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Dischargeability of student loans is a “hot button” issue in both the bankruptcy world and mainstream media. In fact, last September another colleague wrote about the history of student loan dischargeability, and the current obstacles borrowers face.[1] Since that article, the U.S.
Companies in crisis are facing major challenges. Not only do they have to negotiate with stakeholders about their restructuring contributions and restructuring loans, they also have to make what are often difficult decisions on a wide range of legal issues. Essential components of any restructuring concept are the restructuring contributions of stakeholders, which often consist of waivers of claims by existing creditors.
One thing that Toys “R” Us, Sears and Forever 21 have in common is that all three cases are administratively insolvent.[1] Vendors who extended credit to the debtor after the petition date, in reliance on the debtor’s assurances that it had adequate “DIP” financing to justify new credit terms, got stuck a second time when there were inadequate funds to pay the administrative claims of vendors that had supplied the debtor post-petition.
At the Annual Spring Meeting in April, the committee hosted a panel that discussed the ins and outs of choosing a venue in which to file, including circuit splits on pertinent areas of law, variations in local rules, and the amorphous “comfort” level that some practitioners have with some jurisdictions over others.
Imagine this scenario: A judgment is won, the defendant filed for bankruptcy, but the judgment creditor missed the deadline to file a complaint objecting to the discharge of the debt. Normally, this means that the judgment will be discharged unless the court is convinced to accept a late-filed complaint. This is a high hurdle typically requiring the creditor to raise a constitutional issue of fraud by the debtor.
