In a recent mega-retail case, our client had outstanding, pre-petition purchase orders (“POs”) for goods the debtor wanted delivered. It’s true that post petition suppliers have an administrative priority to get paid. However, that priority is meaningful only if there is cash available for payment. In this, as in most cases, lenders had liens on all of the debtor’s assets. The debtor got authority to use the banks’ cash collateral, subject to a budget. However, the budget did not disclose whose sales got paid. It was possible, if the reorganization…Read More
THE DEMISE OF NUNC PRO TUNC LEASE REJECTION[1] Bankruptcy Code § 365(b) enables trustees and debtors in possession (“Trustees”) to “reject” or terminate pre-petition leases. This leaves the non-debtor lessor without a lessee and with a “rejection” claim for what may be less than the rent reserved under the balance of the lease.[2] Before a lease is rejected, Trustees must pay and remain current on post-petition rent due under leases.[3] Unpaid post-petition rent is an “administration” claim with priority over unsecured claims and sharing estate assets with other administration priority…Read More
People ask, “what’s involved in chapter 7 personal bankruptcy case?” Here’s a practical answer: Recognize the problem Investigate professionals Interview professionals Chose and retain professional Chose a course of problem-solving – alternatives to bankruptcy may be preferable Decide to file Determine the best time to file Prepare petition, schedules and statements Take mandatory pre-petition counseling File petition If an incomplete “emergency” petition was filed, finish and file schedules and statements (within 14 days of filing) Provide trustee with required documents (e.g. tax returns, pay stubs, bank records) Attend meeting of…Read More
ABC News offers a map[1] showing only ten states avoiding mass shootings within their borders. That means forty, or fifty, state representatives should favor keeping automatic and semi-automatic weapons from civilians. They should vote to protect their constituents from needless bloodshed and sorrow. This not happening defies reason. No one needs an automatic or semi-automatic weapon to hunt unarmed game. Those weapons exist for one purpose: killing people. The peoples’ representative should protect constituents from a proven threat: people-killing weapons. People-killing weapons should be available only to the peoples’ approved agents:…Read More
Kudos to Time magazine for its article on Sir Harry Evans restating the need for clarity in communicating and communications. Sir Harry wrote Do I Make Myself Clear which offers ten rules for writing[1], expounding on the rules with each chapter. In my experience as a lawyer, a rule is stated. Its vagaries produce discussion through its application. When the rule maker explains the reasons for the rule’s creation, a well-written rule does not require discussion. However, the rule’s unanticipated applications could produce discussion. Most of my writings’ audiences are judges. They…Read More
Last week, I was given seven minutes for a presentation to some smaller business owners. Wondering what wisdom I could impart in that brief period, I created the following outline. They thought I should share it with the blogosphere. I hope you find it helpful. “Any ass can make a fortune. The trick is keeping it.” ~ The Sage of Centennial 1. Don’t sign a guarantee you wouldn’t want to pay. 2. But, get one if you can. 3. Don’t take payment from someone who does not owe it to you.…Read More
I’ve been working on returning to the blogosphere with interesting bankruptcy stuff. Unfortunately, last Sunday’s presidential debate irked my military historian. So, here’s my damn fact-check and opinion. On October 9, Donald Trump criticized Hillary Clinton again for disclosing her strategy against ISIS. He said that Generals Douglas MacArthur and George Patton are turning in their graves for this disclosure. Trump wants to take the enemy by total surprise. Trump’s disdain for the rule law is revealed anew. ISIS is dug into urban areas, hiding behind civilians. Advance notice to…Read More
Route 21 Assoc. of Belleville, LLC v. Millennuim Custodial Trust (In re Lyondell Chemical Company). —-, 2013 WL 5733196 C.A.2 (N.Y.),2013. The Second Circuit Summary Order’s terms render it of no precedential value. Nevertheless, the decision is instructive. The Summary Order adopted the District Court’s decision which denied a purchaser of environmentally contaminated property’s motion: a.) to compel the debtor-seller’s specific performance of a site remediation agreement; and b.) for an administrative priority for the creditor’s future clean up costs claim. The Second Circuit restated the debtor’s right to reject…Read More
The October 21, 2013, New York Times discussed a case highlighting the need for a law exempting New York State’s residential leases from being used to satisfy creditors’ claims from judgments or in bankruptcy. Since 2005, the “homestead exemption” provided New Yorkers owning their homes increased from $10,000 to $150,000 of equity in their homes. The amount effectively doubles if the home is jointly owned. For renters, only their security deposits are exempt. This ill of this discrepant treatment is apparent when a tenant has a very valuable, low-rent lease.…Read More
