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ILC e-Bulletin: Small Business Reorganization Act Imposes New Diligence Requirements on Preference Plaintiffs and Modifies Venue Provisions For Proceedings to Recover Less Than $25,000.

December 13, 2019 Dear constituency list members of the Insolvency Law Committee: On August 23, 2019, President Trump signed the Small Business Reorganization Act of 2019 (“SBRA”) into law. The SBRA is scheduled to take effect on February 19, 2020. Generally, the SBRA does two things. First, it creates a new subchapter within chapter 11 for “small business debtor reorganization” cases. These changes to the Bankruptcy Code are summarized in an ILC e-Bulletin prepared by former ILC Chair Robert Harris. You can read his e-bulletin here. Second, the SBRA amends 11 U.S.C. § 547(b) and 28 U.S.C. § 1409(b) to curb perceived abuses by trustees of their ability to avoid and recover preferential transfers. The amendment to section 547(b) of the Bankruptcy Code forces a trustee (or a debtor in possession, committee, or other person exercising the rights of a trustee) to evaluate the transferee’s potential defenses before filing suit....

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Case Analysis: In Hugger v. Warfield (In re Hugger), 2019 WL 1594017 (9th Cir. BAP Apr. 5, 2019)

August 16, 2019 Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY In Hugger v. Warfield (In re Hugger), 2019 WL 1594017 (9th Cir. BAP Apr. 5, 2019), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) affirmed an order denying a chapter 7 debtor’s request that the bankruptcy court vacate his own discharge and dismiss his case because he had filed the case too soon to discharge $40,000 of taxes. To read the full unpublished decision, click here. FACTS In September 2015, Anthony Hugger (the “Debtor”) filed tax returns for seven years ranging from 2001 through 2012. For those years, he owed approximately $40,000 in taxes. On January 9, 2017, the Debtor filed a chapter 7 petition. On May 9, 2017, the U.S. Bankruptcy Court for the District of Arizona (the “Bankruptcy Court”) entered...

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Case Analysis: In Easley v. Collection Serv. of Nev., 910 F.3d 1286 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) expanded the holding in In re Schwartz-Tallard, 803 F. 3d 1095 (9th Cir. 2015)

June 24, 2019 Dear constituency list members of the Insolvency Law Committee, the following is a case update. Summary In Easley v. Collection Serv. of Nev., 910 F.3d 1286 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) expanded the holding in In re Schwartz-Tallard, 803 F. 3d 1095 (9th Cir. 2015) (en banc), to mean that debtors are entitled to recover appellate attorneys’ fees when successfully challenging an initial award of fees and costs awarded to them under section 362(k) for a willful violation of the automatic stay, not only when defending such award. To read the full published decision, click here. Facts Appellants, chapter 13 debtors (“Debtors”), scheduled a hospital as a general unsecured creditor in the amount of $3,535, but the debt had previously been assigned to appellee Collection Service of Nevada (“Appellee”). Unaware of the bankruptcy, Appellee pursued collection...

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Case Analysis: Brace v. Speier (In re Brace), No. 17-60032 (9th Cir. Nov. 8, 2018), Insolvency Law e-Bulletin, Insol. L. Comm., Bus. L. Sec., Cal. Law. Ass’n (Mar. 18, 2019)

March 18, 2019 Dear constituency list members of the Insolvency Law Committee, the following is a recent case update. SUMMARY On January 16, 2019, the California Supreme Court granted the request of the U.S. Court of Appeals for the Ninth Circuit to decide questions of California law relevant to the Ninth Circuit’s determination of Brace v. Speier (In re Brace), No. 17-60032 (9th Cir.). The question presented by the Ninth Circuit is whether the “form of title” presumption in California Evidence Code section 662 overcomes the presumption in California Family Code section 760 that all property acquired by a married person during marriage is community property. To read the Ninth Circuit’s Order Certifying Question to the Supreme Court of California, click here. BACKGROUND Clifford and Ahn Brace were married in 1972. In the late 1970s, they purchased a home in Redlands. At some point they also purchased a rental property...

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Case Analysis: Klein v. ODS Technologies, LP (In re J & J Chemical, Inc.), Adv. No. 18-08029-JDP (Bankr. D. Idaho Jan. 11, 2019), Insolvency Law e-Bulletin, Insol. L. Comm., Bus. L. Sec., Cal. Law. Ass’n (Mar. 15, 2019)

March 15, 2019 Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY In Klein v. ODS Technologies, LP (In re J & J Chemical, Inc.), Adv. No. 18-08029-JDP (Bankr. D. Idaho Jan. 11, 2019), a U.S. Bankruptcy Court for the District of Idaho (the “Court”) held that the court in which a bankruptcy case is pending is a proper venue for a fraudulent transfer action brought under sections 544(b) or 548 of the Bankruptcy Code, regardless of the amount at issue or the residence of the defendant. The Court also held that even if 28 U.S.C. § 1409(b) applies to such an action, the court is a proper venue if the value of the property to be recovered is at least $1,300, and the higher $12,850 threshold for actions against a non-insider to recover “a debt” does not apply....

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