Circuits More Deeply Split on Waiver of Sovereign Immunity for Native American Tribes
Over a vigorous dissent, the First Circuit Joins the Ninth Circuit by holding that Section 106(a) waives tribes’ sovereign immunity.
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Total April Bankruptcy Filings Decrease 21 Percent Over the Same Period Last Year, Commercial Filings Fall 16 Percent
Total U.S. bankruptcy filings in April 2022 decreased 21 percent from the previous year, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. Bankruptcy filings totaled 32,508 in April 2022, down from the April 2021 total of 40,931. Noncommercial bankruptcy filings totaled 30,747 in April 2022, also registering a 21 percent decrease from the April 2021 noncommercial total of 38,826. Commercial filings decreased 16 percent in April 2022, as the 1,761 filings were down from the 2,105 commercial filings registered in April 2021. There were 249 commercial chapter 11 filings registered in April 2022, a decline of 15 percent from the 290 filings in April 2021. Small business filings, captured as subchapter V elections within chapter 11, decreased 26 percent to 83 in April 2022 from 112 in April 2021.
Total April Bankruptcy Filings Decrease 21 Percent Over the Same Period Last Year, Commercial Filings Fall 16 Percent
Alexandria, Va.— Total U.S. bankruptcy filings in April 2022 decreased 21 percent from the previous year, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. Bankruptcy filings totaled 32,508 in April 2022, down from the April 2021 total of 40,931. Noncommercial bankruptcy filings totaled 30,747 in April 2022, also registering a 21 percent decrease from the April 2021 noncommercial total of 38,826. Commercial filings decreased 16 percent in April 2022, as the 1,761 filings were down from the 2,105 commercial filings registered in April 2021. There were 249 commercial chapter 11 filings registered in April 2022, a decline of 15 percent from the 290 filings in April 2021. Small business filings, captured as subchapter V elections within chapter 11, decreased 26 percent to 83 in April 2022 from 112 in April 2021.
“New bankruptcy filing volumes continue to decline as the country emerges from the global pandemic,” says Chris Kruse, senior vice president of Epiq Bankruptcy Technology. “The seasonality we see in March each year also occurred in 2022, and the April decline was expected.”
April’s total bankruptcy filings represented a 10 percent decrease when compared to the 36,059 total filings recorded the previous month. Total noncommercial filings for April also represented a 10 percent decrease from the March 2022 noncommercial filing total of 34,234. The commercial filing total represented a 4 percent decrease from the March 2022 commercial filing total of 1,825. Commercial chapter 11 filings decreased 15 percent from the 292 filings in March 2022. Subchapter V elections within chapter 11 declined 40 percent from the 138 filed in March 2022.
“Legislation that passed recently in the Senate and is currently being considered in the House would expand the debt-eligibility limits for small businesses and individuals looking to reorganize their finances,” said ABI Executive Director Amy Quackenboss. “ABI appreciates the work by Congress to create greater access and a more efficient process for small businesses and families to achieve a financial fresh start.”
The decline of subchapter V elections reflects the return of the debt-eligibility limit to the original $2,725,625 threshold from the expanded amount of $7.5 million first established under the CARES Act of 2020. Legislation was passed in the Senate to restore the eligibility limit back to $7.5 million and cover any subchapter V cases that were pending at the time of the March 27 sunset. Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the substitute also continues to push for the debt limit for individual chapter 13 filings to be increased to $2.75 million and remove the distinction between secured and unsecured debt for that calculation. Both of the expanded eligibility limits for small business subchapter Vs and consumer chapter 13s would sunset after two years.
ABI has partnered with Epiq Bankruptcy to provide the most current bankruptcy filing data for analysts, researchers, and members of the news media. Epiq Bankruptcy is the leading provider of data, technology, and services for companies operating in the business of bankruptcy. Its new Bankruptcy Analytics subscription service provides on-demand access to the industry’s most dynamic bankruptcy data, updated daily. Learn more at https://bankruptcy.epiqglobal.com/analytics.
For further information about the statistics or additional requests, please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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Epiq Bankruptcy is a division of Epiq, a global technology-enabled services leader to the legal services industry and corporations that takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Cert Granted to Decide: Is a Principal’s Liability for an Agent’s Fraud Nondischargeable?
The circuits are split on whether an innocent debtor’s liability is automatically nondischargeable when an agent or partner committed fraud.
Supreme Court Weighs Bankruptcy Discharges for Fraud by a Third Party
The Supreme Court will hear a dispute stemming from a San Francisco house-flipping project gone wrong that is expected to determine whether an innocent bankruptcy debtor can wipe out judgments for a fraud carried out by someone else, WSJ Pro Bankruptcy reported. The justices elected Monday to hear the case of a married couple who sold a house in 2008 for $2 million without disclosing water leaks and other problems to the buyer. The couple later filed for personal bankruptcy, which the wife has sought to use to discharge the buyer’s judgment against her, saying her husband was primarily responsible for the renovation and that she wasn’t aware of the problems at the time of the sale. The case concerns who is eligible for a fresh financial start through bankruptcy and who isn’t. Although consumers can use bankruptcy to leave overwhelming credit card or medical bills behind, Congress doesn’t let debtors use the process to get out of paying creditors whom they have defrauded. The question the Supreme Court chose to review focuses on whether a debtor can discharge a debt arising from a partner’s fraudulent act that they are jointly liable for. Lawyers for the woman, Kate Bartenwerfer, said in a December court filing the issue is broader than her case and potentially affects joint transactions or partnerships “involving married persons and couples, even the sale of a family home.” The Ninth U.S. Circuit Court of Appeals ruled against Ms. Bartenwerfer following earlier trials in California state court and bankruptcy court. The appeals court ruled last August that Ms. Bartenwerfer’s debt isn’t eligible for a bankruptcy discharge “regardless of her knowledge of the fraud.”
Tennis Ace Boris Becker Jailed for Two and a Half Years for Hiding Assets from Bankruptcy
Grand Slam champion Boris Becker has been jailed for two and a half years after hiding assets and debts worth more than £2.5 million after being declared bankrupt, the Evening Standard reported. The three-time Wimbledon winner deliberately transferred money to family and associates when he ran aground financially in June 2017, successfully keeping £390,000 (€426,930) and the proceeds of a bank loan worth £1.1 million from his creditors. Becker, the former World Number One, also failed to declare his ownership of a £1 million German property and £75,000 in shares he held in a tech firm. The tennis great was made bankrupt after his £38 million sporting fortune was swallowed up by an expensive divorce, child maintenance, and the cost of continuing his luxury lifestyle.
Liens on Impounded Cars Are Judicial Liens that May Be Avoided, Seventh Circuit Says
The City of Chicago argued unsuccessfully that liens on cars are statutory because they arise automatically when the car is impounded.