Saturday, August 20, 2022
HomeExclusiveAre Federal Bankruptcy Courts Shut Down

Are Federal Bankruptcy Courts Shut Down

Ignore The Court At Your Own Peril: First Circuit Affirms Denial Of Discharge Based On Debtors Failure To Comply With Orders Of The Bankruptcy Court

Court Shutdown, Sbarro, Lehman: Bankruptcy Video

Debtors who ignore instructions from the Bankruptcy Court do so at their own peril, as a recent case from the First Circuit Court of Appeals illustrates. In In re Francis, the First Circuit reminds debtors and practitioners that the road to a bankruptcy discharge is a two-way street, and a debtor must comply with lawful orders of the bankruptcy court. Otherwise, debtors risk dismissal of their petition and denial of a discharge.

Cryptic Crypto: Creditors Move For Ch 7 For Alleged Madoff

On Wednesday, November 18, two customers of Cred Inc., a cryptocurrency investment platform currently in Chapter 11, asked Delaware Bankruptcy Judge John T. Dorsey to convert the Chapter 11 case to a Chapter 7 liquidation . Prior to its Chapter 11 filing, Cred received investor-cryptocurrency, typically in the form of loans, and then purportedly used those funds across a variety of investments to generate favorable returns.

Courts Like Employers Call Audibles On Vaccines

State and federal courts shut down all in-person operations in March 2020 based on the COVID-19 health emergency. Since then, many have struggled to reschedule the significant backlog of jury trials. While most courts adopted virtual platforms for motions proceedings, conferences and nonjury hearings, few courts impaneled juries because of the health risks of exposing court personnel, parties and large groups of potential jurors, as well as their families, to infection. With the rapid rise and spread of the delta variant, and the alarming increase in COVID-19 cases and hospitalizations, courts are having to adapt again to try and keep jury trials on track.

One California federal court recently dealt with a COVID-19 infection during the trial and had to dismiss the jury for a day upon learning that a witness expected to testify that day tested positive. While counsel who were conducting the trial were not exposed to that person, the court was able to resume the schedule after taking adequate precautions.

Courts will grapple with these issues as they try to keep case schedules on track while balancing protection for the public during this latest COVID-19 surge. Civil and criminal litigants have already had their rights affected by delays in numerous substantive proceedings and the courts will continue to examine strategies to keep the wheels of justice turning safely.

Recommended Reading: How Many Times Did Trump File Bankruptcy

Foreign Trusts Present Tricky Eligibility Issues

In bankruptcy as in federal jurisprudence generally, to characterize something with the near-epithet of federal common law virtually dooms it to rejection. But, since common law is he body of law derived from judicial decisions, rather than from statutes, is judicial interpretation of the Bankruptcy Code ever federal common law? Does it cross over to that dangerous territory if Congress left few clues as to what it intended in the provision undergoing interpretation?

Impact Of Possible Federal Government Shutdown On Bankruptcy Courts

What If I Cant Pay My Support Obligation During the ...

On Behalf of Peter Scribner, Esq. | Apr 6, 2011 | News from the Western District of New York Bankruptcy Court

With a possible federal government shutdown deadline of Friday at midnight, bankruptcy practitioners are unsure of the possible effect on the operation of the bankruptcy system. The Bankruptcy Judge in Rochester, his staff, and the Court Clerks office are, of course all federal employees, as is the staff of the United States Trustees office.

Bankruptcy trustees are not federal employees, but trustee hearings are held at the U.S. Trustee office in the Federal Building in Rochester, which might not be open to the public if there is a shutdown. PACER, the online filing system for filing bankruptcy petitions, motions and other papers, does not operate in the local federal building and does not require a court clerk to receive the paperwork. But if the system operators of PACER are furloughed by a shutdown, that system will stop operating.

Paul Warren, Chief Clerk to the Bankruptcy Court for the Western District of New York, reported to the Monroe County Bankruptcy Committee on March 30 that the bankruptcy court, along with the rest of the federal judiciary, could be significantly affected in the event of a budget impasse in Washington and a government shut down.

