Category Archives: Bankruptcy

Joshua Zegen, managing principal and co-founder, Madison Realty Group (Photo provided by Rosewood Realty Group/Frank Galasso, iStock)

Six years ago, Madison Realty Capital moved to foreclose on a two-building apartment property in Williamsburg. Owners Chaim Miller and Sam Sprei resisted. The two sides have been at war ever since.

Now the end is in sight, and it doesnt look good for the two landlords.

The 15-unit property at 203-205 North Eighth Street has been scheduled for a bankruptcy auction Dec. 9. The property was valued at $12.9 million last year, according to a court filing by Madison Realty, which held a loan against it.

The conflict began in 2015 when Madison Realty alleged the owners failed to make a monthly payment on a $3 million loan. A short time later, Madison declared the balance due immediately and started the foreclosure process. That October, Madison and the landlords entered into a stipulation of forbearance.

But Madison alleged the borrowers violated the terms of the forbearance. In 2017, a judge allowed the lender to proceed with a foreclosure.

But Miller and Sprei still had cards to play. The property owners filed nine orders to show cause, pushing the matter back another three years until a foreclosure sale was scheduled.

Then, in February 2020, before the sale could happen, the debtors filed for Chapter 11 bankruptcy, halting the foreclosure. That process lasted until a judge approved the restructuring plan in September.

Greg Corbin, the president of bankruptcy and restructuring at Rosewood Realty Group, is spearheading the auction.

The sale signals the demise of Millers real estate empire. At one point, the Brooklyn landlord had amassed over 1 million square feet and sought to buy the Beekman Tower in Manhattan. Madison Realty was his go-to lender. But his projects became marred in lawsuits, foreclosures and partnership disputes.

Madison Capital, led by Zegen, Brian Shatz and Adam Tantleff, is among the most active lenders in New York Citys commercial real estate market, and known to play hardball. The company recently secured a judges approval to go forward with a UCC foreclosure on interests in Eli Karps Hello Living project in East Flatbush.

A spokesperson for Madison Capital declined to comment. A lawyer for Miller and Sprei did not return a request for comment.

Contact Keith Larsen

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Six-year fight to end with Williamsburg bankruptcy sale - The Real Deal

A milestone in the agency's transformation saga, which could see its new owners opt to acquire other technology players, and target mid-size customers, as part of its post-pandemic rehabilitation.

Matthew Parsons

Corporate travel agency CWT exited bankruptcy on Friday, at the same time pledging to heavily invest in technology a highly strategic move from its CEO and new paymasters as its rivals start to consolidate.

The court in Dallas, Texas, swiftly approved CWTs recapitalization plan, just one day after it filed for Chapter 11 protection in fact.

Hear from Michelle McKinney Frymire, the CWT of CEO, at Skift Aviation Forum on November 17

The net result is that the agency has now eliminated about half its $1.6 billion debt, while it gains $350 million of new equity capital to support strategic initiatives. There are also new owners, in the form of investors who now control the firm after the departure of the Carlson family.

The company also pledged to invest $100 million in its myCWT travel management platform.

This will include expanding CWTs breadth and depth of omni-channel content, travel comparison capabilities, analytical reporting, and choice and availability of sustainable travel solutions to further enhance the point-of-sale experience for travelers and carbon footprint details to enable better-informed decision-making, the company said in a statement.

Earmarking $100 million this way wasnt a court stipulation, a CWT spokesperson told Skift ,as it had planned to invest in this area all along. The strengthened balance sheet allows us now to proceed, they said.

CWTs exit from bankruptcy comes just days after its main competitor completed the takeover of Expedias tech-focused corporate travel division.

This announcement may be triggered by American Express Global Business Travels acquisition of Egencia and the increasing aggression of TripActions after its latest funding round, said Gaurav Sundaram, president of ProKonsul Consulting. Investment in technology is the only way agencies can increase revenues in the current environment.

There may also be public relations at play but for some the spin lacks details.

Theyre hoping the $100 million investment is a good story to tell, but many people will be looking for a lot more information, said one consultant, who preferred to withhold their name. Are they catching up because theyve fallen behind? Is it a big enough play to modernize their platform to the point where they can talk about it no longer being a legacy player?

