Another Bankruptcy Court Weighs in on Postpetition Interest

PBWT

2] In this case, unsecured creditors argued that they were “impaired” because the plan did not require the debtor to pay postpetition interest at the contractual rate or a higher state law judgment rate. [3]

Sixth Circuit Rules that Monthly 401(k) Contributions can be Excluded from “Projected Disposable Income” Under a Chapter 13 Plan

Foster Swift

A Chapter 13 bankruptcy plan requires a debtor to satisfy unsecured debts by paying all “projected disposable income” to unsecured creditors over a five-year period.

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Failed Private School was owed £51k in Unpaid School Fees

UK debt collections

The church run Ockbrook School owed creditors more than £2 million pounds when it was forced to closes its doors due to financial issues this summer. The School has over 140 creditors listed and administrators have warned they may never get what they are owed.

Section 1126 of the Bankruptcy Code and the Dangers of Sleeping on Your Rights as a Creditor

PBWT

This is especially true if you’re a creditor in a chapter 11 case. Two mortgage companies held more than $800,000 in secured claims, and 33 creditors had unsecured claims totaling about $1.1 Just seven unsecured creditors voted on the plan, all in favor.

Putting Personal Money Into A Limited Company: What You Should Know

Hudson Weir

When businesses do enter liquidation, by putting personal money into a limited company, if director’s loan accounts are in credit, then the directors count as creditors. Be aware though, that they are classed as unsecured creditors.

What Are Debentures? Everything You Need To Know

Hudson Weir

In the case of insolvency or liquidation, a floating charge would give the lender priority over unsecured creditors in the order of repayment. Preferential creditors are next, including employees owed arrears of wages and holiday pay.

Chapter 13 Bankruptcy and Student Loans

Sawin & Shea

This stay prohibits creditors, including your student loan lenders, from contacting you to collect any debts. Reduces payment amounts: Amounts paid to your student loans and other unsecured creditors will often be significantly lower through a Chapter 13 bankruptcy.

The Final Say: Conversion from Chapter 11 to Chapter 7 is Not a Given

PBWT

Unsecured Creditors Committee et al. , Bankruptcy Court for the District of New Mexico confirmed a plan that had been proposed by the unsecured creditors' committee.

Recent Decision on Derivative Standing by a Creditors’ Committee to Challenge a Lender’s Liens

PBWT

In many chapter 11 cases, creditors’ committees can play a vital role in maximizing the recoveries of unsecured creditors. But the powers of creditors’ committees are circumscribed by both the Bankruptcy Code and case law.

Cutting through the insolvency paperwork jargon – A guest blog by Menzies LLP

CICM

In this week’s guest blog, the Menzies LLP Creditor Services team highlight the areas you should be looking for on receipt of insolvency paperwork and, most importantly, whether there will be a dividend. The priority of payments in a company insolvency determines where creditors rank in terms of likely return. Below is a non-exhaustive list of priority: Secured creditors – with a fixed charge. Secondary preferential creditors – some HMRC arrears. Unsecured creditors.

The Return of the Crown Preference – A blog by Menzies

CICM

The Enterprise Act 2002 came along, and we saw this abolished and replaced with the Prescribed Part – a pot of money ring fenced for the unsecured creditors. This was a redistribution of the wealth as it meant HMRC’s debt became ‘unsecured’ like everyone else, but they still got a return from floating charge assets. At the same time, it was seen as fairer because all the other unsecured creditors also received a slice. A long, long time ago….

As Chapter 11 Bankruptcy Filings Surge, Here’s What Creditors Need to Know to Protect and Enforce Their Rights

Fraser

Creditors of a bankrupt company must be aware of the various deadlines and procedures that govern the chapter 11 process in order to protect and enforce their rights. For creditors to maximize their recoveries, they must stay informed and take action during a bankruptcy proceeding.

What Should I Know About Personal Bankruptcy and COVID-19?

Rocket Lawyer

Nonexempt property owned – A Chapter 13 bankruptcy requires that your unsecured creditors are paid at least as much as if you had filed Chapter 7. Unsecured creditors would have, under Chapter 7, been entitled to your nonexempt property value.

What You Should Know About Personal Bankruptcy Laws and COVID-19

Rocket Lawyer

Nonexempt property owned – A Chapter 13 bankruptcy required that your unsecured creditors are paid at least as much as they would have been paid if you had filed Chapter 7. Unsecured creditors would have, under Chapter 7, been entitled to your nonexempt property value.

HMRC facing £65bn Debt Collection challenge

UK debt collections

The position is further complicated as from 1 December 2020 HMRC is now treated as a preferential creditor in any insolvency , meaning it is entitled to be paid ahead of unsecured creditors and floating charge lenders.

What Are Preference Shares During Insolvency?

Hudson Weir

The next steps for an insolvent company working with an IP could include entering into administration, a company voluntary arrangement (CVA) or a creditors’ voluntary liquidation (CVL). The first priority is to repay all secured creditors, unsecured creditors and preferential creditors.

Critical Vendors Aren’t Immune from Lawsuits to Recover Preferential Transfers

PBWT

Accordingly, critical vendors often recover more on their pre-petition claims than other unsecured creditors. In other words, critical vendors could receive a full recovery, while other creditors only receive a fraction of what they are owed.

Can I Put My Property in My Spouse’s Name and File for Bankruptcy?

Sawin & Shea

In most cases, a judge will reverse the transfer, especially if it is apparent that it was done to evade creditors. If the property is taken, the trustee responsible for selling the property to pay your creditors will pay your spouse the value of their interest in the property.

