Bankruptcy

Student Loan Discharge: Opinion Of Judge Walker of Middle District Of Georgia Illustrative Of "Certainty Of Hopelessness" Required For Discharge

Posted on May 23, 2013
The opinion of Judge Walker in the case of  In re Williams (Williams v. American Education Service, et al,), 2013 Bankr. LEXIS 2050, Adv. Proc. No. 12-5059 (Bankr. M.D. Ga. May 13, 2013) is a good example of the standard that must be met to discharge student loans...

U.S. Supreme Court Rules On Meaning Of "Defalcation" In Section 523(a)(4) in Bullock v. BankChampaign.

Posted on May 14, 2013
In a case appealed from the Eleventh Circuit Court of Appeals, the United States Supreme Court ruled on a case involving the definition of "defalcation" in 11 U.S.C. § 523(a)(4).  The case, decided yesterday, May 13, 2013, is Randy Bullock v...

Judge Diehl In ND Georgia Allows Lien Stripping In Chapter 7, Follows McNeal

Posted on April 12, 2013
In In re Malone, Ch. 7 Case No. 12-61289, 2013 Bankr. LEXIS 1282 (Bankr. N.D. Ga. March 28, 2013) (click here for .pdf), the Debtor filed a  Motion to Determine Status of Wholly Unsecured Second Mortgage on Real Property when Debtor's case was pending as a Chapter 13, but the court heard the matter only after conversion to Chapter 7...

Middle District Bankruptcy Court Approves Lien Stripping In Chapter 7 Case, Although Judge Disagreed With Precedent

Posted on March 24, 2013
In May 2012 the Eleventh Circuit entered its opinion in  In re McNeal and seemingly approved the stripping of wholly unsecured second liens in Chapter 7 cases.  Since this was an unpublished opinion of a panel (and non-binding), and contrary to authority in other Circuits, lawyers have been watching to see what Bankruptcy Courts would do until the issue was decided by the full Circuit or the Supreme Court...

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Bankruptcy Rule Establishing Deadline To File Dischargeability Complaint Is Strict, "Hard And Fast" Rule.

Posted on March 22, 2013
In United Community Bank v. Harper (In re Harper), Adv. Proc. No. 12-1080, 2013 Bankr. LEXIS 1080 (Bankr. N.D. Ga. January 29, 2013 (Judge Drake) (click here for .pdf of order), the issue was whether Federal Rule of Bankruptcy Procedure 4007(c)  created a strict deadline for filing adversary complaints to determine dischargeability of debts under §523(c)...

Secured Lender Only Entitled To Secured Claim For Actual Fees, Not Contractual Fees, After Foreclosure

Posted on March 15, 2013
In a key decision in the Northern District of Georgia, Judge Hagenau has ruled that a secured creditor is only entitled to a secured claim, pursuant to § 506(b), to the extent of its actual and reasonable fees rather than contractual and statutory fees after a foreclosure sale where the property has not been abandoned...

There is no "Oops Defense" When Debtor Lies Or Misleads the Court In Schedules And Pleadings

Posted on February 24, 2013
Many debtors arrive in Bankruptcy Court having committed missteps, or even misconduct, in their financial affairs and dealings with others.  Even for these debtors, Bankruptcy is often an opportunity for them to get a "fresh start."  However, one of the requirements of this fresh start is that a debtor must be completely honest in documents and pleadings filed in their Bankruptcy case...

Georgia Supreme Court Issues Significant Opinion That Could Invalidate Many Deeds In Georgia

Posted on February 21, 2013
On February 18, 2013, the Georgia Supreme Court issued its opinion in Wells Fargo Bank. N.A. v. Gordon, No. S12Q2067, 2013 Ga. LEXIS 158 (Feb 18, 2013).  The case was certified to the Georgia Supreme Court by the Eleventh Circuit Court of Appeals in In re Codrington, 691 F3d 1336 (11th Cir...

Tort Claim That Arose Before Chapter 7 Case Was Filed, But Not Discovered Until Long After Discharge, Was Property Of Bankruptcy Estate (M.D. Ga.)

Posted on February 18, 2013
In an interesting opinion, Chief Judge Laney of the Middle District of Georgia held that a tort claim that "arose" well before a Chapter 7 filing but was not discovered by the debtor until well after discharge was property of the Chapter 7 case...

To Increase Chances Of Getting Your Chapter 13 Plan Confirmed, Add An Apology

Posted on February 16, 2013
According to a new study by Robert Lawless and Jennifer Robbennolt (summarized in the Wall Street Journal), Judges are more likely to approve a Chapter 13 plan that includes an apology.  From the Wall Street Journal article: In the 29-page study, Lawless and colleague Jennifer Robbennolt said they told participating judges about the Millers, a fictional family of four with a $180,000 home, $25,500 in credit card debt and a $26,000 Ford Explorer SUV...