CWTs investors have a lot of ground to catch up with travel investor Certarestoo, they added, which has bolstered Amex GBTs position as well as other related companies during the pandemic.

Meanwhile, Amex GBT has been targeting smaller companies with new products, such as its Neo1 platform. In fact, small and medium-sized businesses are being tipped as key drivers of the post-pandemic recovery. Will CWT now evolve its myCWT platform to cater to the mid-market business? If it does, will it choose to invest, acquire or even partner with another company to diversify?

You can imagine a TripActions, TravelPerk or Spotnana being quite attractive to the new CWT, to quickly power that growth in the mid-market, the consultant added.

One technology expert said that all corporate travel agencies were now facing challenges to turn themselves from travel companies into technology companies. This is a complex transition, more than just a financial investment, and it requires deep cultural and philosophical changes, said Dan Raine, CEO of Unlocked Data.

This choice is fundamental to the success of the business, particularly under heavy pressure from clients and investors. It is difficult to change strategy and turn your back on the thousands of developer days invested in building existing software, but as technology advances relentlessly, it can be faster and more efficient in the long-run to bite the bullet and change course and start again with a different approach and architecture.

Hear from Michelle McKinney Frymire, the CWT of CEO, at Skift Aviation Forum on November 17

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CWT Emerges From Bankruptcy With $100 Million to Invest in Business Travel Tech - Skift

Antoine Walker, former professional NBA player

Shareif Ziyadat | Getty Images

In 2008, at the end of his 13-year basketball career, Antoine Walker had amassed $108 million.

Two years later, he had nothing.

"I came into the league at 19 years old," he said. "I came from humble beginnings, so I was not used to having money at all."

When he started making money, he didn't understand the concept of a dollar, he said. He also picked up some aggressive spending habits spending on cars, clothes and jewelry as well as helping family and friends. The rest of his money was lost in real estate investing when the market tanked after the Great Recession.

That led him to declare bankruptcy in 2010. Two and a half years later, he had bounced back.

Today, he helps others avoid the money issues he's overcome. He's a consultant with Edyoucore, a financial literacy company that focuses on teaching athletes how to manage their money.

There are a few things people should keep in mind before filing for bankruptcy. The timing of when to file if it makes sense to do so is important.

"If you are faced with the loss of either your home, your car or garnishment, any of those events is an emergency and it could make sense to file for bankruptcy immediately," said Sarah Bolling Mancini, an attorney for the National Consumer Law Center.

Beyond an emergency, it may make sense to file if you have an overwhelming amount of debt that you won't be able to repay and that it's peaked meaning that you're not still incurring more debt.

Generally, in this case it makes sense to already be working your way out of debt.

"If you don't see your financial situation improving after bankruptcy it's not a good time to file," said Robert Lawless, a professor at the University of Illinois College of Law. "Bankruptcy won't put money in your pocket, it forgives past debts."

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Before filing for bankruptcy, people need to be aware that there are two different types for consumers chapter 7 and chapter 13.

Walker was able to file for Chapter 7 bankruptcy, he said, which is also referred to as a liquidation or straight bankruptcy.

In this process, all unsecured debt think personal loans, credit cards and some medical expenses is wiped away, but a court will take possession of your assets such as property. A court-appointed trustee will handle your case and may sell some of your assets to cover your debts.

In chapter 13 bankruptcy, you generally get to keep ownership of your assets and get a more affordable payment plan from your creditors. However, you must fit certain requirements you need to have enough income to afford your monthly payments, and your debt must be under a certain amount.

The limits for chapter 13 bankruptcy in 2020 were nearly $420,000 in unsecured debt and roughly $1.25 million in secured debt.

Because everyone's situation is different, it makes sense to work with a bankruptcy lawyer to determine the best course.

Walker puts it this way. "You are the CEO of your company," he said. "You have to take responsibility of what you do, and you have to be on top of it."

This means surrounding yourself with professionals that can help you be successful.

"You need to have a CPA, financial advisor, agent, lawyer these need to be separate but work together," he said.

