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U.S. Supreme Court justices yesterday seemed skeptical of whether bankruptcy can be used to wipe out debts incurred through fraud even in cases in which an individual declaring bankruptcy was not the one who committed the fraud, Reuters reported. California resident Kate Bartenwerfer asked the high court to overturn a ruling from the Ninth
U.S. Circuit Court of Appeals that said she could not use bankruptcy to escape liability stemming from fraudulent omissions her husband made in selling a house regardless of whether she knew about it. Bartenwerfer's attorney Sarah Harris told the justices at oral arguments that the entire point of bankruptcy law is to give honest debtors like Bartenwerfer the ability to clear debts and have a "fresh start." If Bartenwerfer is unable to discharge liability for her husband's misstatements, then other innocent debtors could also face a lifetime of debt due to others' fraudulent conduct, Harris said. "That financial death sentence would fall mostly on unsophisticated spouses," Harris said. "Dishonest debtors cannot escape their creditors, but the court does not consign unwitting debtors to the same fate." The attorney for Kieran Buckley, who sued the Bartenwerfers for selling him a house while withholding information about major defects, said that his client should not be left without recourse due to Bartenwerfer's bankruptcy.

Commercial chapter 11 filings increased 74 percent to 345 in November 2022 from the 198 filings recorded in November 2021, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. The November 2022 commercial chapter 11 filing total was lifted by the more than 100 cases related to the chapter 11 filing on November 11 by crypto exchange FTX Trading, Ltd. Total commercial filings increased 17 percent to 1,848 in November over 1,586 total filings in November 2021. Subchapter V small business filings increased 38 percent to 117 in November 2022 from 85 filings in November 2021. Total U.S. bankruptcy filings in November 2022 were 31,178, up six percent from 29,335 total filings in November 2021. Overall individual filings also increased six percent in November 2022, as 29,330 filings were up over 27,749 individual filings recorded in November 2021. While still below pre-pandemic levels, individual chapter 13 filings continued to increase in November, as 12,862 filings were up 25 percent over the November 2021 total of 10,327.

Alex Jones filed for bankruptcy on Friday, less than two months after a jury ordered him and the parent company of his Infowars website to pay nearly $1 billion in compensatory damages to relatives of victims of the 2012 Sandy Hook mass shooting, Reuters reported. Jones filed for chapter 11 protection from creditors with the U.S. bankruptcy court in Houston, a court filing showed. The filing said Jones has between $1 million and $10 million of assets and between $1 billion and $10 billion of liabilities. n October, a Connecticut jury in a case brought by relatives of more than a dozen Sandy Hook victims ordered Jones and Free Speech Systems, the parent company of Infowars, to pay nearly $1 billion in damages. Free Speech Systems filed for bankruptcy in July. In a separate case in Texas, a jury in August decided Jones must pay the parents of a 6-year-old boy killed in the Sandy Hook massacre $45.2 million in punitive damages, on top of $4.1 million in compensatory damages.