Category Archives: Bankruptcy

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In a bankruptcy case, bankruptcy discharge means a judge has declared that youre no longer responsible for paying debts. Its a permanent action that affects some, but not all, types of debt.

Even though a discharge wipes out certain debts and can help get your finances in order, the bankruptcy remains on your credit report for seven or 10 years, depending on the kind of bankruptcy.

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A bankruptcy discharge permanently prevents a creditor from trying to collect discharged debts. A discharge can happen in four types of bankruptcy cases:

Bankruptcy discharge applies only to debts you accumulated before filing for bankruptcy.

According to the United States Department of Justice, its important to list all of your property and debts in bankruptcy documents. If you fail to mention a debt, a judge may not discharge it. Also, a judge might refuse to discharge a debt if, for instance, you hide property or falsify records.

A Chapter 7 bankruptcy filer typically gets an automatic discharge of eligible debts, such as credit card bills, unless legal challenges have been raised about a requested discharge. Meanwhile, debts included in a Chapter 13 bankruptcy can be discharged, but normally arent since this type of bankruptcy generally involves debt restructuring. Chapter 7 and Chapter 13 are the two most common types of bankruptcy.

In a Chapter 7 bankruptcy case, a discharge can take four to six months. In other bankruptcy cases, including Chapter 13, payments are often made over a three- to five-year period, so typically, a discharge takes around four years.

An array of debts can be discharged in a bankruptcy case. Some of these include:

Not all debts can be discharged in a bankruptcy case. Some of the debts exempt from discharge include:

A judge can deny a bankruptcy discharge for several reasons, such as:

You might be able to get federal and private student loan debt discharged if the bankruptcy court approves your request through whats known as an adversary proceeding. In this request, a Chapter 7 or Chapter 13 bankruptcy filer states that student loan debt repayment would cause financial hardship for them and their dependents.

Positive scenarios that might arise from a hardship filing include:

In 2021, the American Bar Association, a group for lawyers and law students, urged Congress to change the U.S. Bankruptcy Code to give borrowers the ability to discharge student loans without proving that repayment of the debt would impose an undue hardship on them or their dependents.

The proposed federal Fresh Start Through Bankruptcy Act of 2021 would make federal student loans eligible for discharge in a bankruptcy case 10 years after the first loan payment is due. Furthermore, the act would retain the current undue hardship discharge option for private student loans and for federal student loans that have been due for less than 10 years.

Student loan debt follows you to your grave. For years, I have supported allowing struggling borrowers to discharge their loans in bankruptcy as a last resort, said U.S. Sen. Dick Durbin, D-Illinois, a co-sponsor of the Fresh Start legislation, in a press release.

Debt collectors cant try to collect debts that have been discharged in a bankruptcy case. In addition, debt collectors arent permitted to attempt debt collection while a bankruptcy case is pending.

If you believe a creditor has violated the courts prohibition of contacting you about a discharged debt, consider asking an attorney about your legal options. If a creditor tries to collect on a discharged debt, a debtor can report this to the bankruptcy court and request that their case be reexamined. A judge can punish a creditor whos found to have violated the no-contact rule.

When it comes to bankruptcy, a discharge is a good thing. On the other hand, a dismissal may not be such a good thing.

A discharge in a bankruptcy case means all allowed debts have been forgiven. Meanwhile, a dismissal refers to your cases being booted by a bankruptcy court. Reasons that your case might be dismissed include failing to submit the proper paperwork, failing to provide requested documentation or show up for a court appearance, or seeking a type of bankruptcy that doesnt apply to you.

Both a bankruptcy filing and bankruptcy discharge can hurt your credit. Thats because the bankruptcy filing and discharged debts can stay on your credit report for seven or 10 years. However, a debt showing up on your credit report as discharged may be less harmful than an unpaid debt that lingers indefinitely on your credit report.

A Chapter 7 bankruptcy falls off your credit report after 10 years. For Chapter 13 bankruptcy, its seven years.

Keep in mind that a discharged debt might not appear on your credit report as being discharged. If you notice a discharged debt is incorrectly categorized on a credit report, notify the credit bureau that produced the report and ask that the error be corrected. Each year, you can obtain a free credit report from the three major credit bureaus (Equifax, Experian and TransUnion) through annualcreditreport.com.

Fortunately, if you handle your credit responsibly after completing the bankruptcy process, the impact of the bankruptcy on your credit score will fade over time. You may even see improvement in your credit score within 12 months of a bankruptcy cases being wrapped up.

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Bankruptcy Discharge: What Is It? Forbes Advisor - Forbes

Economists and professionals in the restructuring sector of business and real estate have been anticipating a distressed economy for the past 18 months. Thus far they have been wrong.

The public is just plain confused. Many people today dont trust their politicians, their news sources and, surprisingly, not even their health care providers and professionals. This lack of trust, coupled with the pandemic-driven mandated way in which many employees work remotely, has caused many people to reassess their lives and the location from which they are willing to provide their services.

