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Recent Case Adds to Trend of Courts Allowing Bankruptcy Trustees to “Look Back” as Far as 10 Years to Avoid Transfers When the IRS is a Creditor

In the recent case of Mitchell v Zagaroli, 2020 WL 6495156 (Bankr. W.D.N.C. 2020), 2020 WL 6495156 (Bankr. W.D.N.C. 2020), the bankruptcy court ruled that a chapter 7 trustee under 11 U.S.C. § 544(b) could “step into the shoes” of the IRS as an actual creditor to avoid a fraudulent transfer of property occurring up to ten years prior to the petition date. Under section 544(b) of the Bankruptcy Code, the trustee of a bankruptcy estate...

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Debtors Beware: Exemption Planning in California Now Subject to Challenge

Nearly two decades after the Ninth Circuit ruled that debtors could protect their assets from creditors by converting them to exempt status before they file for bankruptcy, the Court of Appeals for the Second District of California has determined that such a transmutation may be challenged as a fraudulent conveyance under California law. In Nagel v. Westen, 59 Cal. App. 5th 740 (2021), Nicole Nagel (“Nagel”) received a 4.5 million dollar arbitration award against Tracy...

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Ravn Alaska’s Emergence from Bankruptcy

From Float Alaska to the New Ravn—Acquiring Alaska’s Largest Regional Airline through Bankruptcy During the COVID-19 Pandemic In March of 2020, Ravn Air Group, Inc. and its seven affiliates (collectively, Ravn) comprised the largest regional air carrier in the State of Alaska.  Ravn had 1,300 employees, 72 aircraft, 21 hub airports, and 73 facilities serving 115 destinations in Alaska, with 400 daily flights.  In addition to transporting passengers throughout the state, Ravn provided logistics, mail,...

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Thoughts for Small Businesses Considering Bankruptcy

For an operating business, the bankruptcy process can be time-consuming, invasive, difficult to maneuver, and expensive.  You need someone who can explain all of the options, and prepare you for what’s to come. Rule #1:  Don’t wait until the last minute.  There are lots of things most operating companies need to do when they file for bankruptcy.  Attorneys need time to evaluate what needs to be done, gather evidence, prepare motions, and hit the ground...

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How the CARES Act Has Impacted Bankruptcy Cases

Earlier this year, we wrote about the Small Business Reorganization Act of 2019 (the “SBRA”), which went into effect on February 22, 2020.  For a quick recap on the SBRA, click here for our prior post.  In this post, we’ll discuss a few ways the CARES Act has affected bankruptcy cases. More businesses can seek relief under the new Subchapter V of Chapter 11 One of the things the SBRA did not do was change...

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