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Senators Introduce Bipartisan Legislation to Fix Means Test Disparity for Disabled Veterans

Submitted by jhartgen@abi.org on

U.S. Senators Tammy Baldwin (D-Wis.) and John Cornyn (R-Texas) today introduced the bipartisan Honoring American Veterans in Extreme Need (HAVEN) Act (S. 679) to protect the economic security and well-being of veterans and their families who rely on disability benefits and may be experiencing financial hardship, according to a press release. Under current bankruptcy law, disability benefits paid by the Department of Veterans Affairs (VA) and Department of Defense (DoD) are included in the calculation of a debtor’s disposable income, increasing the portion of the debtor’s income that is subject to the reach of creditors. By contrast, bankruptcy law explicitly exempts Social Security disability benefits from this calculation. To remove this unequal treatment among various disability benefits, the HAVEN Act would exclude VA and DoD disability payments made to veterans or their dependent survivors from the monthly income calculation used for bankruptcy means tests. “Forcing our veterans and their families to dip into their disability-related benefits to pay off bankruptcy creditors dishonors their service and sacrifice. These benefits are earned, and we must do right by our veterans and protect their economic security, especially during challenging times,” said Baldwin. Cornyn added that “disabled veterans fought for their country at great cost, and they shouldn’t need to fight to protect their disability benefits from creditors during bankruptcy.” Holly Petraeus, member of ABI's Veterans' Task Force and former Assistant Director of the Consumer Financial Protection Bureau, Office of Servicemember Affairs, said that she was surprised to learn that a flaw in the Bankruptcy Code was denying disabled veterans the protections that it offered to all other Americans receiving disability income. "The HAVEN Act fixes that flaw, and I’m happy to join its many bipartisan co-sponsors as an individual sponsor of the bill,” Petraeus said. For more information on the HAVEN Act, please click here

To read the full bill text, please click here

For more on this issue, be sure to read this November ABI Journal article or listen to this special ABI podcast.

Failure to Depose Rick Ross Could Cost Reed Smith in 50 Cent Malpractice Case

Submitted by jhartgen@abi.org on

Reed Smith’s lawyers should have deposed rap star Rick Ross to possibly escape a malpractice claim brought by rap star and former client 50 Cent, according to a ruling from a Connecticut bankruptcy judge last week, the American Lawyer reported. Reed Smith remains entangled in a case stemming from a long-simmering feud between the two famous rappers. But under last week’s ruling, the window for 50 Cent to succeed in his malpractice claim against the firm was significantly narrowed. The dispute dates back to 2009, when 50 Cent, whose real name is Curtis Jackson III, leaked a sex tape of a woman who has a child with Rick Ross, real name William A. Robert II, during a public feud between the two. 50 Cent’s actions ultimately cost him $7 million, which a 2015 New York state court jury awarded the woman in the tape. That verdict led to a bankruptcy filing for Jackson. Reed Smith had represented 50 Cent in that sex-tape case in New York until the eve of the 2015 trial, when the rapper dismissed the firm from the case citing “lack of effective representation and inadequate pre-trial preparation.” After filing for bankruptcy, the “Just a Lil Bit” singer sued Reed Smith in 2017, asking for $32 million in total damages. Among his claims were that Rick Ross had posted the sex tape online before 50 Cent did and that Reed Smith had failed to depose the rival rapper as a way to enter that evidence into his defense. That fact could have mitigated the damages 50 Cent paid in the New York case, said U.S. Bankruptcy Judge Ann Nevins in Connecticut, ruling on Reed Smith’s motion to dismiss. Nevins, in her opinion last week, said 50 Cent has a long road in front of him to win a malpractice claim against Reed Smith. For one thing, Nevins said Ross’ testimony that he first uploaded the video would not have had an effect on 50 Cent’s liability under New York law.