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The Hawaii Bankruptcy Court’s ruling in In re Minesen Co. [1] is a cautionary tale of how seemingly innocuous contract language can have unintended consequences — effectively waiving applicable nonbankruptcy law and overriding contract language to allow assignment without counterparty consent. Well-established federal law protects certain contracts (commonly IP contracts) from being assigned in a chapter 11 or other bankruptcy proceeding without counterparty consent.
Now more than ever, companies have been in distress and facing financial troubles since the COVID-19 pandemic struck the globe. Following the expiration of federal and state financial assistance to businesses, such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and other grants and loan programs, companies must understand their options for reorganizing or liquidating their businesses in an orderly manner.
In the much-discussed decision of City of Chicago v. Fulton[1], the Supreme Court ruled that a creditor’s continued retention of estate property that was seized pre-petition does not violate the automatic stay under § 362(a)(3) [2] of the Bankruptcy Code. Yet the majority opinion and Judge Sotomayor’s concurrence emphasized that the Court’s ruling was limited to § 362(a)(3).
2021 has been an incredibly productive year for the Young and New Members Committee. The committee continued to produce high-quality newsletters and educational programs, while branching out and trying some new things, too. Below are some highlights.
Can chapter 13 debtors deduct voluntary 401(k) contributions under § 541(b)(7)(A) when calculating disposable income? If so, can they plan for bankruptcy in good faith by making pre-petition 401(k) plan contributions to their 401(k) plans prior to filing to decrease their disposable income? The Sixth Circuit recently broke with dicta from Seafort v.
As the Young and New Members Committee, we (unsurprisingly) count many young and new members among our ranks. Many of our members may be new to practice or to the insolvency field, and/or new to ABI. It can be daunting to navigate a new role, new industry and new organization. The Y&NM Committee leadership recognizes this, so we thought we would take a moment to share our advice on how to make the most of a new opportunity. Without further ado, here is our advice for young and new members (and those young and new at heart!).
The Small Business Reorganization Act (SBRA) became effective in February 2020.[1] The SBRA, or subchapter V, is intended to encourage small businesses to use the Bankruptcy Code to reorganize by reducing the costs and administrative burdens associated with a typical chapter 11 case.