Regardless of what kind of bankruptcy you choose, the process takes a few years before you're off the hook. Then, you must begin to rebuild your finances.

An important part is having a workable budget and sticking to it, according to Lawless. In addition, after bankruptcy people should be cautious about taking on more debt while it's important to rebuild credit, it should be done carefully.

"There are types of credit you can get, and the key thing is to not immediately take the offers," said Mancini. "It's important to be cautious and take things on slowly and carefully."

For Walker, rebuilding also meant accepting that his life might look different than it did when he was in the NBA.

"I may never again make $108 million but I can have a comfortable lifestyle," he said. "That's been my mindset as I got back on my feet."

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NBA star Antoine Walker bounced back from bankruptcy in two years. Here's his advice for rebuilding finances - CNBC

When Michael (not his real name) was between 17- and 19-years-old, he was allegedly repeatedly raped by a pair of uniformed, on-duty Louisville, Ky., policemen, including in their police car. Michael was with the policemen because he was a member of a Boy Scout troop sponsored by the Louisville Police Department. The Louisville police would sometimes take Scout troop members like Michael with them on ride-alongs outside of formal Scouting events, and that is when the rapes allegedly occurred.

The police officers involved were convicted of various lesser sex crimes against Michael and others. The city of Louisville, however, was poised to escape liability for the criminal actions of its on-duty officers, without going to trial or even paying a single cent of its own money, simply because the Boy Scouts of America filed for bankruptcy in February 2020. All of the claims involving seven lawsuits filed against the Boy Scouts and the city were resolved through a settlement reached Oct. 29, according to a release from the Louisville-Jefferson County Metro Government. Under the settlement, Louisville itself will not pay anything; only its insurers will.

Meanwhile, an estimated 40,000 other sex abuse defendants that sponsored Scout troops. All of them are attempting to piggyback on the Boy Scouts bankruptcy to evade their own liabilityfrom 1976 forwardfor the sexual abuse of Scouts, without paying a penny of their own money or having to face a jury. This is wrong.

The basic idea of bankruptcy is that an insolvent company surrenders its assets, which are used to pay creditors in an orderly fashion under court supervision. Abuse survivors are creditors, even if their cases against the Boy Scouts have not been resolved. To the extent that creditors are not paid, the debts are discharged, meaning they are no longer collectible.

The bankruptcy discharge is supposed to be available only for parties that file for bankruptcy. Yet the Boy Scouts are proposing a settlement through their bankruptcy plan that would give independent, well-heeled, sex abuse defendants, including municipalities, community organizations, schools, and churches, the benefits of a bankruptcy discharge, without having to go through the bankruptcy process that would make their assets available to compensate abuse survivors.

Under the plan proposed by the Boy Scouts, all of its troop sponsorsentirely independent non-bankrupt entitieswill receive releases for their sex abuse liability. The releases even go so far as to erase any liability for abuse that occurred while the children were in the custody of outside organizations, as in the case of Michael.

In exchange for the releases, the troop sponsors will have to sign over their right to insurance coverage under shared policies paid for by the Boy Scouts to a trust to compensate survivorsbut thats all. The troop sponsors will not themselves pay anything for their releases, even though individual abuse claimants will get less than 25 cents on the dollar on their claimsand in many cases far lessunder the Boy Scouts plan.

Critically, bankruptcy law is clear that if the plan is approved by the bankruptcy court, it will bind all creditors, including abuse survivors, even if they object.

The releases of non-debtors under the Boy Scouts appalling bankruptcy plan is hardly unique. While bankruptcy courts would not historically approve releases of non-debtors, that has changed, and now wealthy tort defendants now regularly piggyback on others bankruptcy cases.

This is how the billionaire Sackler family sloughed off its opioid liability in the Purdue Pharma bankruptcy. Its how Catholic parishes shielded their assets in diocesan sex abuse bankruptcies. Its how the U.S. Olympic Committee is hoping to use USA Gymnastics bankruptcy to limit its liability for Larry Nassers sexual abuse of Olympic gymnasts. And its how Johnson & Johnson, one of the worlds richest companies, is seeking to evade its liability for toxic talc products in the bankruptcy of one of its subsidiaries.