Many employees holding mid-and upper-level jobs will opt to permanently work remotely and never return to the office. This shift in the way people will work in the future will have a profound effect on many aspects of our economy, including the ability of landlords to keep commercial spaces leased.

COVID-19, the Delta, Omicron variants and now the highly contagious BA.2 variant have caused millions of workers to be unavailable for work, either remotely or otherwise. This has created a serious supply and distribution chain disruption. This problem is caused in part by manufacturers not being able to supply component products due to worker disruptions in factories. Add to this supply shortage the fact that personnel disruption in the transportation and delivery of products caused by COVID (i.e., the shortage of truck drivers) and we can clearly see the full picture of the disruption in the supply chain.

The threat of a substantial new round of tariffs, embargoes and other economic sanctions based on the political climate creates further risks of the U.S. becoming a distressed economy. In addition, there is a looming threat of high inflation. On the positive side, until recently the stock market and overall economy were generally clicking along at a solid and positive pace. The stock market doesnt always accurately represent what is really going on in the economy, but recent market volatility may be a harbinger of troubled times ahead.

Will the accumulation of these factors ultimately cause the predicted distressed economy? No one knows for sure, but in analyzing the situation it may be instructive to look at the issues that have prevented the anticipated downturn.

Since the pandemic began, regulators have not been pressuring banks to take action with respect to defaulted loans. Historically, banks have been willing to kick the can down the road with respect to defaulted loans if they could do so without significantly impairing the accounting value of the loans with respect to the banks capital requirements. Regulators current attitudes have allowed the banks to do just this.

While the regulators laissez-faire attitude has had a definite positive short-term effect on the economy, at some point the regulators know that the effect of their actions will cause banks to have misleading financial statements.

It is not likely that regulators behaviors will change before the midterm elections later this year. At some point, however, they will have to stop allowing banks to avoid classifying loans. Otherwise, they risk allowing the banking system to continue to mispresent the value of its loan assets, with all the risks of that situation impacting the creditability and stability of the banking system.

It is my view that when the bank regulators change their position with respect to their treatment of defaulted loans, an anticipated tsunami of real estate foreclosures and bankruptcies will be upon us.

Interest rates have historically had a substantial impact on the economy, especially the real estate sector.

The Feds have kept interest rates at almost zero to support the economy. Now, however, the specter of high inflation will almost certainly bring an end to near-zero interest rates. Annual inflation during 2022 is projected to be close to 7%. The Fed has already announced its intention to fight inflation by raising interest rates as early as in March. The issue is not whether interest rates will rise. Rather, it is by how much and when.

Rising interest rates hurt individuals in many ways:

The re-emergence of COVID in the form of the current variants has all but destroyed the timetable for societys return to normalcy. There is no reliable way to predict the effect of this re-emergence on the psyche of the country. It is predictable, however, that this re-emergence will negatively impact the economy, and will further delay a return to normalcy.

In fact, it is likely that normalcy, as it existed pre-pandemic, will never fully return. Trends like the shift of consumers primarily conducting their shopping online will have a negative effect on brick-and-mortar retail sales. The need for retail space seems poised to continue to decline even more than it has already. This problem has been accelerated by the pandemic.

Owners of shopping centers and commercial buildings are girding for the rash of vacancies that are most assuredly on the horizon. Individuals would be well advised to assume inflation and higher interest rates are on the near horizon and should act in any way possible to mitigate the harm to them from the looming dual threat. It is uncertain how federal, state, and local governments will react to the situation.

Uncertainty is the enemy of business, and it is clear we are facing uncertain, unpredictable times. The publics general perception of all of this is yet to be seen. There is much distrust by the people of our nation. These factors will combine to create a perfect storm for companies and real estate investors to experience increasingly distressed financial times.

The best advice we can offer is for entities to deal with their distressed assets early on.

The general public will be looking at inflation and rising interest rates and will react accordingly. The earlier people and businesses accept and respond to these changes, and react appropriately, the more likely it is that Chapter 11 bankruptcies can be avoided. This not only increases the chances that companies can resolve their financial issues without resorting to bankruptcy, it often reduces the need for employee layoffs.

Founder and President, Distressed Capital Resources LLP

William N. Lobel is the Founder and President of Distressed Capital Resources LLC, a company that has brought together virtually every resource available to assist borrowers with financially distressed real estate or businesses, with the goal of maximizing a borrower's leverage and options in order to successfully resolve that borrower's financial issues.

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A Wave of Bankruptcies and Foreclosures Appears to be Building - Kiplinger's Personal Finance

Huachen Energy Co., Ltd., one of the largest privately-owned power generating companies in the Peoples Republic of China (PRC), has announced that following a substantive hearing of the bankruptcy administrators application, the US Bankruptcy Court granted recognition of Huachens PRC reorganization plan under chapter 15 of the US Bankruptcy Code, together with other ancillary relief sought by the administrator. The Bankruptcy Court entered an Order Recognizing Foreign Proceeding and Granting Related Relief, and as a result, the reorganization plan in respect of the company (including the releases set out in the plan), as well as the order of the No. 1 Intermediate Peoples Court of Beijing approving the plan, are now recognized and given full force and effect in the United States and are binding and fully enforceable in accordance with their terms.

