to keep the business
going, earn much needed money and divest themselves (legally) of
debt-laden assets. The case converted to a 7, he received a
discharge and I’d like to think he’s happily flying a cargo
plane over Brazilian skies.
22. Page 22 of 32
Creditors typically take definite and predictable paths
with motions for relief depending on the case chapter and how
intricate the relationship between the debtor and creditor is.
In a consumer chapter 7 case with a bank mortgagee, there’s
usually little negation or creativity. The bank will seek
relief almost immediately and just seek the return of its
collateral.
In a chapter 13, if the creditor is a mortgagee, it will
typically seek relief for any post-petition default such as
delinquent post payments, unpaid real estate taxes or lack of
insurance.
In a business case, usually a chapter 11 if a motion for
relief is involved, there are a myriad of creditor approaches.
Chapter 11 is beyond the scope of this discussion. However, it
is wise to determine how aggressive, if you are representing a
creditor, you can and want to be. While being aggressive is
usually a smart move, you want to be careful not to “go too
far”. For example, in a chapter 11 case I am involved with now,
I represent a creditor which holds a first mortgage on several
rental properties. We are incredibly over-secured. Under §
506(b), the over-secured creditor is entitled to post-petition
interest on their claim until payment of their claim or until
the effective date of the plan. Rake v. Wade [508 U.S. 464], 113
S.Ct. 2187, 2190 [124 L.Ed.2d 424] (1993); In re Laguna, 944
23. Page 23 of 32
F.2d 542, 544 (9th Cir.1991), cert. denied [503 U.S. 966], 112
S.Ct. 1577 [118 L.Ed.2d 219] (1992). The U.S. Supreme Court has
held that the language of § 506(b) entitles holders of both
consensual and nonconsensual over-secured claims to post-
petition interest on their claim. U.S. v. Ron Pair Enterprises,
Inc., 489 U.S. 235 [109 S.Ct. 1026, 103 L.Ed.2d 290] (1989).
So, being over-secured means, in essence, that the creditor will
eventually be paid in full. While my aggressive creditor client
wants to foreclose and have its outstanding loan paid in full as
soon as possible, there aren’t any good grounds right now to
file a motion for relief. Instead, we struck a very favorable
post-petition interest rate for cash collateral payments and the
debtor is either going to sell some or all of the properties or
refinance. If that does not occur within the next six (6)
months, we will likely move for relief then but until now we are
being paid at 12% and will, in the context of either a Proof of
Claim, §363 sale motion or an In re Till motion, seek repayment
based upon the post-petition, default rate of 25%. And since we
are over-secured, we are likely to win. And given that the
debtor is currently paying us at 12% (with the other 13%
accruing), it has a real incentive to sell or refinance quickly.
So, from a strategy standpoint, knowing one’s relative
position is critical. In this same case, the debtor is filing
an adversary against the second position mortgagee claiming
24. Page 24 of 32
usury and taking aim at the perfection of the mortgage. By
working with the debtor when advantageous and prudent, we avoid
pushing the debtor into a corner, where they will most likely
come out swinging.
C.DETERMINING VIOLATIONS
Let’s discuss In re A & J Auto Sales, Inc., d/b/a Wise Auto
Sales, Debtor; A & J Auto Sales, Inc., d/b/a Wise Auto Sales v.
United States of America, Civil No. 97-294-SD, 223 B.R. 839. In
a bankruptcy appeal, appellant A & J Auto Sales, Inc., d/b/a
Wise Auto Sales (A & J), sought review of the bankruptcy court's
order finding that the Internal Revenue Service (IRS) willfully
violated the automatic stay, but declined to award damages for
civil contempt under 11 U.S.C. § 105. The IRS cross-appealed,
arguing that the bankruptcy court erred by finding the IRS
willfully violated the automatic stay. The appeal raised three
issues of unsettled law; i.e., the proper standard for
determining whether a violation of the automatic stay is
willful, whether corporations can recover damages pursuant to 11
U.S.C. § 362(h), and whether the court could award damages for a
violation of the automatic stay pursuant to 11 U.S.C. § 105.
The court must first determine whether the IRS violated the
automatic stay at all. The Bankruptcy Code provides that filing
a bankruptcy pre-petition "operates as a stay, applicable to all
entities, of . . . any action to obtain possession of property
25. Page 25 of 32
of the estate or of property from the estate or to exercise
control over property of the estate." 11 U.S.C. § 362(a)(3). The
bankruptcy court found that "the IRS's actions in removing the
cars from the Debtor's premises and retaining them post-petition
were actions to obtain possession of property of the estate or
to exercise control over property of the estate.'" A & J Auto
Sales, Inc., v. United States (In re A & J Auto Sales), 210 B.R.
667, 670 (Bankr. D.N.H. 1997). The IRS, however, argued that the
seizure was completed prepetition when it served the debtor with
notice of seizure and tagged the vehicles. And "the removal of
vehicles from the lot after a valid prepetition seizure did not
constitute a violation of the automatic stay."
