A reaffirmation agreement is an agreement by a debtor and a creditor about how to treat a particular debt that would otherwise be discharged in the debtor’s bankruptcy. Usually, the debt is secured by collateral that the creditor could repossess or foreclose on. In the reaffirmation agreement, the debtor agrees to pay some or all of debt, usually, according to schedule. In exchange, the creditor agrees not to repossess or foreclose on collateral that secures the debt, as long as the debtor makes the agreed-upon payments. A valid reaffirmation agreement puts the debtor under a legal obligation to pay back the entire amount agreed upon, even if this is more than the value of the collateral that the debtor is keeping. So if the debtor defaults in the payments required under the reaffirmation agreement, the creditor can repossess or foreclose, and then seek a personal judgment against the debtor if the sale of the collateral does not satisfy the debt.

(posted 2 hours 37 min ago)

Texas entrepreneur Samuel Wyly has filed for bankruptcy on Sunday, stating he does not own the assets to pay roughly $400 million in penalties for an overseas fraud scheme.
According to the Chapter 11 petition, Wyly stated he had assets and debt between $100 million and $500 million. He attributed his debt to the “massive costs of investigations and then litigation” by the Securities and Exchange Commission.
“While the debtor has substantial assets, he does not have the ability to pay the full amount of all asserted claims at the present time,” according to the filing.
A New York judge ruled last month that Wyly, 80, and the estate of his late brother, Charles, must forfeit up $187.7 million plus interest. In May, a civil jury found they were involved in a 13-year fraud scheme in which they used offshore trusts and subsidiaries to conceal stock sales.
It is believed the Wylys accrued upwards of $550 million in untaxed earnings through their system, which lasted over a decade.
The SEC is listed as Wyly’s second greatest creditor, with a claim of $198.1 million, according to court documents. Wyly listed the Internal Revenue Service as his biggest creditor, with disputed debts “unknown.”
Depending on how interest is calculated, the total payment owed by Wyly and his late brother’s estate will fall between $300 million and $400 million.

Total Bankruptcy
(posted 4 hours 9 min ago)

Bankruptcy and divorce are closely intertwined, and filing for Chapter 7 or Chapter 13 can have a significant impact on matters like child custody and domestic support.  If you file for bankruptcy, can the courts take away your custody rights?  Will you still have to pay off your child support debts?  Our Pennsylvania bankruptcy lawyers explore some of the potential legal outcomes.

Parent Holds The Hand Of A Small Child
If I File for Bankruptcy, Do I Still Have to Pay Child Support?
In bankruptcy, debts are divided into two basic categories: dischargeable debt, which can be eliminated, and nondischargeable debt, which the debtor is stuck with.  Whether you file for Chapter 13 or Chapter 7, most obligations fall into the dischargeable category, including major sources of debt like credit card bills and medical bills.  However, there are still a few debts which retain nondischargeable status — and child support is one of them.

Young, Klein & Associates
(posted 4 hours 46 min ago)

Although the bankruptcy world has long been acquainted with Ponzi schemes, the courts have not clearly answered the question of how to distribute investors’ funds after a scheme fails – especially in the scenario where certain investors profit. The United States Bankruptcy Court for the District of Utah recently weighed in on the issue in Gillman v. Russell (In re Twin Peaks Financial Services, Inc.), in which it considered whether returns to investors in a Ponzi scheme are recoverable as fraudulent transfers.
The Defendant’s Investment
The debtor in Twin Peaks operated a real estate investment firm.  Apparently, however, the investment returns were not what they seemed, and the fund turned out to be a Ponzi scheme. After the scheme failed and the debtor filed for bankruptcy, the chapter 7 trustee commenced an adversary proceeding against the defendant, an investor in the scheme who had received over $440,000 from the debtor in excess of his original investment. The trustee argued, among other things, that the defendant’s proceeds were fraudulent transfers under section 548 of the Bankruptcy Code and moved for summary judgment.

(posted 7 hours 52 min ago)

rules 2
Bankruptcy law requires that bankruptcy attorneys share with you the following rules. They are given as information and not as an attempt to scare you from filing bankruptcy. Bankruptcy is a right provided to you under federal law. These rules are only given to prevent people from intentionally abusing this process by cheating and being dishonest. Informing a consumer of these rules is required by law under the Bankruptcy Reform Act enacted by Congress in 2005 under intense lobbying by the credit industry and should not intimidate you from filing bankruptcy. Our office has assisted people with filing bankruptcy for over 25 years. During that period of time, we have noticed that almost all of our clients are honest and hardworking people who, due to circumstances beyond their control, cannot repay their debts.
If you don’t follow these rules, you could be subject to criminal sanctions. If you do not follow these rules your case could be dismissed and you may not be able to re-file your case.
Rule #1 – The information you give to an attorney, a staff member of the law firm, the bankruptcy trustee, or the bankruptcy court that is provided with your petition and during the case must be complete, accurate, and truthful.

(posted 8 hours 1 min ago)

This post was updated with new information at 11:39 a.m. EDT.
GT Advanced Technologies has, for the third time, asked a court to push back the deadline for Apple Inc. to state its case for keeping secret the causes of GT Advanced’s bankruptcy.
 

WSJ.com: Bankruptcy Beat
(posted 9 hours 17 min ago)

Authored by Scott St. Amand and J. Ellsworth Summers, Jr. and Scott St. Amand and J. Ellsworth Summers, Jr. of Rogers TowersAs we mentioned in our previous posts regarding document preservation, establishing a written document retention and destruction policy is essential to any company, large or small.  As with the Pradaxa case out of the Southern District of Illinois, a recent case out of the Northern District of New York, Research Foundation of SUNY v. Nektar Therapeutics, exemplifies the pivotal role such a policy has in the event of litigation.  RF SUNY brought complex breach of contract and breach of the implied duty of good faith and fair dealing actions against Nektar, but it was the defendant, Nektar which filed the instant spoliation motion.
Nektar alleged that the RF SUNY was grossly negligent for failing to preserve documents which “may have been relevant to future litigation” as well as being grossly negligent “in its efforts to preserve documents.” Nektar also alleged that RF SUNY failed to “to timely issue written litigation-hold notices,” “preserve all relevant backup-tape data,” and “suspend its auto-delete practices.”

Florida Banking Law Blog
(posted 9 hours 33 min ago)

LDK Solar  USA filed for Chapter 11 protection Tuesday to implement a debt-restructuring agreement with senior bondholders owed about $295 million. Read the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
Texas entrepreneur Samuel E. Wyly filed for Chapter 11 bankruptcy protection on Sunday, weeks after a judge ordered him to pay several hundred million dollars in a civil fraud case. Read the DBR article in The Wall Street Journal.

WSJ.com: Bankruptcy Beat
(posted 9 hours 41 min ago)
Scholnick Law
(posted 10 hours 19 min ago)
Chelsea Heath, Girls Gone Wild’s 2010 Hottest Girl in America.
Chris Lambeth

Lawyers who are settling old legal disputes involving Girls Gone Wild have reached a deal with Chelsea Heath—the company’s Hottest Girl in America 2010—over thousands of dollars in prize money that she was never paid.
Ms. Heath, 25, a Louisiana native, was picked from thousands of contestants with help from fans who vote, and she later appeared on the Girls Gone Wild magazine’s cover, according to a press release about the contest. (She even got a shout-out from Mark Cuban, whose later-renamed HDNet broadcast the search: “Congratulations to Chelsea for being named The Hottest Girl in America.”)

WSJ.com: Bankruptcy Beat
(posted 10 hours 25 min ago)