But I Didn’t DO Anything! — Can Non-action Violate the Automatic Stay? It is commonly understood that, upon commencement of a bankruptcy case, section 362 of the Bankruptcy Code operates as an automatic statutory injunction against a wide variety of creditor actions and activities. The automatic stay enjoins (1) “commencement or continuation” of certain proceedings, (2) “enforcement” of a judgment, (3) “any act” to obtain possession of or exercise control … Continue Reading
The Road Ahead for 2017 – Restructuring & Insolvency in US Slide Rules and Hula Hoops – Business Obsolescence and Bankruptcy One of the functions that bankruptcy proceedings can serve is to encourage entrepreneurship by allowing people to pursue bold innovations while still allowing them to recover if their new ideas don’t prove successful. Another equally important function is to provide a structure for restructuring or liquidation … Continue Reading
Equitable Mootness — Are Bankruptcy Courts Still to be “Courts of Equity?” The concept of “equitable mootness” is a doctrine of relatively long-standing in bankruptcy jurisprudence. It has been used by courts to avoid determination of issues raised on appeal that would require the unscrambling of a plan previously confirmed and implemented. However, that doctrine has recently been questioned in a variety of decisions. It appears that … Continue Reading
“Reasonably Equivalent Value” – – A Path Without Guideposts. “Reasonably equivalent value” – – part of the standard for evaluation of potential constructive fraudulent transfers – – is both subjective and imprecise. The words “equivalent value” require the court to make a subjective judgment whether consideration received in exchange for a transfer is worth the same as the consideration transferred by the debtor. And … Continue Reading
“But Sometimes You Get What You Need” — Another Decision on Annuity Exemptions Last week, our post “You Can’t Always Get What You Want” discussed a Texas bankruptcy court decision rejecting efforts by debtor Sam Wyly to claim as exempt a number of offshore private annuities. In denying the exemptions, the bankruptcy judge rejected the debtor’s arguments that the principle of liberal application of exemptions and the policy of … Continue Reading
“You Can’t Always Get What You Want” – – Denial of Claimed Exemptions for Offshore Annuities The bankruptcy courts have a long history of being willing to use their judicial power under the Bankruptcy Code to prevent perceived efforts by debtors to inappropriately shield their assets from creditors. This is true even when the debtors employ structures and devices that are complex and crafted in seeming compliance with applicable law. A … Continue Reading