December 02, 2024

A Business that Never Generated Income Is Eligible for Subchapter V, Judge Norman Says

The definition of ‘small business’ uses the word ‘activities,’ not ‘operations,’ making nonoperating small business eligible for Subchapter V.

5th Circuit, Texas, Texas Southern District

November 26, 2024

Class Action Commonality Justifies an ‘Opt Out’ Plan for Nondebtor Releases

With an exception, cases after Purdue are pointing toward approval of nondebtor releases where creditors are only allowed to opt out.

2nd Circuit, New York, New York Northern District

November 25, 2024

Purdue Creditors Given Derivative Standing to Sue the Sacklers

Bankruptcy Judge Sean Lane says that Delaware corporate law can’t prevent committees from having derivative standing.

2nd Circuit, New York, New York Southern District

November 19, 2024

Chicago District Judge Decides that Sub V Debtors Can Have Nondischargeable Debts

Reversing the bankruptcy court, the Chicago district judge follows the Fourth and Fifth Circuits and rejects a contrary holding by the Ninth Circuit BAP.

7th Circuit, Illinois, Illinois Northern District

November 18, 2024

Judge Thorne Describes the Quantum of Evidence Needed to Show a Plan Is Fair and Equitable

Although a ‘true-up’ cannot be imposed, a debtor could employ a ‘true-up’ to confirm an otherwise nonconfirmable plan.

7th Circuit, Illinois, Illinois Northern District

November 15, 2024

Sub V Trustee in Chapter 11 Can’t Be Enlisted to Pursue Avoidance Actions

District judge decides that an individual debtor has standing to appeal conversion from Subchapter V of chapter 11 to chapter 7.

2nd Circuit, New York, New York Southern District

November 14, 2024

Barring Use of an Online Payment Platform Was an Automatic Stay Violation

Bankruptcy Judge Michelle Harner decided that a mortgage servicer must allow a chapter 13 debtor’s continued use of an online payment platform.

4th Circuit, Maryland

November 13, 2024

Notice of Intention to Assume Is Enough to Beat the Automatic Rejection Deadline

A bankruptcy judge in New Jersey holds that it’s enough to file a notice of intention to assume before the automatic lease rejection deadline

3rd Circuit, New Jersey

November 12, 2024

Judicial Immunity Can Protect a Trustee when Barton Doesn’t Apply, Circuit Says

When a trustee mistakenly seizes a nondebtor’s property, the Barton doctrine by itself doesn’t protect the trustee, but judicial immunity does.

11th Circuit

November 11, 2024

Standard Deviation Can’t Be the Only Test to Prove the ‘Ordinary Course’ Defense

District judge in Delaware says that expert testimony must establish whether standard deviation is a proper statistical test to prove the ‘ordinary course’ defense to a preference.

3rd Circuit, Delaware