So Maybe We Now Know When A Claim Arises, But Can A Debtor Discharge The Claim? Although not admitting that it succumb to acknowledged “universal disapproval” of its 1984 decision in Avellino & Bienes v. M. Frenville Co. (Matter of M. Frenville Co) 744 F3d 332 (3rd Cir. 1984), the Third Circuit Court of Appeals [...]

On March 23, 2010, the U.S. Supreme Court issued a 9 – 0 opinion in United Student Aid Funds, v. Espinosa  (08-1134) in which the Court affirmed the 9th Circuit’s holding that a chapter 13 debtor can obtain a discharge of a student loan by including it in a chapter 13 plan, if the creditor fails [...]

Federal Reserve Chairman Ben S. Bernanke is testifying today to a joint hearing of the House Oversight and Government Reform Committee, and House Domestic Policy Subcommittee. The purpose of the joint hearing is to examine events surrounding Bank of America’s $50 million acquisition troubled investment house Merrill Lynch in September 2009 and its receipt of [...]

We previously dissussed what preferences are and some common defenses.  Many small businesses may be wondering if there is any way to get your money, but avoid claims of preferential payment.   Unfortunately, there is no absolute, “slam dunk” way to avoid a bankruptcy preference claim risk. 

Yesterday we discussed preferential payments – payments made to an insolvent company within 90 days of the bankruptcy filing.  To more equitable or fairly divide the limited assets among the creditors, these payments must be returned to the debtor.  Your first question upon receiving a preference demand letter is likely to be:  Do I have to [...]

Word on the street is that Tarheel Dominion Company, a pretty large customer of yours, is in a cash crunch.  You are, however, relieved when you receive timely payment of $100,000 for services you rendered to Tarheel Dominion, and the check clears. Two months later, you hear that Tarheel Dominion has filed for Chapter 11 bankruptcy [...]