Mass tort cases are always difficult, but their resolution does not require running roughshod over victims right to hold accountable those with responsibility for their harms. The Boy Scouts, for example, are perfectly able to continue their mission without the court extinguishing the liability of myriad non-debtor troop sponsors.

The troop sponsors own liability for abuse would certainly remain an issue, but that would be the problem of individual troop sponsors, and theres a solution readily at hand for them if they are truly insolvent: they can file for bankruptcy themselves and make all of their assets available for their creditors.

Allowing deep-pocketed troop sponsors to evade liability for decades of sexual abuse of boys and young men by riding the coattails of the Boy Scouts bankruptcy is a misuse of the bankruptcy system and should not be allowed.

The Boy Scouts of America have asked the court to approve a $1.6 billion trust fund to settle the more than 80,000 sexual abuse claims. The court will hold a hearing on the proposal in late January.

The benefits of bankruptcy relief should be available only for those individuals and businesses that actually file for bankruptcy. Its an abuse of the bankruptcy system for well-heeled defendants to get releases from their own liability by free-riding on the bankruptcies of other entities. The House Judiciary Committee Nov. 3 approved the Nondebtor Release Prohibition Act, a bill that would end this abuse of the bankruptcy system. Its time for Congress to pass this legislation and ensure that bankruptcy relief is available for honest but unfortunate debtors and not for free-riders who would grift the process.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Adam J. Levitin is the Anne Fleming Research Professor and Professor of Law at Georgetown University Law Center. He serves as a consultant to certain talc claimants against Johnson & Johnson and has testified before the House Judiciary Committee on non-debtor releases in bankruptcy.

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The Boy Scouts Are Abusing the Bankruptcy System - Bloomberg Law

Courts disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state law. There have been a handful of court rulings addressing this issue in recent years, with mixed outcomes. The U.S. Bankruptcy Court for the District of New Jersey weighed in on this controversial issue in In re 3P Hightstown, LLC, 631 B.R. 205 (Bankr. D.N.J. 2021). The court dismissed a chapter 11 case filed by a Delaware limited liability company ("LLC") because the LLC agreement precluded a bankruptcy filing without the consent of a holder of preferred membership interests whose capital contributions had not been repaid. According to the court, the bankruptcy blocking provision was not void as a matter of public policy because, under both Delaware law and the express terms of the LLC agreement, the holder of the preferred membership interests, which held a noncontrolling position, had no fiduciary duties.

Bankruptcy Risk Management by Lenders

Astute lenders are always looking for ways to minimize risk exposure, protect remedies, and maximize recoveries in connection with a loan, especially with respect to borrowers that have the potential to become financially distressed. Some of these efforts have been directed toward minimizing the likelihood of a borrower's bankruptcy filing by making the borrower "bankruptcy remote," such as by implementing a "blocking director" organizational structure or issuing "golden shares" that, as the term is used in a bankruptcy context, give the holder the right to preempt a bankruptcy filing. Depending on the jurisdiction involved and the particular circumstances, including the terms of the relevant documents, these mechanisms may or may not be enforceable.

As a rule, corporate formalities and applicable state law must be satisfied in commencing a bankruptcy case. See In re NNN 123 N. Wacker, LLC, 510 B.R. 854 (Bankr. N.D. Ill. 2014) (citing Price v. Gurney, 324 U.S. 100 (1945)); In re Comscape Telecommunications, Inc., 423 B.R. 816 (Bankr. S.D. Ohio 2010); In re Gen-Air Plumbing & Remodeling, Inc., 208 B.R. 426 (Bankr. N.D. Ill. 1997). As a result, while contractual provisions that prohibit a bankruptcy filing may be unenforceable as a matter of public policy, other measures designed to preclude a debtor from filing for bankruptcy may be available.