As an initial matter, the court noted that the vehicles
remained property of the bankruptcy estate even after the IRS
seized them. Property of the estate is defined broadly to
include any property to which the estate has some right. See 11
U.S.C. § 541; United States v. Whiting Pools, Inc., 462 U.S.
198, 204, 76 L. Ed. 2d 515, 103 S. Ct. 2309 (1983) ("Congress
intended a broad range of property to be included in the
estate"). Thus the United States Supreme Court has held that a
"reorganization estate includes property of the debtor that has
been seized by a creditor prior to the filing of a petition for
reorganization . . ." Whiting Pools, supra, 462 U.S. at 209.
"The creditor with a secured interest in property included in
26. Page 26 of 32
the estate must look to [the Bankruptcy Code] for protection,
rather than to the non-bankruptcy remedy of possession." Id. at
204. "The Bankruptcy Code provides secured creditors various
rights, including the rights to adequate protection, and these
rights replace the protection afforded by possession." Id. at
207. Furthermore, "the [IRS]'s interest in seized property is
its lien on that property." Id. at 210. Thus the debtor retains
an interest in property that has been seized by the IRS, making
it property of the estate. The District Court found, on appeal,
that the IRS willfully violated the automatic stay.
Section 362(k)(1) of the Bankruptcy Code provides, with
certain exceptions, that “an individual injured by a willful
violation of a stay provided by this section shall recover
actual damages, including costs and attorneys’ fees, and, in
appropriate circumstances, may recover punitive damages.” “A
willful violation does not require a specific intent to violate
the automatic stay. The standard for a willful violation of the
automatic stay under [§ 362(k)(1)] is met if there is knowledge
of the stay and the defendant intended the actions which
constituted the violation.” Fleet Mortgage Group, Inc. v. Kaneb
(In re Kaneb), 196 F.3d 265, 269 (1st Cir. 1999).
In a case I successfully defended nine (9) years ago, see
Cunha v. Ablitt & Caruolo, P.C. (In re Cunha), 2007 BNH 003
(finding in favor of the defendant that postponement of a
27. Page 27 of 32
foreclosure sale (1) prior to confirmation of the debtor’s
chapter 13 plan, (2) while a motion to dismiss or a motion for
relief is pending, is an action to maintain the status quo and
is not a violation of the automatic stay under § 362(a)(1)
because defendant has a reasonable expectation that it may
obtain relief from the stay.)
Many courts have held that postponing the date of a
foreclosure sale does not violate the automatic stay. See In re
Roach, 660 F.2d 1316, 1319 (9th Cir. 1981); Zeoli v.
RIHT Mortgage Corp., 148 B.R. 698, 702 (D.N.H. 1993); Atlas
Machine & Iron Works, Inc. v. Bethlehem Steel Corp. (In re Atlas
Machine & Iron Works, Inc.), 239 B.R. 322, 332 (Bankr. E.D. Va.
1998). The rationale for such a holding is that postponing the
foreclosure sale maintains the status quo between creditor and
debtor as of the petition date. See Zeoli, 148 B.R. at 700.
According to Zeoli, while postponement of a foreclosure sale is
an “act,” it is not an act in “continuation” of a proceeding
“against the debtor” prohibited by § 362(a)(1). See id. at 701.
“Rather, it is more appropriately characterized as an act in
preservation of a stayed proceeding.” Id. However, this Court
has previously held that repeated postponements of a foreclosure
sale over a protracted period of time - when a debtor was
current in post-petition payments, no motion for relief was
pending and a chapter 13 plan to cure a prepetition arrearage
28. Page 28 of 32
was pending constituted harassment of a debtor and did not
constitute the maintenance of the status quo of a stayed
foreclosure sale. Sherkanowski v. GMAC Mortgage Corp. (In re
Sherkanowski), 2000 BNH 029, 10. In a companion case, where I
was not so fortunate, see Michaud v. Ablitt & Caruolo, P.C. (In
re Michaud), 2007 BNH 002 (finding in favor of the plaintiff
that postponement of a foreclosure sale (1) after confirmation
of the debtor’s chapter 13 plan, (2) when the debtor is current
on post-petition payments, and (3) in the absence of a pending
motion for relief, cannot be considered maintaining the status
quo and is a violation of the automatic stay under § 362(a)(1)).
Luckily, the Court found minimal damages. Remedies for stay
violations are a separate subject beyond the scope of these
materials but are governed by the Code and there is a plethora
of case law in that area as well. Section 362(k)(1) provides
that “an individual injured by any willful violation of a stay
provided by this section shall recover actual damages, including
costs and attorneys’ fees . . . .” “The burden is on the debtor
to prove by a preponderance of the evidence that she suffered
damages as a result of the stay violation.” Heghmann v. Hafiani
(In re Heghmann), 316 B.R. 395, 404-05 (B.A.P. 1st Cir. 2004).