You May Like: Can You Get A Personal Loan After Bankruptcy

United States Bankruptcy Court

In re: Cinemex USA Real Estate Holdings, Inc, et al.

In a Chapter 11 bankruptcy filing before the U.S. Bankruptcy Court in the Southern District of Florida, CB Theater, an operator of upscale dine-in movie theaters, sought to delay or excuse the payment of rent due to government-mandated theater shutdowns during the COVID-19 pandemic. CB Theater argued that both frustration of purpose and impossibility doctrines should excuse or delay their obligation to pay rent under the lease.

In re CEC Entertainment Inc.

Update: Seventh Circuit Revives Fulton Circuit Split

In January, we reported that the Supreme Court had resolved a split among the Circuit Courts of Appeals regarding property seized from a debtor pre-petition, holding that merely retaining possession of estate property does not violate the automatic stay. The underlying dispute in Fulton arose when individual debtors demanded that the City of Chicago return cars that were impounded for non-payment of various municipal parking and traffic violations immediately upon the filing of their bankruptcy petition, while the City maintained that debtors must seek turnover through an adversary proceeding.

Read Also: Fizzics Beer Net Worth

Can You Appeal A Bankruptcy Court Decision

If an individual or creditor disagrees with the bankruptcy judges decision and wishes to contest the judges ruling, the filer has the option of filing an appeal and beginning the appeal process.

The appeal is generally made by individuals or businesses that have standing in the decision or are directly affected by it. A bankruptcy court decision incorporates multiple claims made by creditors, who can claim “financial injury,” and are directly affected by it.

The appeal, for example, may be the result of a creditor’s claim not being honored or being disputed by the bankrupt business or individual.

The appeal must be filed within ten days of the bankruptcy court’s decision. An appeal court generally handles bankruptcy appeals. In fact, there are many judicial circuits that have their own bankruptcy-specific appellate courts to handle such disputes.

A Cogent Opposing View On Sbra Flexibility

Florida sports betting shut down after federal judges ruling

I dont know if Congress foresaw, when it enacted new Subchapter V of Chapter 11 of the Code in the Small Business Reorganization Act of 2019 , that debtors in pending cases would seek to convert or redesignate their cases as Subchapter V cases when SBRA became effective on February 19, 2020, but it was foreseeable. The benefits and advantages of Subchapter V to the debtors entitled to use it were certain to attract not just new filings but pending cases, especially cases commenced during SBRAs long 180-day runway to effectiveness.

Read Also: How To Buy A New Car After Bankruptcy

Equitable Mootness On The Ropes

Earlier this month citing the virtually unflagging obligation of an Article III appellate court to exercise its subject matter jurisdiction the Eighth Circuit Court of Appeals decried the pervasive overreliance by district courts on the doctrine equitable mootness to duck appeals of confirmation orders.

Diminishing Returns: A Pre

Does a debtors pre-petition change of the beneficiary of a life insurance policy constitute a transfer of an interest of the debtor in property? Not according to the U.S. Bankruptcy Court for the Eastern District of North Carolina, which held earlier this week that such transfers do not diminish the estate.

Also Check: Dave Ramsey How Much To Spend On Engagement Ring

Courts Shut Down As Coronavirus Spreads

As the coronavirus spreads across the United States, many courts are shutting down placing court proceedings on hold until further notice.

Its unclear how long these closures will last for, but criminal and civil actions making their way through court will likely be delayed or scheduled court dates will be rescheduled. Top Class Actions readers can consult the sidebar on this article for more information about specific court closures.

Coronavirus refers to a large family of viruses which cause respiratory illnesses in people. Previous outbreaks such as MERS and SARS were both part of the coronavirus family.

The novel coronavirus, or COVID-19, was first detected in Wuhan, China in late 2019. Since then, the virus has quickly spread around the world including the United States.

How has the coronavirus impacted you? Get legal help by clicking here.

For the most part, symptoms of the coronavirus mirror those associated with the flu including fever, cough, shortness of breath, and more.

