For franchisees, weathering a franchisor bankruptcy filing requires preparation, including obtaining a working knowledge of the particular issues raised in such a filing. To learn more, click on the link below to an article recently published by the online news site Hotel News Now: https://www.hotelnewsnow.com/Article/Index/13595
Preparing for a Franchisor Bankruptcy Filing
5th Circuit Bankruptcy Summary: Baker v. Cage (In re Whitley), No. 12-41125 (5th Cir. Dec. 16, 2013).
James Whitley was a serial bankruptcy filer and all around bad guy. He is currently serving a life sentence for sexually harassing a minor. About a month prior to that conviction, his latest Chapter 13 bankruptcy case had been dismissed with prejudice. On the same day as his criminal conviction, Whitley transferred two pieces of […]
5th Circuit Bankruptcy Summary: Clovis Prince v. Michele H. Chow, Chapter 7 Trustee (In re Clovis Prince), No. 13-40130 (5th Cir. Dec. 12, 2013)
Prior to filing Chapter 7 bankruptcy, the debtor transferred assets to a trust. The debtor was the trustee of the trust. After the filing, the Chapter 7 Trustee sued the debtor (in his capacity as trustee of the trust) seeking to recover the funds as a fraudulent transfer. The Chapter 7 Trustee won and the […]
5th Circuit Bankruptcy Summary: In re BP RE, L.P., 2013 WL 5975030
Right on the heels of the Frazin case, the Fifth Circuit has entered another opinion discussing Stern and whether parties can consent to the authority of the bankruptcy court to enter a final judgment. The case is In re BP RE, L.P., 2013 WL 5975030 (Nov. 11, 2013). The case involved BP RE, L.P. (“BPRE”) which filed Chapter 11 in […]
Defending Preferential Transfers: The Ordinary Business Terms Defense- Part VI: Successful Use of the Ordinary Business Terms Defense
Despite these rather instructive failures, there have been a number of cases in which creditors have successfully prevailed using the ordinary business terms defense. For example, in the In re Global Tissue case, the debtor and a supplier were in the same industry, and the supplier successfully asserted an ordinary business terms defense by producing […]
Bankruptcies Bring Acquisition Opportunities
A bankruptcy filing may be an opportunity for the acquisition opportunities of individual assets, or an entire going concern business. To learn more, click on the link below to an article published recently by the online news site Hotel News Now: https://www.hotelnewsnow.com/Article/13409/Bankruptcies-bring-acquisition-opportunities
Defending Preferential Transfers: The Ordinary Business Terms Defense- Part V: Failures Using the Ordinary Business Terms Defense
Like all other defenses, the defendant/transferee must provide evidence establishing the elements of the ordinary business terms defense. Much can be learned from the many seeming half-hearted attempts to prove an ordinary business terms defense. For example, the lack of competence of witnesses (whether expert or non-expert) and failure to identify the relevant industry or […]
5th Circuit Summary: Smith v. Gartley (In re Berman-Smith), No. 13-50154
The detailed facts of this case aren’t particularly relevant. The issue was whether the district court has jurisdiction to hear an appeal filed after the 14 day period in Rule 8002. The Fifth Circuit has not had an opportunity to address this issue since the 2007 Supreme Court case Bowles v. Russell, 551 U.S. 205 […]
Defending Preferential Transfers: The Ordinary Business Terms Defense- Part IV: Proving up the Ordinary Business Terms Defense
Once a debtor or trustee establishes a transfer is a preferential transfer, the burden falls upon the creditor to establish one or more of the defenses to avoidance set forth in Bankruptcy Code section 547(c), such as the “ordinary business terms” defense set forth in Bankruptcy Code section 547(c)(2)(B). Defining the Relevant Industry Recent case […]
Defending Preferential Transfers: The Ordinary Business Terms Defense- Part III: How Courts Apply Today’s Ordinary Business Terms Defense
Now that the ordinary business terms defense stands on its own as an independent defense, courts are compelled to focus specifically on whether the ordinary business terms test has been satisfied. As before, the burden is on the creditor to establish the ordinary business terms defense, using essentially the same four factors as the subjective […]