Imminent Foreclosure Grounds For Waiver Of Pre-Petition Counseling Certificate

Posted on February 08, 2013
In In re Stanley, 2012 Bankr. LEXIS 6031 (Bankr. N.D. Ga. Nov. 8, 2012), the debtors certified that they tried to obtain credit counseling but were unable to complete it because they needed to file their Chapter 13 petition to stop a foreclosure the same day...

Discharge Exception For Educational Loans Not Limited To Higher Education

Posted on February 08, 2013
It is fairly well settled and well known that public and private student loans are nondischargeable pursuant to Section 523(a)(8) of the Bankruptcy Code, unless the debtor meets the high bar of showing "undue hardship."  This section states the following: A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt— (8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for— (A)  (i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual...

Judge Barrett in S.D. Ga. Holds That Chapter 11 Plan May Include Lump Sum Balloon Payment For Priority Tax Claim

Posted on February 07, 2013
It is common for Chapter 11 debtors to have significant tax claims.  Under the Bankruptcy Code, tax claimants have priority status and must be paid in full, with interest, within sixty months of the petition date rather than the effective date of a plan...

10th Annual Emory Bankruptcy Developments Journal Symposium - February 28, 2013.

Posted on February 06, 2013
Symposium Schedule - February 28, 2013 8:00 am – 8:50 am Registration and Breakfast 8:50 am - 9:00 am Introduction Dean Robert Schapiro, Emory University School of Law 9:00 am – 10:30 am Corporate Panel: Municipal Restructuring Moderator: Gary Marsh,  McKenna Long & Aldridge LLP Patrick Darby, Partner, Bradley Arant Boult Cummings  Mark Kaufman, Partner, McKenna Long & Aldridge LLP  Marc Levinson, Partner, Orrick Eric Schaffer, Partner, Reed Smith 10:30 am – 10:40 am Break and Refreshments 10:40 am – 12:10 pm Consumer Panel: Fiduciary Exceptions to Discharge with a Focus on Defalcation Moderator: Ed Philpot, Executive Managing Editor, EBDJ  The Honorable Paul W...

ND Ga - Exception To Automatic Stay For Pre-Petition Writ Of Possession Only Applies In Landlord-Tenant Relationship

Posted on January 14, 2013
In In Re Higgs, Ch. 13 Case No. 12-76496-pwb, 2012 Bankr. LEXIS 6008 (Bankr. N.D. Ga. November 2, 2012), the Movant purchased a foreclosed property from the lender after a foreclosure sale.  Movant proceeded to obtain a writ of possession in the Magistrate Court to evict the Debtor, who was not the original borrower but who claimed he had a lease with another person who was also not the original borrower (but with the same last name)...

ND Ga - Chapter 13 Debtor May Take "Marital Adjustment" For Non-Filing Spouse's Income

Posted on January 09, 2013
Chapter 13 cases, especially after 2005, are often a tightrope between being able to pay basic living expenses and contributing all disposable income to the plan.  Chapter 13 Trustees are often viewed as wanting to squeeze every penny from a debtor...

11th Circuit: Court May Consider Chapter 7 Debtor's Ability To Pay In "Totality Of Circumstances" And Consideration Of Abuse

Posted on December 18, 2012
In In re Witcher,  No. 11-15883 (11th Cir. December 13, 2012) (click here for opinion), the issue before the Court was... whether a court may take into account a debtor's ability to pay his or her debts in determining whether "the totality of the circumstances ...

Article on Receiverships: "Avoiding A Nightmare" By Greg Hays

Posted on December 16, 2012
Greg Hays of Atlanta-based Hays Financial Consulting published an article in the Fall 2012 issue of Receivership News, a publication of the California Receivers Forum. The subject and scope of the article, entitled "Avoiding a Nightmare," is described in the introduction:  A properly structured receivership can provide a cost-effective, efficient, and flexible vehicle to protect and maximize the assets of a financially distressed or otherwise troubled entity and to allow stakeholders to minimize losses and maximize recovery...

In Case of First Impression in Eleventh Circuit, Bankruptcy Court Holds That Overpayment of Domestic Support Obligation Is Entitled to Priority Status

Posted on October 30, 2012
In a case of first impression in the Northern District of Georgia, and perhaps the Eleventh Circuit, the Court held that a claim for the overpayment of a domestic support obligation was entitled to priority status under 11 USC § 507(a)(1)(A).  In In re Knott, Ch...