However, older adults and people with certain health conditions may be at risk of developing serious, life-threatening complications, such as sepsis and acute respiratory distress syndrome.

The fast spread and concerning death rate of COVID-19 prompted the International Health Regulations Emergency Committee of the World Health Organization to declare the outbreak a public health emergency of international concern, in late January.

Bankruptcy Court: Force Majeure Clause Partially Excuses Illinois Restaurant’s Rent Obligations During Covid Shutdown

Federal courts and shutdown: The sequester had already ...

On June 3, 2020, the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, issued a decision regarding the application of a force majeure provision in a restaurant lease with respect to the COVID shutdown. The debtor-tenant — an Illinois restaurant — claimed that its duty to pay rent was excused by the leases force majeure clause, which states as follows:

“Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations are prevented or delayed, retarded or hindered by…laws, governmental action or inaction, orders of government…Lack of money shall not be grounds for Force Majeure.”

The tenant argued that the force majeure provision was triggered by Illinois Governor Pritzker’s March 16th Executive Order, which suspended the business operations of Illinois restaurants, other than carry-out and delivery services.

The court agreed, stating that under Illinois law, the force majeure provision partially excused the tenant from paying rent during the shutdown, even though the provision specifies that “lack of money” is not a basis for force majeure. On the latter point, the court indicated that the “lack of money” carve-out was inapplicable, because the tenant’s inability to pay rent was due to a governmental action.

Larry Byrne 161 North Clark Street, Suite 2700Chicago, Illinois 60601

Don’t Miss: Do It Yourself Bankruptcy Chapter 7 Software

The Lse Alumni Turning Their University Into A Startup Powerhouse

Like everywhere else, courts around the country shut down as the pandemic reached our shores. This disrupted all types of cases, including bankruptcies, and judges immediately got to work figuring out how to keep their dockets moving with video and teleconferencing, better electronic filing capabilities and more.

Bankruptcy courts are a bit of an unusual beast, though. I won’t go into all the constitutional details, but there’s one bankruptcy court per federal district . Every court in each district, including each bankruptcy court, can make some of its own administrative decisions, but it also has to follow certain rules set by the federal circuit court presiding over the district. And each federal circuit covers more than one state.

And as you’re no doubt aware, each state is free to determine its own plan for stay-at-home orders and reopening businesses and public places. Some counties and cities are even making their own decisions in these regards.

So, for example, the bankruptcy court in Manhattan, which is in the Southern District of New York, has to make some of its own decisions regarding how to conduct business, but it is also subject to any rules or guidelines set by the judges of the Second Circuit which presides over courts in New York, Connecticut and Vermont and it also needs to take into account state and city restrictions regarding the pandemic.

Your Case Isn’t On Indefinite Hold

And one way or another, the bankruptcy courts are open for business.

Another Bankruptcy Court Weighs In On Postpetition Interest

Cuker Interactive, LLC filed a Chapter 11 bankruptcy petition on December 13, 2018, in the United States Bankruptcy Court for the Southern District of California. Because it was solvent at confirmation, the debtor proposed to pay secured creditors in full, with interest at the contract rate, and general unsecured creditors in full, with postpetition interest at the legal rate, or a rate determined by the Court that leaves the creditors unimpaired. But what rate is that?

Read Also: How Many Times Did Donald Trump File For Bankruptcy

Blurred Immunity: California Cannot Escape Adversary Proceeding On Grounds Of Sovereign Immunity

In 2018, the liquidating trustee for Venoco, LLC and its affiliated debtors commenced an action in the United States Bankruptcy Court for the District of Delaware seeking monetary damages from the State of California and its Lands Commission as compensation for the alleged taking of a refinery that belonged to the Debtors . The State moved to dismiss, claiming, among other things, sovereign immunity. The Bankruptcy Court denied the motion to dismiss, and the District Court affirmed the denial. The State appealed to the Third Circuit, and the Third Circuit affirmed.

