%1

We are closing to books on an eventful 2023 and looking forward to a busy 2024. Between the travails of FTX and the numerous lesser frauds, the expertise of our members is in constant demand. This coming year, we plan to host webinars and committee video calls, which will resemble webinars but will be interactive. The plan for the video calls is to have short presentations on topics of interest (10 minutes maximum), followed by a group discussion. Some of our favorite classes this year were seminars rather than lectures.

The Supreme Court may have expanded the types of debts that are exempt from discharge under § 523 of the Code. In Bartenwerfer v. Buckley [1], the Court held that § 523 bars the discharge of a debt arising from fraud committed by the debtor’s business partner. While this result appears to be both straightforward and uncontroversial, the broad language used by the Court raises the possibility of expanded objections to dischargeability under § 523.

The Bankruptcy Code includes nine defenses to a trustee’s ability to avoid a pre-petition transfer as a preference. One of those defenses — codified at 11 U.S.C. § 547(c)(4) — allows a creditor “who provides new value after receiving a preferential transfer [to] use that new value [1] to offset its preference liability.”[2] The defense — sometimes called the “subsequent new value” defense — is fairly easy to apply. Consider the following example:

Articles in theABI Journal, [1] committee newsletters [2] and conference materials [3] have been addressing various circumstances in which nonbankruptcy alternatives, such as receiverships and assignments for the benefit of creditors (ABC), offer strategic benefits to bankruptcy proceedings.