Latham & Watkins advised Huachen Energy Co., Ltd. on the successful restructuring of its New York law-governed US$500 million senior notes, through a PRC bankruptcy reorganization proceeding, coupled with a consent solicitation exercise, and the first-ever chapter 15 recognition of a PRC reorganization plan in the US. At the end of the hearing, the Honorable Judge Beckerman remarked that she was happy to see another PRC case as there are not so many of them. The company will now proceed with remaining steps for implementing the restructuring of the notes, which upon completion will result in the noteholders receiving a restructured note that remains tradable via the clearing systems and the Singapore Exchange, rather than just a (heavily discounted) cash payout.

Latham represented Huachen Energy Co., Ltd. with a cross-border deal team led by Hong Kong partner Howard Lam, with Hong Kong counsel Tingfei Fan, and associates Flora Innes and Kevin Chow. The US team advising on the chapter 15 application was led by Chicago/New York partner Caroline Reckler, with associates Jeramy Webb and Jon Weichselbaum.

Link:

Latham & Watkins Advises Huachen Energy on Innovative Bond Restructuring and the First-Ever US Chapter 15 Recognition of a PRC Bankruptcy...

PUNE One of the reasons for the creation of the Pune Mahanagar Parivahan Mahamandal Limited (PMPML), formed by merging the PMT and PCMT transport bodies in 2007, was to make a single public transport body financially efficient and operable.

However, 15 years since inception and PMPMLs losses are growing every year, with Pune and Pimpri-Chinchwad municipal corporations pouring in the money.

The operational losses for PMPML due to what many call wrong policies, have reached 220 crore in 2020-2021, from 152 crore five years ago.

The Covid pandemic has further hit the financial status of the PMPML amid falling passenger footfall during and post lockdowns.

According to Prakash Dhore, PMPML director, the PMPML is dominated by its administration, who are not answerable to elected representatives.

Earlier, it was better as elected members used to raise questions in the general body. Now they (PMPML admin) are not answerable for anything. I staged an agitation in front of the PMPML administration recently, but to no avail.

Officials said passenger footfall has gone down by 50 per cent and the organisation is trying to cope with providing new bus routes and facilities to passengers to cover their debts.

To reduce the expenses, the transport body has cut down its daily fleet of buses from 1,500 to 1,300. There has been drop in the daily passenger ridership from the earlier 850,000 to 600,000 and also revenue has gone down from Rs1.5 crore to a current Rs1 crore.

According to PMP Pravasi Manchs president Jugal Rathi, by introducing AC buses and long-distance services, the transport body is intentionally taking suicidal steps. No one is willing to reform the organisation even if it is citys lifeline. It is accepted that public transport will never be profitable, but administration is taking decisions that are causing mounting losses which will take the transport body down forever.

PMPML was formed in October 2007 and became a single entity for public transport with an IAS officer being nominated as chairman and managing director. The intention of registering the PMPML under the Company Act was to bring professionalism and keep it away from political interferance.

Activists, however, said it was decided that for first few years PMC and PCMC would support the company and later it would not need any help from either corporation. Now the condition of the PMPML is critical.

Civic activist Vivek Velenkar said, IAS officers tried to improve the transport body, but all political parties are united to not bring a good officer to the PMPML, while those heading the body have a mindset of considering it a side posting.

According to Velankar, PMPMLs decision to run the long-distance bus service in adjoining villages is a wrong policy.

According to officials, in December 2021 daily income wasRs1.5 crore, which then came down to 1 crore in January. Average daily income was around 1.3 crore, pre Covid.

Once school and colleges start with full operations, and Covid cases go down then only the transport body will gain some financial profit, said an official on condition of anonymity.

Bharatiya Janata Partys Ujwal Keskar said, I am the only elected member who objected to the forming of the separate company.Now the results are in front of people. I have demanded in the past many times to dissolve the body and bring this company under the umbrella of PMC general body.

According to NCP leader Vishal Tambe who was former standing committee chairman, the PMPMLs operational losses are huge and one day they will reach Rs1,000 crore. The PMC budget is Rs6,000 crore, when it is getting Rs4,000 as revenue. PMC also needs to pay salaries and for other development works. If the losses continues, it is beyond the capacity of the PMC to offer any financial help to PMPML.

Tambe also criticised the PMPML policy to run long- distance bus service. It is a wrong policy to run the long-distance buses. PMPML buses are going to Lonavla, Daund and everywhere in the district. Why should the tax payers from PMC bear these additional costs?

Aam Aadmi Partys state co-ordinator Vijay Kumbhar said, It is a misconception that once an IAS officer gets appointed, the working atmosphere will improve. It is proved that IAS officers cannot make changes in the PMPMLs functioning. Now government should appoint an expert in that field as chairman.

