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Reminder: New Disclosure Obligations for Lenders Go Into Effect in California on December 9, 2022

On June 9, 2022, California approved new commercial financing disclosure regulations proposed by the California Department of Financial Protection and Innovation (DFPI). Those regulations go into effect on December 9, 2022. The commercial financing disclosure regulations extend consumer style disclosure protections to California small businesses seeking commercial financing. The result is that providers of certain […]

Calif. App. Court (1st Dist) Holds Late Fee Was ‘Unlawful Penalty’ Under Calif. Law, Vacates Arbitration Award in Lender’s Favor

October 31 2022 The California Court of Appeal for the First Appellate District recently reversed a trial court’s decision to affirm an arbitration award that upheld the validity of a late payment fee assessed to borrowers in the event of a borrower’s default. In so ruling, the Court held that: (1) Arbitration awards regarding liquidated […]

California Business Divorce: Reverse Veil Piercing: Permitting a Court to Hold a Company Liable for the Debt of an Individual Owner

You have likely heard the term “piercing the veil.” This legal doctrine permits a court to ignore corporate formalities and hold an individual owner liable for a company’s debt. But you may be less familiar with the doctrine of reverse veil piercing, which permits a court to hold a company liable for the debt of an […]

Eleventh Circuit En Banc Panel Reverses Controversial Hunstein Decision

In a much anticipated decision released September 8, an en banc panel of the Eleventh Circuit Court of Appeals reversed the district court’s decision that a debt collector’s outsourcing of its letter process to a third-party mail vendor violated the Fair Debt Collection Practices Act’s (FDCPA) prohibition on third-party disclosure and ruled that plaintiff Hunstein […]

Recent Changes to Chapter 11 and Chapter 13 Bankruptcy

On June 21, 2022, President Joseph Biden signed S.3823 into law. The law, which is effective immediately, makes the following material changes to the Bankruptcy Code. The $7.5 million debt limit for eligibility for Chapter 11, Subchapter V bankruptcy cases is renewed for another two years: In 2019, Congress passed the Small Business Reorganization Act […]

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Insolvency Law Committee

UPDATE: At midnight on March 27, 2022, certain provisions of the CARES Act expired. Importantly for insolvency practitioners, the subchapter V debt limit of $7,500,000 reverted to the lower original amount of $2,725,625. It appears that Congress is working to reinstate the higher debt limit and at least one bill has been proposed (S. 3823) […]

Bankruptcy Venue “Reform” – What Are The Odds This Time?

USA October 5 2021 Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now? Venue for bankruptcy cases is governed by 28 U.S.C § 1408, which provides that corporations may file in the district (a) […]