The Importance of Proper Planning: Partnership & Trust Assets of Deceased Spouse Become Property of Bankruptcy Estate

Posted on October 26, 2012
A recent opinion involves the convergence of a family partnership, will and probate estate, trust and Bankruptcy estate and highlights the need for appropriate planning and quality legal advice for each step in order to avoid a negative result years down the road...

Bankruptcy Trustee Of Swoozie's Sues Founder & CEO For Breach Of Fiduciary Duty & Corporate Waste

Posted on October 20, 2012
Previous articles have discussed the fiduciary duties of officers and directors of companies in financial trouble (see articles here and here). In another adversary proceeding to hold owners, officers and directors responsible for the financial demise of their companies, the Chapter 7 Trustee of Swoozie's has filed a Complaint against the founder and former CEO of the company...

Chapter 7 Bankruptcy Trustee Files Second Lawsuit Related To Raving Brands Principals And Affiliates

Posted on August 27, 2012
A second lawsuit has been filed in the Chapter 7 cases related to Raving Brands and its owners, officers and affiliated companies.  The first adversary proceeding was filed last week in the Chapter 7 case In re Raving Brands, Inc., Ch. 7 Case No...

Historic Morris Brown College In Atlanta Files Chapter 11 Bankruptcy Petition To Avoid Foreclosure

Posted on August 26, 2012
Morris Brown College, a historically black college in Atlanta and part of the Atlanta University Center (which also includes Clark Atlanta University, Spelman College, Morehouse College and the Morehouse School of Medicine) filed a Chapter 11 petition in the Northern District of Georgia on August 25, 2012 to avoid a foreclosure of its property...

Bankruptcy Trustee Of Raving Brands, Inc. (Moe's, Doc Greens, Flying Biscuit, Monkey Joe's) Files Suit Against Former Owners, Officers And Related Entities, Alleges Fraud, Deception and Breach Of Fiduciary Duties

Posted on August 21, 2012
The Chapter 7 Trustee of Raving Brands, Inc.  filed on August 16, 2012 an adversary proceeding against several former owners, officers and directors of the Debtor, as well as several affiliated companies, alleging, inter alia, that the parties engaged in a widespread effort to deceive the public, its franchisees, the press, courts and its creditors...

ND Ga - Judge Drake Holds Bank Had Prepetition Right To Setoff Even In Absence of Formal Demand Or Default

Posted on August 20, 2012
In re MCB Financial Group, Inc., Case No. 10-11176-WHD, 2011 Bankr. LEXIS 5502 (Bankr. N.D. Ga. March 31, 2011) (click here for .pdf of order) In 2008, Debtor MCB Financial (a bank holding company) refinanced a loan with Independent Banker's Bank of Florida ('IBB'), and signed a demand note in the amount of $2,750,000...

Former UGA Coach Jim Donnan Faces More Bankruptcy And Civil Fraud Problems

Posted on August 17, 2012
Jim Donnan has more problems with the SEC, but this time it is the Securities and Exchange Commission and not the other football teams in the Southeastern Conference.  Donnan, the football coach for the Georgia Bulldogs from 1996-2000 was sued by the SEC on August 16, 2012 and accused of actively participating in and promoting a multi-million dollar Ponzi Scheme...

Bankruptcy Filings Are Down In Georgia And Nationwide

Posted on August 11, 2012
The latest statistics from the Northern District of Georgia Clerk's Office and Administrative Office show, not surprisingly, that filings are down.  In the Northern District of Georgia, Chapter 7 and 13 filings are down significantly from January to June 2012, compared to the same time period in 2011...

Reese v. Provident Funding: Georgia Court of Appeals Ruling Potentially Invalidates Thousands Of Foreclosures

Posted on August 02, 2012
In a case of first impression, the Georgia Court of Appeals has held that a foreclosure notice must identify both the secured lender and the "individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor...

Southern District of Georgia: Small Business Chapter 11 Plan Must Be Filed Within 300 Days; Deadline Cannot Be Extended Pursuant To Section 105.

Posted on July 20, 2012
In re Randi's, Inc., Ch. 11 Case No. 11-10431, 2012 Bankr. LEXIS 2920 (Bankr. S.D. Ga. June 27, 2012) (J. Barrett) (click here for .pdf copy of opinion). The 2005 Amendments to the Bankruptcy Code ("BAPCPA") included new rules for Chapter 11 cases filed by small businesses...

Ritz Camera, Parent of Wolf Camera and Boaters World, Files Chapter 11 Petition in Delaware

Posted on June 22, 2012
Ritz Camera & Image, LLC, and Ritz Interactive, LLC filed Chapter 11 Petitions in Delaware today.  The Ritz Camera case is Case No. 12-11868 (click here for Chapter 11 petition).  The debtors have filed a Motion for Joint Administration under the Ritz Camera case number...

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