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 […]
On August 29, 2022, in the PG&E bankruptcy matter, the Court of Appeals for the Ninth Circuit became the first circuit-level court to address the question of what is the correct rate of interest to be applied to unimpaired unsecured claims against a fully solvent debtor.[2] In its decision, the Ninth Circuit reversed the bankruptcy court’s and district […]
The U.S. Court of Appeals for the Eighth Circuit recently affirmed the judgment of a trial court and held that non-consumers cannot bring a claim under Section 1692c(b) of the federal Fair Debt Collection Practices Act (FDCPA). The Eighth Circuit also concluded that there was no abuse of discretion in the trial court because the […]
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 […]
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 […]