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 […]
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) […]
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) […]
USA September 24 2021 One valuable tool in formulating a successful exit from chapter 11 via a confirmed plan is the use of third-party releases. Such releases can take many forms, but the basic idea is that a non-debtor third party contributes property, usually cash, to the debtor or a trust created under the plan, with […]
USA June 25 2021 The Vault Or to put it in legalese—“no concrete harm, no standing.” It does not get more simple than that. On June 25, 2021, the U.S. Supreme Court decided Trans Union v. Ramirez (“Ramirez”), a case involving whether class members who suffer no actual injury can be included in a damages class under Federal […]
May 26, 2021 The following is a case update written by Leonard Gumport analyzing a recent case of interest. SUMMARY In Graylee v. Castro, 52 Cal. App. 5th 1107 (2020) (“Graylee”), the California Court of Appeal ruled that California Code of Civil Procedure section 664.6, which allows a court to enter a judgment under the […]
DLA Piper USA May 24 2021 The COVID-19 pandemic created unprecedented disruptions across the global economy, perhaps most severely in the retail sector. Shelter-in-place orders, government-mandated closures and other restrictions drastically reduced or entirely wiped out revenue streams, resulting in an increased number of bankruptcy filings by retail debtors. While bankruptcy generally provides a breathing spell […]
USA May 7 2021 We knew this day would come, since email is now the primary means of written communication. A material supplier made a payment bond claim solely via email. No letter was sent by mail, much less sent by certified mail as required under the Maryland Little Miller Act for payment bond claims. And yet, a […]