PMPML losses

2015-16 - Rs152 crore

2016-17 - Rs210 crore

2017-18 - Rs91.96 crore

2019-20 - Rs189 crore

2020-21 - Rs220 crore

Read the rest here:

How PMPML drove on the long route to bankruptcy - Hindustan Times

PROTESTOR BLAKE WORTHY IS SLAMMED TO THE GROUND BY A CAPITOL POLICE OFFICER

The Moral Bankruptcy of a Violent StateProtesting Prison Expansion& Documenting a Police Beating at the Arkansas State Capitol (including video).

THIS WAS MY FIRST TRIP TO THE ARKANSAS STATE CAPITOL.

Full video of the rally is here:

https://fb.watch/baUb0jA4KT/

The full of the beating is here (skip to middle):

https://fb.watch/bauTSeS7Ic/

Today was an exhausting day. With that said, I wanted to quickly put out a blog with everything that I have. Links to the full video of the rally and the beating are above and below. We undoubtedly live in a police stateArkansas.

These are the initial words from the press release I sent out for UNITED AGAINST CAGES.

On Feb 10th, Governor Hutchinson announced support for an expansion of 500 new cages to the Calico Rock North Central Unit. This budgetary expense is projected to cost close to $100 million. Surely, budgets indicate what we value. Rather than propping up problematic systems of incarceration, shouldnt we be spending such money on efforts that build and foster community? Imagineaffordable housingpre-k expansionpretrial diversion programsmental health facilitiestuition-free community collegeand on and on and on. The possibility of community is why were UNITED AGAINST CAGES!!!

UNITED AGAINST CAGES

11AM / MONDAY, FEBRUARY 14, 2022

ARKANSAS STATE CAPITOL STEPS

On Monday, February 14th, members of decARcerate, Arkansas Justice Reform Coalition and concerned citizens will gather on the Capitol Steps to voice their opposition to a recently proposed prison expansion.

These are the words that I delivered at the rally, UNITED AGAINST CAGES.

The Moral Bankruptcy of a Violent State

Got it. Thank you. Thank you. Well, good morning. Ive lived here for six months, six months, six months. We got here in August.

You know what? When we pulled up. And I started hearing people talk about more prisons, more cages, a lot of the racism, a lot of the other things you experienced almost packed up and turned around to find it. Yeah, thats true. But ultimately, I have a firm belief that God calls us to spaces of differencedifficult spaces.

Thank God calls us to spaces that are tough. And this is a tough space. This is a tough spot. Thats excuse me. A tough fight for just a second. I want to get everybody involved. We talking about a hundred million dollars. I want you to think about what you could do with a hundred million dollars.

Hold on, hold on. Im coming around. All right. One at a time. Hit me with it: social workers, peer support specialists, substance abuse treatment. adequate food, adequate housing, mental health support, free healthcare for everyone, job training. A hundred million dollars could go a long way couldnt it

Well, you know, we got a lot of Christians, Arkansas, a lot of people that say that Christians in Arkansas, including the. Well, you have heard all of these examples of ways to love your neighbor as yourself, as opposed to locking up your neighbor.

You know, sometimes I worry that our governor left his Bible at home because when you talk about loving your neighbor as yourself, youre talking about providing resources to your neighbor. Youre talking about providing education for your neighbor. Youre talking about providing mental health services for your neighbor. Youre talking about healthcare for your neighbor, but no, our governor seems to think that the best way to love your neighbor. Is instead of helping people instead of educating people, instead of providing a quality of life for people, you get ready to lock them up, what does it say about a society that builds prisons instead of schools? What does it say about a society that builds cells instead of mental health clinics? Ill tell you what it saysThat the society is morally bankrupt.

We are here to create a moral society. It begins today.

Lastly, I got a phone call last night from a member of the news media. The asked me a question I get asked often about these rallies, Will there be any violence at this rally? Everybody is always scared of violence. Immediately I responded, isnt Governor Hutchinsons proposal already violent? Hes the one talking about locking criminals up that dont even exist yet. Its the bullies/the establishment who always want there to be no violence. Well let me make something very clear I am a man of peace. But I am also a man of common sense. You cant keep on putting your heel on the throat of marginalized and oppressed populations and not expect them to respond. So, if you dont want violenceit would be wise to listen to their cries.

Amen. Amen. and Amen.

Full video of the rally is here:

https://fb.watch/baUb0jA4KT/

These are quotes that I gave during interviews after the rally.

Ultimately the question is why? I mean couldnt we use that money to build up communities, couldnt we use that money for education, pre-k, mental health clinics, Hood said.

Hood said when the state uses huge funds that go to prisons, they are taking away other opportunities to grow the community.

When you spend 100 million dollars on new prisons, you are taking 100 million dollars away from our seniors, our kids, and all kinds of spaces and places and communities that need it, he said.

Wouldnt it be amazing for every child in the state to have the opportunity to get a good start, instead of what the governor is suggesting giving them a good finish, he said.

No one should have to exercise their rights under such duress. Unequivocally, Arkansas is a police state. -Rev. Dr. Jeff Hood

I was kicked out of the gallery for refusing to stand for the pledge.