Lenders, investors, and other parties seeking to prevent or limit the possibility of a bankruptcy filing have attempted to sidestep the public policy invalidating contractual waivers of a debtor's right to file for bankruptcy protection by eroding or eliminating the debtor's authority to file for bankruptcy under its governing organizational documents. See, e.g., In re DB Capital Holdings, LLC, 2010 WL 4925811 (B.A.P. 10th Cir. Dec. 6, 2010); NNN 123 N. Wacker, 510 B.R. at 862; In re Houston Regional Sports Network, LP, 505 B.R. 468 (Bankr. S.D. Tex. 2014); In re Quad-C Funding LLC, 496 B.R. 135 (Bankr. S.D.N.Y. 2013); In re FKF Madison Park Group Owner, LLC, 2011 WL 350306 (Bankr. D. Del. Jan. 31, 2011); In re Global Ship Sys. LLC, 391 B.R. 193 (Bankr. S.D. Ga. 2007); In re Kingston Square Associates, 214 B.R. 713 (Bankr. S.D.N.Y. 1997).

These types of provisions have not always been enforced, particularly where the organizational documents include an outright prohibition of any bankruptcy filing. See In re Lexington Hospitality Group, 577 B.R. 676 (Bankr. E.D. Ky. 2017) (where an LLC debtor's operating agreement provided for a lender representative to be a 50% member of the debtor until the loan was repaid and included various restrictions on the debtor's ability to file for bankruptcy while the loan was outstanding, the bankruptcy filing restrictions acted as an absolute bar to a bankruptcy filing, which is void as against public policy); In re Bay Club Partners-472, LLC, 2014 WL 1796688 (Bankr. D. Or. May 6, 2014) (refusing to enforce a restrictive covenant in a debtor LLC's operating agreement prohibiting a bankruptcy filing and stating that the covenant "is no less the maneuver of an 'astute creditor' to preclude [the LLC] from availing itself of the protections of the Bankruptcy Code prepetition, and it is unenforceable as such, as a matter of public policy").

Many of these efforts have been directed toward "bankruptcy remote" special purpose entities (sometimes referred to as special purpose vehicles) ("SPEs"). An SPE is an entity created in connection with a financing or securitization transaction structured to ring-fence the SPE's assets from creditors other than secured creditors or investors (e.g., trust certificate holders) that provide financing or capital to the SPE.

For example, in In re Gen. Growth Props., Inc., 409 B.R. 43 (Bankr. S.D.N.Y. 2009), the court denied a motion by secured lenders to dismiss voluntary chapter 11 filings by several SPE subsidiaries of a real estate investment trust. The lenders argued, among other things, that the loan agreements with the SPEs provided that an SPE could not file for bankruptcy without the approval of an independent director nominated by the lenders. The lenders also argued that, because the SPEs had no business need to file for bankruptcy and because the trust exercised its right to replace the independent directors less than 30 days before the bankruptcy filings, the SPE's chapter 11 filings had not been undertaken in good faith.

The General Growth court ruled that it was not bad faith to replace the SPEs' independent directors with new independent directors days before the bankruptcy filings because the new directors had expertise in real estate, commercial mortgage-backed securities, and bankruptcy matters. The court determined that, even though the SPEs had strong cash flows, bankruptcy remote structures, and no debt defaults, the chapter 11 filings had not been made in bad faith. The court found that it could consider the interests of the entire group of affiliated debtors as well as each individual debtor in assessing the legitimacy of the chapter 11 filings.

Among the potential flaws in the bankruptcy remote SPE structure brought to light by General Growth is the requirement under applicable Delaware law for independent directors to consider not only the interests of creditors, as mandated in the charter or other organizational documents, but also the interests of shareholders. Thus, an independent director or manager who simply votes to block a bankruptcy filing at the behest of a secured creditor without considering the impact on shareholders could be deemed to have violated his or her fiduciary duties of care and loyalty. See In re Lake Mich. Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr. N.D. Ill. 2016) (a "blocking" member provision in the membership agreement of a special purpose limited liability company was unenforceable because it did not require the member to comply with its fiduciary obligations under applicable non-bankruptcy law).