McAdam v. Lorden (In re McAdam), 2004 BNH 022 (granting the
Defendant's motion to dismiss the Plaintiff's complaint for
damages for violation of the automatic stay finding that under
29. Page 29 of 32
New Hampshire law, the Debtor did not retain any interest in her
residence by reason of her continued occupancy of the premises
protected by the automatic stay after the foreclosure sale was
completed and that the foreclosed property's purchaser's attempt
to remove the Debtor from the foreclosed property did not
violate the automatic stay). The automatic stay imposed by § 362
does not apply to property unless the debtor or the bankruptcy
estate has an interest therein. See § 541(a)(1). Under New
Hampshire law, the mortgagor does not have a right of redemption
after foreclosure. See N.H. Rev. Stat. Ann. § 479:18 (2001).
Furthermore, title to the foreclosed premises shall pass to the
purchaser free and clear of all interests and encumbrances which
do not have priority over such mortgage upon the recording of
the deed and affidavit. See N.H. Rev. Stat. Ann. § 479:26
(2001); See also Barrow v. Boles, 141 N.H. 382, 393 (1997)
(“Even though legal title does not pass until the deed has been
recorded . . . ‘this rule does not change the fact that [the
debtor] possessed neither a legal nor an equitable interest in
the property once the auctioneer’s hammer fell and the
memorandum of sale was signed.’”) (citation omitted). The Court
notes that the Plaintiff does not dispute that the foreclosure
deed was properly recorded. Because the Plaintiff lost her
legal and equitable interests in the property by virtue of the
foreclosure sale and subsequent recording of the foreclosure
30. Page 30 of 32
deed, the Subject Property ceased to be the property of the
estate for purposes of § 541. See In re Rodgers, 333 F.3d 64
(2nd Cir. 2003) (holding that because the debtor’s legal or
equitable interest did not survive the foreclosure auction, the
foreclosed property is no longer property of the estate). As a
result, the automatic stay is not applicable to the Defendant’s
actions to have the Plaintiff removed from the Subject Property.
As an example of a non-violation in the context of a town
enforcing a zoning ordinance see Patton v. Town of Orford (In re
Patton), 323 B.R. 311 (Bankr. D.N.H. 2005) (granting the
Defendant's motion for summary judgment based on § 362(b)(4) and
denying the Plaintiffs/Debtors’ cross-motion for summary
judgment finding that (1) under the holding of Cournoyer v. Town
of Lincoln, 790 F.2d 971 (1st Cir. 1986), the town's enforcement
of a zoning ordinance, when the debtors violated the junkyard
statute but refused to abate the violation, is excepted from the
automatic stay pursuant to § 362(b)(4); (2) the legal fees
associated with the actions by the town to enforce the junkyard
statute are, as costs of removal, also protected by § 362(b)(4);
and (3) the doctrine of collateral estoppel bars the Debtors
from relitigating the issue of a commercial reasonableness of
the sale of the vehicles because this issue was fully and fairly
litigated in state court).
31. Page 31 of 32
D. STAY’S AFFECT ON THE STATUTE OF LIMITATIONS
Bankruptcy Code § 108(c), among other things, extends state
statutes of limitation on claims by creditors who are prevented
by the automatic stay from taking timely action to assert those
claims. The statute reads, in pertinent part as follows:
[I]f applicable non-bankruptcy law ... fixes a period
for commencing or continuing a civil action in a court
other than a bankruptcy court on a claim against the
debtor, ... and such period has not expired before the date
of the filing of the petition, then such period does not
expire until the later of—
(1) the end of such period, including any suspension
of such period occurring on or after the commencement
of the case; or
(2) 30 days after notice of the termination or
expiration of the stay under section 362 ... of
this title ... with respect to such claim.
Recognizing that a petition in bankruptcy could sometimes
give a debtor unfair advantage over a claimant by allowing the
debtor to remain under the protection of the automatic stay
until the limitation period governing the claimant's action had
expired, see Meyer v. Cunningham, 196 Ark. 1097, 121 S.W.2d 90
(1938) (party’s claim barred by the statute of limitations even
though limitation period ran during time that automatic stay
prohibited party from bringing the action); American Woolen Co.
v. Samuelson, 226 N.Y. 61, 123 N.E. 154 (1919) (same) congress
acted to solidly preserve the rights of a party “stayed from
commencing or continuing an action against the debtor because of
32. Page 32 of 32
the bankruptcy case”. S.R.Rep. No. 95-989, 95th Cong., 2d Sess.
30 (1978); H.R. No. 95-595, 95th Cong., 2d Sess. 318 (1978),
U.S.Code Cong. & Admin. News 1978, p. 5787. It did so by
extending the period for “commencing or continuing a civil
action” against the debtor to, at a minimum, 30 days after
termination or expiration of the automatic stay. 11 U.S.C. §
108(c). Morton v. Bank of New York City (In re Morton), 866
F.2d 561, 566 -67 (2d Cir. 1989) (emphasis added). See also
Shamus Holdings, 642 F.3d at 266-67.
NOTE: IF YOU WOULD LIKE TO RECEIVE A FORM MOTION FOR RELIEF, PLEASE
CONTACT THE AUTHOR, WILLIAM J. AMANN, ESQ. AT WAMANN@CDA-LAW.COM SO THAT I MAY
OFFER YOU THE BEST, POSSIBLE FORM TAILORED TO YOUR CHAPTER AND CASE. THANK YOU.
END OF MATERIALS