I entered the gallery of the Arkansas State Senate. During the national anthem, I remained seated (I pledge to no one but God). Immediately, I was kicked out of the gallery. When I protested that my first amendment rights were being violated, I was told that I could not return to the gallery. Furthermore, the guy screamed at me and said that I wasnt a real minister. I filed a complaintand then proceeded to Gov. Hutchinsons State of the State address.

During the address

Members of our group interrupted the State of the State address to protest Gov. Hutchinsons 100 million dollar prison plan.

Then the violence began.

We were all forced down the stairs and out the door. Tensions were undoubtedly high. When we arrived at a tunnel (under the capitol stairs)where there were seemingly no camerasthe police rushed us and began to beat protestors. Eventually, we were locked out of the capitol behind an iron gate.

Last press release of the day.

On Monday, February 14th, members of decARcerate, Arkansas Justice Reform Coalition and concerned citizens gathered on the Capitol Steps to voice their opposition to Gov. Hutchinsons recently proposed prison expansion. Later on, nonviolent protesters interrupted Gov. Hutchinsons State of the State address and were removed from the Capitol. Upon forcing the nonviolent protesters into the tunnel, officers (state troopers and capitol police) proceeded to escalate the situation by rushing and brutalizing protestors in a covered tunnel under the capitol steps. The incident led to numerous injuries and two arrests.

The full of the beating is here (skip to middle):

https://fb.watch/bauTSeS7Ic/

THIS WAS MY FIRST TRIP TO THE ARKANSAS STATE CAPITOL.

Here is the original post:

The Moral Bankruptcy of a Violent StateProtesting Prison Expansion & Documenting Police Beatings at the Arkansas State Capitol (INCLUDING VIDEO)....

Procedure

Chapter 15 of the United States Bankruptcy Code was enacted in 2005 and represents the United States adoption of the Model Law on Cross-Border Insolvency so as to provide effective mechanisms for dealing with the cases of cross-border insolvency. 11 U.S.C. 1501. Section 1501 sets out five objectives: (1) to promote cooperation between U.S. courts and parties in interest and courts and other competent authorities of foreign countries involved in cross-border insolvency cases; (2) to establish greater legal certainty for trade and investment; (3) to provide for the fair and efficient administration of cross-border insolvencies that protect the interest of all creditors and other interested entities, including the debtor; (4) to afford protection and maximization of the value of the debtors assets; and (5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment.

Comity is a principle objective of chapter 15 and is found in sections 1507 (in determining whether to provide additional assistance, the court shall consider whether such additional assistance, consistent with the principles of comity ) and 1509 ([a] request for comity or cooperation by a foreign representative .). Yet, section 1506 is an exception to the concept of comity, if the action would be manifestly contrary to the public policy of the United States. Section 1525 of the Bankruptcy Code encourages U.S. Bankruptcy Courts to communicate directly with, and inquire of, the foreign court in order effectuate the objectives of section 1501 of the Bankruptcy Code. This section may also be read as an effort at providing comity to the rulings of a foreign court.

A case ancillary to a pending insolvency proceeding in a foreign country is commenced by a foreign representative under chapter 15. The foreign representative has the right of direct access to United States courts for the purpose of filing a petition for recognition of a foreign proceeding. 11 U.S.C. 1504 and 1509. Typically, the petition for recognition will be accompanied by either (1) a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative or (2) a certificate from the foreign court affirming the existence of the foreign proceeding and the appointment of the foreign representative, translated into English if necessary. 11 U.S.C. 1515.

For chapter 15 to apply, the entity must qualify as a debtor under section 109(b) of the Bankruptcy Code. 11 U.S.C. 1501(c)(1). Generally, a foreign corporation must have a place of business or property in the United States, but minimal property, like a retainer in a law firms trust account has be considered sufficient property in the United States to qualify for Chapter 15. See In re Octaviar Administration Pty Ltd., 511 B.R. 361, 372-74 (Bankr. S.D.N.Y. 2014) (holding that $10,000 in a client trust account was sufficient to satisfy requirements of 109(a) of the Bankruptcy Code); In re Suntech Power Holdings Co. Ltd., 520 B.R. 399, 413 (Bankr. S.D.N.Y.) (Nov. 17, 2014). In addition, the foreign proceeding in which the debtor is involved must qualify as a foreign proceeding as defined in section 101(23) of the Bankruptcy Code. The term foreign proceeding means a collective judicial or administrative proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation. 11 U.S.C. 101(23).

After meeting the foregoing, the foreign representative must then show that the foreign proceeding is either a main or non-main proceeding. Section 1502(4) provides that a foreign main proceeding is a foreign proceeding pending in the country where the debtor has the center of its main interests [COMI]. Section 1516 provides the rebuttable presumption that the location of the debtors registered office (or the debtors habitual residence, if the debtor is an individual) is the center of its main interests. This presumption applies, however, only in the absence of evidence to the contrary. Also, 11 U.S.C. 1502(5) defines a foreign non-main proceeding as a foreign proceeding pending in a country where the debtor has an establishment. Establishment, in turn, is defined in 1502(2) as any place of operations where the debtor carries out nontransitory economic activity.