Courts disagree as to the enforceability of blocking provisions and, in particular, "golden shares" that, as the term is used in a bankruptcy context, give the shareholder the right to preempt a bankruptcy filing. For example, in Lexington Hospitality, the bankruptcy court denied a motion to dismiss a bankruptcy case filed by an entity wholly owned by a creditor that held a golden share/blocking provision because the court concluded that the entity was not truly independent. 577 B.R. at 68485. In addition, in In re Intervention Energy Holdings, LLC, 553 B.R. 258 (Bankr. D. Del. 2016), the court ruled that a provision in a limited liability company's governance document:

the sole purpose and effect of which is to place into the hands of a single, minority equity holder [by means of a "golden share"] the ultimate authority to eviscerate the right of that entity to seek federal bankruptcy relief, and the nature and substance of whose primary relationship with the debtor is that of creditornot equity holderand which owes no duty to anyone but itself in connection with an LLC's decision to seek federal bankruptcy relief, is tantamount to an absolute waiver of that right, and, even if arguably permitted by state law, is void as contrary to federal public policy.

Id. at 265; see also In re Tara Retail Group, LLC, 2017 WL 1788428 (Bankr. N.D. W. Va. May 4, 2017) (even though a creditor held a golden share or blocking provision, it ratified the debtor's bankruptcy filing by its silence), appeal dismissed, 2017 WL 2837015 (N.D. W. Va. June 30, 2017).

By contrast, in In re Squire Court Partners, 574 B.R. 701, 704 (E.D. Ark. 2017), the court ruled that, where a partnership agreement required the unanimous consent of the partners before the limited partnership could "file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy," the bankruptcy court properly dismissed a bankruptcy filing by the managing partner without the consent of the other partners.

One of the seminal cases addressing this issue is In re Franchise Services of North America, Inc., 891 F.3d 198 (5th Cir. 2018). In Franchise Services, as a condition to an investment by a majority preferred stockholder that was controlled by one of the debtor's creditors, the debtor amended its certificate of incorporation to provide that it could not "effect any Liquidation Event" (defined to include a bankruptcy filing) without the approval of the holders of a majority of both its preferred and common stock. The U.S. Court of Appeals for the Fifth Circuit ruled that "[t]here is no prohibition in federal bankruptcy law against granting a preferred shareholder the right to prevent a voluntary bankruptcy filing just because the shareholder also happens to be [controlled by] an unsecured creditor." Id. at 208. The Fifth Circuit rejected the argument that, even if a shareholder-creditor can hold a bankruptcy veto right, such a right "remains void in the absence of a concomitant fiduciary duty." No statute or binding case law, the court explained, "licenses this court to ignore corporate foundational documents, deprive a bona fide shareholder of its voting rights, and reallocate corporate authority to file for bankruptcy just because the shareholder also happens to be an unsecured creditor." Id. at 209.

Other notable cases include In re Insight Terminal Solutions, LLC, 2019 WL 4640773 (Bankr. W.D. Ky. Sept. 23, 2019), and In re Pace Industries, LLC, No. 20-10927 (MFW) (Bankr. D. Del. May 5, 2020).

In Insight, a lender, as a condition to extending the maturity date of a loan to a Delaware LLC, demanded that the borrower and its guarantor amend their operating agreements so that neither would be permitted to file for bankruptcy unless they first obtained the prior written consent of all holders of the membership units in the borrower that had been pledged to secure the loan. After defaulting on the loan, but before the lender could foreclose on the pledged membership units, the borrower and the guarantor again amended their operating agreements to remove the lender consent provision and filed for chapter 11 protection. The lender moved to dismiss. The bankruptcy court denied the motion, finding that the debtors had authority under Delaware law to file for bankruptcy in accordance with their amended operating agreements, and ruling that "attempts to limit the Debtors' access to the bankruptcy process were against public policy and invalid." Insight, 2019 WL 4640773, at *3.

In Pace, a Delaware corporation amended its certificate of incorporation in connection with a pre-bankruptcy debt-for-equity swap to provide that any voluntary bankruptcy filing by the company or its affiliates "shall require the written consent or affirmative vote of the holders of a majority in interest of the [new preferred stock], and any such action taken without such consent or vote shall be null and void ab initio, and of no force or effect." The company and certain affiliates later filed prepackaged chapter 11 cases, without the consent of a majority of the preferred stockholders, who moved to dismiss the bankruptcy filings as unauthorized. The stockholders acknowledged cases finding that shareholder bankruptcy consent rights violate public policy if exercised by a shareholder that is also a creditor holding a "golden share," but argued that they were preferred stockholders only, not creditors. They also argued that, consistent with Franchise Services, a minority shareholder (which they all were) is not a controlling shareholder with fiduciary duties.

