All items from Bankruptcy Law Community Blogs

Everyone gathered last week at the meeting convened by
Detroit Emergency Manager Kevyn Orr knew that the news would be
dire. Nonetheless, Orr's
report on Detroit's financial condition and his proposal for the treatment of
the city's creditors
- an offer of approximately ten cents on the dollar
for the city's unsecured bonds - still managed to drop jaws. Therein lies what
is perhaps the city's best hope



Posted 42 weeks 4 days ago

WASHINGTON, D.C. - (Mealey's) The U.S.
Supreme Court on June 24 denied a bid for certiorari by Pfizer Inc. of a
ruling removing the protection for Pfizer of a bankruptcy injunction barring
asbestos personal injury claims entered in the case of a defunct Pfizer
subsidiary (Pfizer Inc. v. Law Offices of Peter G. Angelos, No. 12-300,
U.S. Sup.; See January 2013, Page 13) (lexis.com
subscribers may access Supreme Court briefs for this case)
.



Posted 42 weeks 4 days ago

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on
June 24 granted certiorari in a case dealing with the questions of
whether Article III of the U.S. Constitution permits the exercise of the
judicial power of the United States by bankruptcy courts on the basis of
litigant consent and whether a bankruptcy court may submit proposed findings of
fact and conclusions of law for de novo review by a district court in a
"core" proceeding under 28 U.S. Code Section 157(b) (Executive Benefits
Insurance Agency v. Arkinson, No. 12-1200, U.S. Sup.) (lexis.com
subscribers may



Posted 42 weeks 4 days ago

Determined not to hold a securities brokerage firm liable
for fraudulent transfers in a Ponzi scheme case, the Fourth Circuit recently
pushed the boundaries of fraudulent transfer law to affirm the lower court's
dismissal of the trustee's claims against it. Grayson Consulting, Inc. v. Wachovia Securities, LLC (In re Derivium Capital LLC), 2013 U.S.
App. LEXIS 10529 (4th Cir. May 24, 2013) [an enhanced version of this opinion is available to lexis.com
subscribers
].
Although several aspects of the decision



Posted 43 weeks 2 days ago

More than six years after his $300 million Ponzi scheme
collapsed, victims of former boy band mogul Lou Pearlman's scheme are
set to receive
an initial payout of just four cents on the dollar. In a
distribution plan (the "Plan") filed by the bankruptcy trustee
appointed to recover funds for Pearlman's victims, an investor with an allowed
claim of $100,000 would be entitled to $4,000, with the chance that future
distributions could eventually add to this total. Pearlman, who was



Posted 43 weeks 3 days ago

In an unusual move, the Supreme Court granted cert
yesterday to consider the petition of a California man who filed a pro se
petition for cert seeking to review the decision of a bankruptcy court to
surcharge his homestead exemption under section 105. No. 12-5196, Law v.
Siegel. The petition for cert and other documents can be found here
courtesy of scotusblog.com.
The case involves a debtor who filed bankruptcy on
January 5, 2004 and claimed that his homestead was subject to two liens which
consumed all of its nonexempt value. The



Posted 43 weeks 4 days ago

Last Friday, Florida Governor Rick Scott signed HB 95.
This bill amends § 726.109 of the Florida Statutes by adding this broad defense
to a claim to avoid a charitable contribution as a fraudulent transfer:
"The transfer of a charitable contribution that is received
in good faith by a qualified religious or charitable entity or organization is
not a fraudulent transfer[.]"
However, this broad protection for charitable
contributions has several limits:

  • The defense only
    applies to a constructive fraudulent transfer claim.
  • A contribution by
    a natural person within 2 years before a bankruptcy or the filing of



Posted 43 weeks 4 days ago

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on
June 17 granted certiorari in a case involving the question of whether a
bankruptcy court has the power to levy a financial charge against a Chapter 7
debtor's residential property, which he has claimed falls under the homestead
exemption, despite the suggestion of the U.S. solicitor general that the high
court deny hearing the case (Stephen
Law v. Alfred Siegel, No.
12-5196, U.S. Sup.) (lexis.com subscribers may



Posted 43 weeks 5 days ago

Normally a trustee or investors sue the banks for funds
lost in a Ponzi scheme. Banks are accused of negligently not monitoring their accounts
for fraud or, worse yet, for aiding and abetting the Ponzi scheme perpetrator's
fraud. Federal regulators like the SEC and CFTC go after the bad guys and are
not generally in the business of suing the banks who held the money.
In the Peregrine Financial Group, Inc. fraudulent scheme
- generally believed to be a Ponzi scheme if not just one massive embezzlement
- the CFTC has just sued U.S. Bank for its role in the fraudulent scheme
perpetrated by Russell Wasendorf, Sr., and Peregrine. Based in



Posted 44 weeks 3 days ago

Law360, Chicago (June 11, 2013, 1:41 PM ET) -- The U.S.
Department of Justice's bankruptcy watchdog arm on Tuesday released its
long-awaited new framework for scrutinizing attorneys' fees in large Chapter 11
cases, hoping to boost transparency and keep bankruptcy lawyers from charging
above-market rates.

The new guidelines - scheduled to go into effect Nov. 1 - explain how U.S.
trustees will review and, if necessary, object to fee applications. They apply
to cases involving $50 million or more in both assets and liabilities,
excluding single asset real estate cases, according to a statement from the
U.S. Trustee Program.



Posted 44 weeks 3 days ago