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Second Circuit Analyzes Concealment of a Debtor’s Beneficial Interest in Assets in the Name of Another Under Section 727(a)(2)(A): Gasson v. Premier Capital, LLC, 43 F.4th 37 (2d Cir. 2022)

By Shantal Malmed Brief Summary A creditor obtained judgment against the chapter 7 debtor for denial of the debtor’s discharge under 11 U.S.C. § 727.  On the first appeal, the district court affirmed.  On further appeal to the Second Circuit, the debtor challenged the court’s determinations that he had an interest in in an entity, that he concealed that interest with an intent to hinder creditors, and that the concealment occurred within the one-year statutory...

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Ninth Circuit to Consider Whether Mechanic’s Lien is Enforceable in Bankruptcy Case

By Michael G. D’Alba Introduction The filing of a bankruptcy case “operates as a stay . . . of . . . any act to create, perfect, or enforce any lien against property of the [bankruptcy] estate.”  11 U.S.C. § 362(a)(4) (emphasis added).  The Bankruptcy Code defines the term “lien” as an “interest in property to secure payment of a debt . . . .”  Id. at § 101(37).  However, there are also exceptions to...

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Results May be a Relevant Factor to Awards of Bankruptcy Professional Compensation, Says Sixth Circuit in In re Village Apothecary, Inc.

By Uzzi O. Raanan When deciding what is “reasonable compensation” to award to bankruptcy professionals, including trustees and their counsel, can courts consider the ultimate “results obtained” by the professionals as one of the lodestar factors, even though this factor is not specifically included among the factors enumerated in 11 U.S.C. § 330(a)(3)?  The Sixth Circuit Court of Appeals recently answered this question in the affirmative.  See In re Village Apothecary, Inc., 2022 WL 3365131 (2022). ...

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Third Circuit Addresses the Fiduciary Obligations of Future Representatives Under 11 U.S.C. § 524(g): In re Imerys Talc America, Inc., 38 F.4th 361 (3d Cir. 2022)

By Michael G. D’Alba Background Imerys mined, processed, and distributed talc.  As of 2019, more than 14,000 claimants had sued Imerys, alleging bodily injuries from talc exposure.  Imerys would inevitably face more of such lawsuits because talc injuries often manifest long after exposure. Accordingly, Imerys considered relief under chapter 11 of the Bankruptcy Code.  In particular, Imerys wanted a trust that would compensate both present and future talc claimants, and an injunction to protect the...

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Appellate court rules that subchapter V small business debtors don’t need to be for profit businesses

By Zev Shechtman In re RS Air, LLC, __ B.R. __, 2022 WL 1288608 (B.A.P. 9th Cir. April 26, 2022) Case Synopsis In order to qualify for small business reorganization under subchapter V of chapter 11 of the Bankruptcy Code, a debtor must be “engaged in commercial or business activities.”  In this case, the Bankruptcy Appellate Panel of the Ninth Circuit determined that a debtor does not need to have a “profit motive” in order...

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