Ruling from the bench, the bankruptcy court denied the motion to dismiss, holding as a matter of first impression that, on these facts, "a blocking right by a shareholder who is not a creditor is void as contrary to federal public policy that favors the constitutional right to file bankruptcy." Pace, No. 20-10927 (MFW) (Bankr. D. Del. May 6, 2020), Transcript of Telephonic Hearing at 38 [Doc. No. 147].

The Pace court "respectfully declined" to follow Franchise Services, noting that it saw "no reason to conclude that a minority shareholder has any more right to block a bankruptcythe constitutional right to file a bankruptcy by a corporationthan a creditor does." Id. at 40. Moreover, it explained, contrary to the Fifth Circuit's interpretation of Delaware law in Franchise Services, under Delaware law, "a blocking right, such as exercised in the circumstances of this case, would create a fiduciary duty on the part of the shareholder; a fiduciary duty that, with the debtor in the zone of insolvency, is owed not only to other shareholders, but also to all creditors." Id. at 41. Other factors combined with the blocking right, the court noted (i.e., the debtors were in the zone of insolvency, lacked liquidity, and could not pay their debts as they matured without debtor-in-possession financing, coupled with severe operational disruption due to the pandemic), supported a finding that the preferred shareholders' blocking right created a fiduciary duty.

3P Hightstown

In 2019, 3P Equity Capital Inc. ("3PEC"), an affiliate of Delaware LLC 3P Hightstown, LLC ("debtor"), borrowed $420,000 from Progress Direct LLC ("Progress"). The loan was secured by a minority membership interest held by 3PEC in a joint venture known as 3PRC, LLC. In September 2019, 3PEC assigned that membership interest, subject to Progress's lien, to the debtor.

In December 2019, the debtor raised $500,000 in new capital from an investor group ("4J Group") in exchange for preferred membership interests. The 4J Group also loaned the debtor $125,000 on a subordinated basis. In July 2020, Hightstown Enterprises, LLC ("HEL") paid $625,000 to acquire the 4J Group loan as well as its preferred membership interests in the debtor. In September 2020, Progress also sold its secured loan to HEL.

The LLC agreement between the debtor and its members included a provision limiting the ability of the debtor's management to take certain actions, including filing for bankruptcy:

Notwithstanding anything to the contrary contained in this Agreement, until such time as the Preferred Unreturned Capital Value has been reduced to zero, the Company shall not, and shall not permit any of the Company Subsidiaries to engage in or cause any of the following transactions or take any of the following actions, and the Board shall not permit or cause the Company or any of the Company Subsidiaries to engage in, take, or cause any such action, in each case except with the prior approval of the holders of a majority of the outstanding [preferred membership interests] voting separately as a class: (xi) the initiation by the Company or any Company Subsidiary of a bankruptcy proceeding (or consent to any involuntary bankruptcy proceeding).

The LLC agreement also included a "limitation of liability" provision stating as follows:

This Agreement is not intended to, and does not, create or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by Applicable Law, and in doing so, acknowledges and agrees that the duties and obligations of each Covered Person to each other and to the Company are only as expressly set forth in this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.

In April 2021, the debtor filed a chapter 11 petition in the District of New Jersey, where its joint venture real estate holdings were located. HEL moved to dismiss the case, arguing that the debtor lacked the authority to file for bankruptcy under the LLC agreement. The debtor countered that HEL lacked standing to seek dismissal of the case because the 4J Group's assignment of its loan and preferred membership interests in the debtor failed to comply with the LLC agreement's notice procedures. The debtor also argued that the LLC agreement provision restricting its ability to file for bankruptcy was invalid as a matter of public policy.