The determination of whether a foreign proceeding is main or non-main dictates the extent to which relief may be available to the foreign representative. 11 U.S.C. 1520 provides certain automatic protections upon recognition of a foreign main proceeding. After recognition of a foreign proceeding as a non-main proceeding, all relief that the bankruptcy court may grant is discretionary. Such relief may be granted upon a showing that it is necessary to effectuate the purpose of this chapter and to protect the assets of the debtor or the interest of creditors.... 11 U.S.C. 1521. If the foreign proceeding is neither main nor non-main, then the foreign proceeding may not be recognized.

After notice and a hearing, the court is authorized to enter an order recognizing the foreign proceeding as either a foreign main proceeding or a foreign non-main proceeding. 11 U.S.C. 1517. Upon recognition, the automatic stay and various other provisions of the Bankruptcy Code automatically apply as to the debtors assets within the United States with respect to a foreign main proceeding, and may be applied by the bankruptcy court with respect to a foreign non-main proceeding. 11 U.S.C. 1520 and 1521. The foregoing discussion will relate to the situation where there has been recognition that the proceeding is a foreign main proceeding.

Even after a bankruptcy court enters an order of recognition, the order may be revisited based on a change of status. 11 U.S.C. 1518. In fact, the foreign representative has a duty to the bankruptcy court to report such a change of status, including the termination of the foreign proceeding.

Section 1520 of the Bankruptcy Code relates to the effects of recognition of a foreign main proceeding. This section provides that upon recognition of a foreign main proceeding, 361 and 362 of the Bankruptcy Code, which deal with adequate protection and the automatic stay, apply with respect to the foreign debtor and the property of that debtor that is within the territorial jurisdiction of the United States. 11 U.S.C. 1520 (a)(1). Sections 363, 549 and 552 of the Bankruptcy Code apply to a transfer of an interest of the foreign debtor in property that is within the territorial jurisdiction of the United Sates to the same extent that sections would apply to property of the estate in a United States. bankruptcy case. 11 U.S.C. 1520 (a)(2). The foreign representative in a foreign main proceeding may also operate the debtors business and may exercise the rights and powers of a trustee under and to the extent provided in 363 and 552 of the Bankruptcy Code unless ordered otherwise by the bankruptcy court. 11 U.S.C. 1520 (a)(3). Finally, 552 of the Bankruptcy Code, which addresses the effect of a security interest in property of a debtor after the filing of a bankruptcy case, applies in a foreign main proceeding to property of a foreign debtor that is within the territorial jurisdiction of the United States. 11 U.S.C. 1520 (a)(4).

In addition to these provisions available to a foreign representative under 1520 of the Bankruptcy Code, the foreign representative in a foreign main proceeding may also apply for appropriate relief under 1521 or seek additional assistance under 1507 of the Bankruptcy Code. Carved out of the additional relief provided under 1521(a)(7), is the relief available under sections 522, 544, 545, 547, 548, 550, and 724(a). These bankruptcy code provisions include most of the statutory bases to seek claw back claims such as preferential and fraudulent transfer claims. Instead, a foreign representative is left pursuing avoidance actions under the law applicable to the foreign estate, also known as a Condor Action. See Fogerty v. Condor Guar. Inc. (In re Condor Ins. Ltd.), Adv. No. 07-05049 ERG, 2008 WL 2858943 (Bankr. S.D. Miss. July 17, 2008).

In certain instances, the foreign representative seeks to recover assets within the territorial jurisdiction of the United States, which may often include pursuit of causes of action or collection of evidence against United States based parties. Once the case is recognized, the Bankruptcy Rules provide that other matters should be presented to the court by motion and are treated as contested matters in which certain rules relevant to adversary proceedings apply. See Fed. R. Bankr. P. 9014.

Upon recognition of either a main or non-main proceeding, a bankruptcy court is empowered to permit a foreign representative to collect evidence. Section 1521(a)(4) provides:

(a) Upon recognition of a foreign proceeding, whether main or nonmain, where necessary to effectuate the purpose of this chapter and to protect the assets of the debtor or the interests of the creditors, the court may at the request of the foreign representative, grant any appropriate relief, including

* * *

(4) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtors assets, affairs, rights, obligations or liabilities;

And this section along with sections 1521(a)(7) (providing the basis for the bankruptcy court to grant additional relief that may be available to a [bankruptcy] trustee) and 1507(a) (authorizing the bankruptcy court, on recognition, to "provide additional assistance to a foreign representative), generally make available to a foreign representative Rule 2004 and the subpoena power under Federal Rule of Civil Procedure 45 incorporated by Federal Rule of Bankruptcy Procedure 9016 as discovery devices. But a foreign representatives entitlement to discovery in a Chapter 15 case is not unfettered.

