Defamation and IIED Claims Are Not ‘Personal Injury Torts’
Section 157(b)(5) does not bar the bankruptcy court from trying defamation and IIED claims, Judge Thuma says, siding with Judge Bernstein.
%1
The Concept of Bifurcated Fee Agreements Approved on Appeal in South Carolina
Reversing the bankruptcy court, the district court decided that a local rule did not bar bifurcated fee arrangements altogether.
Journal Issue
Bankruptcy Code
Bankruptcy Rule
Virginia Man Pleads Guilty to Bankruptcy Fraud
The U.S. Department of Justice says a Virginia man who hid his ownership interest in a waste management company and didn’t report his employment and income from that business on a bankruptcy filing has pleaded guilty to bankruptcy fraud, the Associated Press reported. The U.S. Attorney’s Office for the Western District of Virginia says in a news release that David Bryan Stanley of Clintwood pleaded guilty. According to court documents, Stanley filed for chapter 7 after testifying he was unemployed and had no income. Prosecutors say Stanley knew he had an ownership interest in and received income from a roll-off waste container business he established in 2016. Stanley faces a maximum of five years in prison at sentencing in June.
Erika Jayne’s Husband Tom Girardi’s Wire Transfers Being Investigated Amid RHOBH Attorney’s Bankruptcy
The Real Housewives of Beverly Hills star Erika Jayne and her estranged husband Tom Girardi’s legal saga just keeps getting more intense with each passing day, Reality Blurb reported. In the latest chapter of bankruptcies, embezzlement schemes, and fraud, the trustee presiding over the Girardi-Keese firm is filing a motion for all the company’s bank records including all wire transfers. In the documents obtained by Radar, the trustee is asking the judge to turn over “all of all canceled checks in the amount of $15,000 or greater, deposits in the amount of $15,000.00 or greater, wire transfer confirmations of $15,000.00 or greater, and debit/credit memos (advices) in the amount of $15,000.00 or greater for any and all Accounts maintained by G and L Aviation at Your financial institution, for the period Dec. 1, 2013, through and including Dec. 31, 2020, including, but not limited to, the Account No. ending in 020.” What makes matters worse with this long-standing lawsuit are the victims who were defrauded and withheld their rightfully owed compensation including orphans, burn victims, and widows. The money was allegedly withheld to fund Erika and Tom’s lavish lifestyle. The firm was originally believed to owe around $101 million in liabilities. Yet after the trustee’s investigation it was uncovered Girardi’s business has $517 million in claims filed against them in court. The amount has been broken down as $363 million in unsecured claims, $17 million in priority claims, $137 million in secured claims, and another $250k in administrative claims.
ABI Applauds Introduction of “Bankruptcy Threshold Adjustment and Technical Corrections Act”
The American Bankruptcy Institute (ABI) applauds the introduction of S. 3823, the “Bankruptcy Threshold Adjustment and Technical Corrections Act,” which would permanently set the debt limit at $7.5 million for small businesses electing to file for bankruptcy under subchapter V of chapter 11. Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the bill also would raise the debt limit for individual chapter 13 filings to $2.75 million and remove the distinction between secured and unsecured debt for that calculation. “There is no doubt that the effects of the COVID-19 pandemic and its aftermath continue to put a significant strain on individuals and small businesses,” said ABI Executive Director Amy Quackenboss. “By permanently setting the debt limit for subchapter V at $7.5 million and increasing the eligibility of individuals to access relief under chapter 13, the ‘Bankruptcy Threshold Adjustment and Technical Corrections Act’ provides a greater number of struggling small businesses and families with an efficient path to reorganizing their finances.” Sen. Charles Grassley (R-Iowa) introduced the bipartisan S. 3823 on March 14, aiming to make the subchapter V debt limit permanent at $7.5 million and index it to inflation, increase the chapter 13 debt limit to $2.75 million, remove the distinction between secured and unsecured debt, make Small Business Reorganization Act technical amendments, and make Bankruptcy Administration Improvement Act technical amendments. The legislation is co-sponsored by Senate Judiciary Chair Richard Durbin (D-Ill.) and Sens. Sheldon Whitehouse (D-R.I.) and John Cornyn (R-Texas).
Ex-Husband of State Senator Sued over Bankruptcy Debt
A Tri-City executive is being sued in bankruptcy court by a creditor seeking more than $1 million for an outstanding loan balance, interest and legal fees, the Tri-Cities Area (Wash.) Journal of Business reported. The case against Fraser S. Hawley, a developer and business leader who was married to state Sen. Sharon Brown (R-Kennewick) is set to go to trial May 9. Hawley is being sued by MS Properties LLC and owner Michael Shemali, which is asking the court to determine if Hawley’s debt could be erased under the Bankruptcy Code. Hawley filed to liquidate his assets under chapter 7 in 2020, after he and Brown secured a divorce. The bankruptcy was discharged in March 2021. Shemali, along with Columbia Bank and J.P. Morgan Chase, were his top unsecured creditors. Hawley and partner Thomas Arnold borrowed $500,000 from MS Properties in 2016. Later that year, Hawley told MS Properties he needed additional money and secured an additional $250,000 loan. The suit does not identify the purpose of the loans. The plaintiff began making demands for repayment in July 2017. The outstanding balance, including interest and legal fees, stood at $1.09 million in January 2021. The suit centers on allegations Hawley concealed assets that could have repaid the debt by getting divorced and transferring assets to his wife, which he disputes in response to the original complaint. Hawley was married to Brown when the notes were signed, and the couple had significant and valuable assets. The suit claims the couple entered a “sham divorce” in which Hawley transferred assets to Brown and beyond the reach of the bankruptcy. The initial divorce decree was entered March 30, 2018.
Guilty Plea Entered in Bankruptcy Fraud Case
A man from Clintwood has pleaded guilty to committing bankruptcy fraud, CBS19 News reported. David Bryan “Pokey” Stanley was accused of concealing his ownership interest in a waste management company and did not properly report his employment and income from that business on a chapter 7 filing. Court documents show that in June 2020, Stanley filed for chapter 7 with the U.S Bankruptcy Court for the Western District of Virginia. At that time, he gave false testimony under oath that he was unemployed and had no income. However, prosecutors say that at the time of his filing for bankruptcy, Stanley knew had an ownership interest in and received income from a roll-off waste container business he had established in 2016. That business is Interstate Waste Management, LLC. Stanley faces up to five years in prison when he is sentenced in June.