Procedures In Bankruptcy Court

Federal Judge SHUTS DOWN Trump

Bankruptcy itself can occur when a person or business cannot repay their debts. Once the debtor files the petition, the following proceedings are decided by the bankruptcy courts: The court measures and evaluates the debtor’s situation, and then returns a process and plan for how the debtors assets may be used to repay a portion of outstanding debt.

The decision is overseen by a bankruptcy judge, and that judge is able to decide whether or not the debtor should be discharged of their debts. This means that the debtor will no longer be responsible or personally liable for the debts associated with the filing. Some debts, however, are ineligible for discharge, including tax claims, child support, alimony payments, and personal injury debts.

An individual also cannot be discharged from any debt on any secured property, and any creditor can still enforce a lien on a debtors property.

Bankruptcy courts make extensive use of video- and audio-conferencing facilities because it is impossible to assemble creditors from different parts of the country into a single room at the same time.

Also Check: How To File Bankruptcy In Ky

Other Courts And Administrative Agencies

The Antitrust Division and the Federal Trade Commission issued a joint statement detailing an expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and public safety of Americans during the COVID-19 pandemic.

Per the Divisions update on March 24, 2021, in terms of internal procedural changes for public health and safety, the Division now permits the electronic filing of Hart-Scott-Rodino submissions and conducts all meetings by phone or video conference, absent extenuating circumstances.

On June 1, The U.S. Department of Labor , Chief Administrative Law Judge issued an Administrative Order and Notice, 2020-MIS-00008, extending indefinitely the moratorium on in-person hearings scheduled to expire on July 24, 2020.

The Importance Of Loan Underwriting When Restrictions On Bankruptcy Cannot Singlehandedly Save The Day: Sutton 58 Associates Llc V Phillip Pivelsky Et Al

In sophisticated real estate financing transactions, most prudent lenders attempt to deter borrowers from filing for bankruptcy before loans are paid in full by providing in loan documents that such a filing constitutes an event of default. Many lenders will insist that their borrowers remain bankruptcy remote in the form of a so-called single asset real estate entity during the term of the loan.

Recommended Reading: How To Declare Bankruptcy In Va

Inside The Nras Strategy To Escape Disaster

Exclusive: Top NRA lawyer opens up about using bankruptcy to fight legal battles

The National Rifle Association’s bankruptcy in Texas may throw a wrench into New York attorney general Letitia James’s push to shut down the group and seize its assets.

William Brewer, the NRA’s leading outside counsel, said a federal bankruptcy judge will have the final say over what happens to the Second Amendment group’s assets. James is pursuing a case in state court to dissolve the NRA and reallocate its assets to other nonprofits over accusations of financial impropriety. James will now have to take an extra step in federal court to achieve her goal, according to Brewer.

“In order to dissolve the association, the NRA believes that James would have to seek that relief from the bankruptcy court,” Brewer told the Washington Free Beacon.

James successfully blocked a recent attempt by the NRA to move the case from a Manhattan court to one in Albany. James’s office declined to comment on the looming bankruptcy. It directed the Free Beacon to a statement in which the attorney general said, “The NRA does not get to dictate if and where they will answer for their actions.”

Experts said bankruptcy protections may complicate the issue for James, but successfully blocking her in the long term could prove difficult.

“It’s an aggressive move,” Scheinberg said. “It may or may not work. If anything, I think they will get a more balanced playing field here in Texas.”

Considering The Conduct Of Two Ppp Fraudsters Bankruptcy Court Shows Its Teeth But Declines To Bite

How the government shutdown affects federal and bankruptcy ...

Messrs. Woods and Wu are fraudsters, Judge Christopher S. Sontchi declared in the opening salvo of his scathing opinion. According to the former Chief Judge of the U.S. Bankruptcy Court for the District of Delaware, Woods and Wu fraudulently obtained a Paycheck Protection Program loan on behalf of Urban Commons Queensway, LLC, which indirectly operates the Queen Mary, a cruise ship turned hotel docked near Long Beach, CA. Woods and Wu then absconded with the proceeds, leaving either the Debtor or the United States to pay back the lender.

Also Check: Is Taco Bell Filing For Bankruptcy

RELATED ARTICLES

Popular Articles