In In re Petroforte Brasileiro de Petroleo Ltda., 542 B.R. 899 (Bankr. S.D. Fla. 2015), one of Brazils largest gas and ethanol distributors before entering bankruptcy, the Southern District of Florida Bankruptcy Court, which had recognized the foreign main proceeding, analyzed the scope of a foreign representatives discovery rights. Certain of the discovery targets objected on two main grounds: first, they argued that the Chapter 15 court should refuse to recognize the Brazilian extension order, which had extended the Brazilian bankruptcy case to the putative transferees, on public policy grounds; and second, they argued that the foreign representative could not use Chapter 15 to obtain discovery against the transferees because they were not debtors. The United States bankruptcy court rejected the first argument, noting that U.S. courts grant a similar type of relief under the equitable remedy of substantive consolidation, and thus the Brazilian extension order was not substantively offensive as a matter of public policy. As to the scope of discovery assistance under Chapter 15, the court had to interpret the scope of debtor under section 1521(a)(4), which provides that a court may authorize the the examination of witnesses, the taking of evidence or the delivery of information concerning the debtors assets, affairs, rights, obligations or liabilities. The court held that the entities that were subject to the Brazilian extension order were debtors subject to section 1521s discovery powers. As to third parties who were not subject to the Brazilian extension order, the bankruptcy court in Petroforte held the trustee may be entitled to broad discovery to the extent the debtor is a majority stockholder in the non-debtor discovery target. Such broad discovery allows the Trustee to determine whether the stock, which is an asset of the estate, has sufficient value to induce the Trustee to take control of the entity, and attempt to derive value by selling or liquidating the entity. Also see Petroforte for a discussion regarding the limitations imposed in the foreign representative seeking a seal and gag order in respect to third-party discovery.

In In re SAM Industrias, S.A., 2019 WL 1012790 (Bankr. S.D. Fla. March 1, 2019), the Southern District of Florida Bankruptcy Court held that as to the non-debtor corporate entities, the foreign representative was entitled to broad discovery not only as to those entities in which the debtor had a majority interest but also in those entities found to have participated in the debtors asset concealment scheme. Again, in defining the scope of relief available to the foreign representative, the Chapter 15 court examined the findings of the Brazilian courts. The Brazilian courts had found that the debtor had concealed assets through certain corporate pass-through entities owned and controlled by the debtor. The foreign representative was thus entitled to discovery related to these corporate pass-throughs. The foreign representative, though, was not entitled to discovery related to the non-debtor entities whose connections to the debtor had not yet been established in the Brazilian courts. Accordingly, the court concluded that the foreign representative is not entitled to carte-blanche in his inquiries of non-debtors, but that he is entitled to obtain information narrowly tailored to discover the legal entities created in purely fictional form which are part of a complex corporate structure obscuring the debtors ownership of corporate assets.

As reflected above, once a foreign representative obtains a recognition order in a United States Bankruptcy Court, the Chapter 15 case provides a fulsome platform to engage in discovery relating to the debtors assets here as well as a potent avenue to investigate potential causes of action. But such discovery tools are not without limits. And importantly, because the recognition process is typically a unilateral affair without contest, if a client becomes subject of such discovery or the target of investigation, one needs to review the propriety of the recognition order itself and its continuing efficacy.

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Cross-Border Bankruptcy Cases: Chapter 15 of the Bankruptcy Code and Parameters of a Discovery Tool - JD Supra

The Ninth Circuit Bankruptcy Appellate Panel (BAP) recently held that merely freezing a debtors bank account holding funds that had been garnished by a judgment creditor did not violate the automatic stay. This decision was based on the United States Supreme Courts ruling last year in City of Chicago v. Fulton, holding that retention of repossessed vehicles that were possessed before a bankruptcy was filed did not violate the automatic stay.

In In re Stuart, a judgment creditor garnished funds held in the judgment debtors bank account. The bank froze the account, and before any other action took place in the state court, the debtor filed a chapter 13 bankruptcy case. The creditor promptly took action to stay the state court garnishment proceedings after the bankruptcy filing. The debtor argued that the automatic stay required the creditor and bank to release the garnished funds, and that the failure to do so was a violation of the automatic stay. The debtor filed a motion for sanctions against the creditor, requesting damages for physical and psychological distress, punitive damages, and attorney fees.

Most institutional creditors are aware of the automatic stay, which, true to its name, immediately goes into effect upon the filing of a bankruptcy petition, and which protects debtors from creditor actions to collect debts or take possession of the debtors property. Prior law indicated that a creditor had an affirmative duty to return a debtors funds that were garnished pre-petition. However, in a logical extension of the Supreme Courts ruling in Fulton, the BAP ruled that a judgment creditor, and the bank, holding funds that had been garnished before the bankruptcy was filed, did not violate the automatic stay by holding the funds until a determination could be made regarding the disposition of the funds. Merely preserving the status quo does not violate the automatic stay.

This ruling is a welcome development for both creditors and financial institutions, protecting them against claims for violation of the automatic stay, which could expose them to damages and sanctions. Once a creditor becomes aware that a bankruptcy has been filed, it should of course immediately cease any affirmative acts to collect pre-bankruptcy debts. However, under the holding of this case, maintaining the status quo will not be deemed a violation of the automatic stay.

