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Wayne Greenwald, P.C.

Bankruptcy

Diligence and Discharge
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: March 2, 2017

Bankruptcy relief is not a sign of failure. It expresses hope. There is life after bankruptcy. Potentially, a better life. Bankruptcy discharges are “fresh starts” for individuals to build futures, where their pasts are not repairable. But, a debtor’s past can prevent a bright, post-bankruptcy future. Dischargeability and Discharge Bankruptcy Code §§ 523 and 727 provide means for limiting or eliminating that fresh start. Section 523 identifies specific debts which can be excluded from discharge. These debts are generally from significant breaches of duty (e.g., not paying taxes or spousal…Read More

Chapter 7s for Entities?
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: February 9, 2017

Imagine thinking you’ve put a bad business experience behind you, only to learn its ghost is attacking you. That’s the specter of poorly planned entity chapter 7 bankruptcies. Unfortunately, most bankruptcy cases for entities which start as Chapter 7 cases suffer from this. Entities Prudent entrepreneurs conduct business through entities. Popular entity forms include a.) corporations, b.) limited partnerships, and c.) limited liability companies.1 Conducting business through an entity protects the business owner from most of the business’ creditors.2 The risk of loss is limited to their capital contributions to…Read More

Avoiding Clouds on Homestead Exemptions[1]
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: November 29, 2016

We represent a debtor with a substantially younger, non-debtor spouse and equity in their home, exceeding the debtor’s homestead exemption. The home is owned as tenants in the entireties. This means that the surviving spouse inherits the property free and clear of the deceased spouse’s creditors. The spouse’s youth dissuaded the chapter 7 trustee from trying to sell the home free and clear of both owner’s interests.[2] The trustee got creative. She tried selling just the debtor’s interest in the house. The buyer gets the right to live with the…Read More

Face-Saving for Embarrassed Entrepreneurs
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: September 24, 2015

The other day, I had a telephone call with a client we’ll call Slim. Slim was worried about the impact a venture’s winding up might have on his public image. His concern was that a creditor might blab to the press, which would then show him in a negative light. Slim is an entrepreneur and, as an entrepreneur, Slim assumes the risk of failing ventures. Most fail. I assume Slim’s reputation is built, in part, on his success. I also assume that his success rate is favorable. Failure’s Positives Slim…Read More

Volunteering for Involuntaries: Vey!
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: July 24, 2015

Involuntary bankruptcy petitions may be the nuclear weapon in the commercial debtor-creditor collections arsenal. Like its military counterpart, it devastates. An alleged debtor may be crippled economically, where it was viable before the involuntary petition was filed. To limit abuse of involuntary petitions, the Bankruptcy Code imposes onerous penalties on petitioning creditors with failing petitions. Those penalties include: (A) costs; or (B) a reasonable attorney’s fee; or against any petitioner that filed the petition in bad faith,1 for – (a) any damages approximately caused by such filing; or (b) punitive damages.2…Read More

A Warning to “Good Guys”
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: June 10, 2015

In the 1960’s, New York City’s WMCA radio called itself the “Good Guys.” Today, referring to a “good guy” frequently means a “good guy clause” in a guarantee for a commercial real estate lease. A “good guy clause” generally provides that as long as the tenant: a.) pays its rent through its vacating the premises; b) provides the landlord with advance notice of its leaving, and c.) leaves the premises in good condition, then the guarantor limits their personal liability for the balance of the lease’s rent. This provides landlords…Read More

Bankruptcy Assisted Divorces
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: April 22, 2015

Marx was right! “Love flies out the door when money comes innuendo.”1 Unfortunately for some, money problems keep some couples together who’d rather be divorced. The issues become who pays the debt versus who keeps the couch, cat and castle.2 Bankruptcy can help divorcing couples get two fresh starts: one marital and one financial. Thanks to Congress the Bankruptcy Code Amendments of 2005 made this possible. The “sea change” was: (a) changing domestic support obligations to first priority in payments to unsecured creditors; and (b) making or presuming, as non-dischargeable,3 all…Read More

Tech-Talk: We’ve Lost an Automatic Stay!
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: January 12, 2015

Technical bankruptcy procedure can be fun. So, here goes. Dueling Districts Imagine two bankruptcy cases, involving the same debtor or their affiliate in two different districts (e.g., Delaware and Wyoming). It’s likely that one set of interested parties (e.g., debtors, creditors, regulators) will find one of the venues inconvenient. Often, the second case’s filing responds to the first case’s inconvenient location. Federal Rule of Bankruptcy Procedure 1014(b) (“Rule 1014(b)”) provides a means for moving the inconvenient case to the preferred location. A motion is filed in the pending first case’s…Read More

Debt Relief for New York Rent-Stabilized Tenants
  • On Behalf Of: Wayne Greenwald, P.C.
  • Published: December 18, 2014

Until recently, New York State residents with rent stabilized apartments risked losing their homes in bankruptcy. This unhappy state ended in the recent decision, In the Matter of Mary Veronica Santiago-Monteverde. etc., (Santiago-Monteverde.”)1 New York State’s highest court ruled that rent stabilized leases are “public assistance benefits” which are unavailable to be converted to cash to pay creditors. The Bankruptcy Context Filing a bankruptcy case creates an “estate” comprised of all the debtor’s property. In chapter 7 cases, a trustee is appointed to administer that estate. Trustees administer cases by selling marketable “non-exempt”…Read More

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