Can I Put My Property in My Spouse’s Name and File for Bankruptcy?

Sawin & Shea

In most cases, a judge will reverse the transfer, especially if it is apparent that it was done to evade creditors. If the property is taken, the trustee responsible for selling the property to pay your creditors will pay your spouse the value of their interest in the property.

Losing Momentum:  Houston Bankruptcy Court Holds that Make-Whole Claims are Not the Economic Equivalent of Unmatured Interest Subject to Disallowance; Solvent-Debtor Exception Lives

PBWT

2] The Fifth Circuit also instructed Judge Isgur to determine whether the creditors were entitled to post-petition interest at the contractual default rates under the “solvent-debtor” exception. [3]

Equitable Mootness on the Ropes

PBWT

It argued that the plan unfairly discriminates among the same class of shareholders, violates the absolute priority rule, was proposed in bad faith, is not in the best interests of the creditors, and is not feasible. Of the $12 million paid under the Plan to creditors [.

A Primer On Administrative Expense Claims From An Oil And Gas Bankruptcy Case

PBWT

Some of Whistlers’ creditors also filed an involuntary chapter 11 petition against Whistler. The claim drew objections from Whistler, one of its secured creditors, and the unsecured creditors’ committee.

Court Dismisses Bankruptcy Case to Enable Debtor to Seek a Paycheck Protection Loan

PBWT

The debtor’s motion to dismiss drew creditor opposition. With respect to the DIP loan, the debtor noted that as an unsecured creditor, RT was in the same position as if the debtor had a secured loan outside of bankruptcy.

All in a Day’s Work. Belk Achieves Confirmation of Pre-Packaged Plan in Record Time

PBWT

” [1] Critically, the plan leaves all unsecured creditors unimpaired. We posit a few of those here: Broad Creditor Support. Leaving trade creditors unimpaired, while not legally required, is an essential pragmatic consideration.

Floating Charges And Fixed Charges: Understanding The Differences

Hudson Weir

Insolvency proceedings follow a set pattern, determining the order in which creditors are reimbursed. Creditors holding fixed and floating charges are defined as “secured lenders”. Due to the nature of your business, or its current status, an unsecured option may be more appropriate.

Pre Pack Administration: What It Involves And How To Do It

Hudson Weir

In some cases, a company voluntary arrangement (CVA) or creditors’ voluntary liquidation (CVL) may be a better option. For a pre pack administration to take place, the procedure must be in the best interests of the company and its creditors. This preserves funds for the creditors.

What Is An Insolvent Estate? All You Need To Know

Hudson Weir

In addition to the personal representative, an insolvency administration order can be sought by a creditor, a liquidator, a temporary administrator or the supervisor of an individual voluntary arrangement that the deceased person was subject to.

Car Payments and Car Repossession

Sawin & Shea

During your Chapter 13 bankruptcy, unsecured creditors are forced to take payments in only the amount the law says you can afford or have to pay. Are you behind on car payments? Is a car repossession looming in your future? Now’s the time to act.

Fox News:  New Mexico Bankruptcy Court Reaffirms Committee Eligibility for Derivative Standing Despite Contrary Tenth Circuit B.A.P. Precedent

PBWT

In an important affirmation of the rights and duties of a creditors’ committee, Bankruptcy Judge David T. a creditor that recovers, after the court’s approval, for the benefit of the estate any property transferred or concealed by the debtor.”

Dealing With Debt From COVID-19

Debt Free Colorado

Below you’ll find some strategies for working with your creditors and deciding which bills are the most important if you can’t pay them all. Reach out to your creditors. How do I pay my Bills if I’m out of Work due to a Stay-At-Home Order?

Second Circuit Clarifies Standard for Judicial Admissions

ABI

of Unsecured Creditors of Color Tile, Inc. By: Lianna Murphy. John’s University School of Law. American Bankruptcy Institute Law Review Staff Member. . A judicial admission “is a statement made by a party or its counsel” regarding a fact that is binding on the admitting party throughout the case. [1] 1] In Pillars v.

Rough Justice: Third Circuit Issues Important Decision on Unfair Discrimination

PBWT

In the alternative, they argued that the relative recoveries of senior and subordinated creditors resulted in “unfair discrimination” prohibited by the Code. [2] “Unfair discrimination is rough justice.

The Long Road Ahead? Puerto Rico Oversight Board Files Proposed Plan To Restructure The Commonwealth’s Debt And Other Claims

BN Lawyers

Additionally, hundreds of adversary proceedings have been filed, or will be, by various Trustees and Committees charged with pursuing the return of potentially billions of dollars to the Commonwealth for the benefit of creditors.

Luxurious Lifestyles Can Undermine the Good Faith Requirement for ?Proposed Chapter 11 Plans of Reorganization

ABI

4] Debtor’s initial proposed plan was rejected by the judgment creditors because it paid them less than twenty percent on the outstanding debts. The second plan proposed paying those creditors in full over two decades. Although the creditors voted to accept the second proposed plan, the bankruptcy court refused to confirm the plan because it concluded that the plan was not feasible and it unfairly discriminated against other creditors. By: Spencer Nelson.

How Businesses Use Corporate Debt Restructuring for Liquidity

admin

Debts can quickly cripple a business, and negotiating more favorable terms with creditors is usually the best way out. Many businesses are both debtors and creditors. Creditors can cut their losses, and everyone can come to an agreement on how to move forward with a deal that benefits everyone involved. Debt restructuring is a mechanism where a business’s creditors restore liquidity by reorganizing financial obligations. Secured Creditors. Unsecured Creditors.