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Bankruptcy Court Protects Creditors And Banks Holding Garnished Funds - Lexology

The cause of Argentine Mail She is one of those who has the former president in her sights Mauricio Macri and all his family. The company had already been declared bankrupt, however the Macri appealed the decision of the prosecutor Gabriela Boquin, who asks that the appeal be rejected and that the bankruptcy process continue. now it will be the Economic Criminal Chamber She will be the one to make the final decision.

As detailed in C5Nthe debt of the cause of Argentine Mail dates back more than 20 years. However, from the Macri family they would have proposed to pay 1,000 million, which would be five times less than what is owed. Now the prosecutor Gabriela Boqun requested that the bankruptcy of the company, given that he remarked that it is unappealable.

In turn, from the National government last year an attempt was made to extend the cause to other companies of the Macri family such as Socma Y American Sideco. It was the attorney for the treasure of the nationCarlos Zannini. there from the opposition they went to the intersection, one of them was Grace Ocana who said that Kirchnerism always throws the ball out and blames others.

From the ruling party they hope that the Macri family group will take over the debt that the company has with the Argentine state. However, the national deputy had said that it is evident that there is a persecution of sectors of Kirchnerism towards Macri. In addition, the legislator targeted Zannini, who wants to harm the Macri family by involving all companies in the Mail issue.

Now it should be Economic Criminal Chamber the one that resolves the course of the cause. The magistrates must decide if the request for appeal by the former president or if they confirm the bankruptcy Correo Argentino as requested by the prosecutor. The debt in 2001 amounted to 296 millions of pesos, given that he had to pay a tax every year and only did it during the first.

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They ask to decree the bankruptcy of Correo Argentino: the decision will fall on the Economic Criminal Chamber - Then24.com

David James will be back on screens this week as he appears on Richard Osman's House of Games.

The former England goalkeeper will appear alongside Olympic champion Denise Lewis and comedians Isy Suttie and Rhys James as he competes in a series of trivia-based games across the week.

David, 51, might be best known for his footballing career, but since retiring from the sport he's gone down a rather different path.

READ MORE:Richard Osman's House of Games: Steve Backshall's famous wife is a two-time Olympic champion

The House of Games star is a keen artist, and since leaving the pitch he has taken to painting regularly, auctioning off several of his creations for charity.

He also put his artistic talents to good use by illustrating his friend Steve Pearson's popular children's book, Harry's Magic Pockets: The Circus, in 2008.

David is also no stranger to the world of television, having appeared on game shows including Celebrity Mastermind and Pointless Celebrities in recent months.

He also appeared in the seventeenth series of BBC's Strictly Come Dancing in 2019, becoming the fourth celebrity to be eliminated with professional partner Nadiya Bychkova.

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In terms of his personal life, David was previously married to Tanya James, with the couple welcoming four children together.

Following their split, the former Liverpool goalkeeper fell upon harder times, and it was widely reported that the costs incurred in their 2005 divorce contributed to his bankruptcy nine years later.

After being declared bankrupt in May 2014, David was forced to sell off hundreds of items of football memorabilia he collected over the years in order to pay off the debts, including 150 signed shirts, shorts and match balls.

Richard Osman's House of Games airs weekdays at 6pm on BBC2 and BBC iPlayer

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Richard Osman's House of Games: David James' life from bankruptcy to unusual second career - Birmingham Live

Archbishop Michael Byrnes announces the archdiocese's filing of Chapter 11 bankruptcy in light of the number of clergy sex abuse cases facing the church.

Lawyers in the bankruptcy case for the Archdiocese of Agaa will determine whether letters recounting the churchs acquisitions could be used as evidence if witnesses are able to testify at trial.

The Dulce Nombre de Maria Cathedral Basilica in Hagta.

A motion filed by the Official Committee of Unsecured Creditors to exclude the letters from trial was argued at the District Court of Guam Friday.

The creditors argued the letters to Archbishop Michael J. Byrnes include hearsay because they are personal accounts about the archdioceses property.

The community statements are about individual feelings and intentions, said creditors attorney Andrew Glasnovich.

Glasnovich added the contents could not be an exception to the hearsay rule, which requires more reliability.

The archdiocese, however, said the letters include histories of acquisitions.

They would appear to have some inherent reliability and that they are simply relating to the date and a piece of property, said Ford Elsaesser, who used a letter discussing the history of a piece of land in Sumai-Santa Rita being used by the church.

After arguments were made, the creditors primary concern came down to the letters not being accompanied by witnesses who could testify to them at trial. A letter standing alone, they argued, would be considered hearsay.

Chief Judge Frances Tydingco-Gatewood, to resolve the issue, asked attorneys to confer as to whether they could get the writers of the letters to testify.

In 2019, a complaint filed by the Official Committee of Unsecured Creditors said the Archbishop of Agaa did not Catholic schools and parishes as owned property when filing for bankruptcy.

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Lawyers to discuss whether letters to archbishop will be included in bankruptcy trial - Guam Pacific Daily News