The Bankruptcy Court's Ruling

Initially, U.S. Bankruptcy Judge Michael B. Kaplan ruled that HEL's standing to seek dismissal was irrelevant because the court had the authority to dismiss a chapter 11 case "for cause" under section 1112(b) of the Bankruptcy Code on its own initiative.

Next, Judge Kaplan found that the plain language of the LLC agreement prohibited the bankruptcy filing because all preferred capital had not been returned to the preferred membership interest holders and those holders had not approved the chapter 11 filing. Regardless of whether the assignment to HEL was valid, he explained, under the circumstances, the consent of either HEL or its predecessor the 4J Group was required for the bankruptcy filing, yet the debtor obtained neither.

Judge Kaplan rejected the debtor's public policy argument. Other cases holding that such bankruptcy filing restrictions were unenforceable, he wrote, were factually distinguishable, "and the concerns articulated by courts that have stricken such contractual provisions are not present in this case." 3P Hightstown, 631 B.R. at 211.

Noting the absence of any Third Circuit precedent, Judge Kaplan looked to Franchise Services, Lexington Hospitality, Intervention Energy, and Pace for guidance. He found Franchise Services to be "strikingly analogous" because it also involved a motion to dismiss filed by an equity holder that was also a creditor (or controlled by one). Like the Fifth Circuit, Judge Kaplan concluded that the blocking provision in the LLC agreement was "not void merely due to [HEL's] (or the 4J Group's) status as both an equity holder and a creditor." Id.

Judge Kaplan found that the case before him was distinguishable from Lexington Hospitalityand Intervention Energy. He noted that the lenders in those cases conditioned financing or loan forbearance on being given a "golden share" with which they could block a bankruptcy filing. In this case, Judge Kaplan explained, there was no evidence to suggest that HEL's contribution, which was substantial and significantly exceeded the amount of its loan, was "merely a ruse to ensure" that the debtor repaid the loan.

According to Judge Kaplan, Pace and other decisions addressing the public policy issue have attempted to balance the constitutional right to file for bankruptcy against the constitutional right to contract and enforce agreements with creditors and other stakeholders. Pace, he wrote, is distinguishable, because it was "bottomed on the narrow specific facts of the case, which are dramatically different." He explained that the debtor in Pace needed to file for bankruptcy to preserve value and protect employees and creditors, and the court accordingly concluded that the bankruptcy case would benefit most stakeholders.

The Pace court's finding that the blocking provision was void as a matter of public policy, Judge Kaplan noted, was premised on its finding that the majority shareholders owed a fiduciary duty to other shareholders and all creditors because the company was in the "zone of insolvency." The Pace court, he explained, concluded that the blocking provision allowed the minority shareholder to "violate, or side-step, its fiduciary duty and infringe on the debtor's constitutional right to file for bankruptcy." Id.

Judge Kaplan declined to follow this approach for two reasons. First, he noted that the debtor before him was a non-operating investor in a joint venture without any employees, significant creditors, or other stakeholders that would stand to benefit from the bankruptcy. Second, Judge Kaplan had "serious reservations" that HEL, as a noncontrolling minority member, had any fiduciary duties because Delaware law establishes that only managing members of an LLC have such duties, the Delaware LLC Act expressly permits members to contract around even those duties, and, in fact, the limitation of liability provision in the LLC agreement between the debtor and its members did precisely that. "In sum," Judge Kaplan wrote, "there is no breach of fiduciary duty which renders the provision at issue violative of public policy." Id. at 214.

Outlook

Recent court rulings have not resolved the ongoing dispute over the enforceability of blocking provisions, golden shares, and other provisions designed to manage access to bankruptcy protection. Hightstown, Pace, Franchise Services, and Insight indicate that the validity of such provisions may hinge on whether the holder of a blocking right has fiduciary duties as a matter of law or contract, in which case the courts have expressed heightened public policy concerns. More generally, these and other relevant decisions reinforce the importance of knowing what approach the courts have endorsed in any likely bankruptcy venue. Given the trillions of dollars of securities issued in connection with SPEs, the enforceability of such provisions in various venues may be economically significant.

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Another Bankruptcy Court Joins the Debate on the Validity of Bankruptcy Blocking Restrictions - JD Supra

A Chapter 7 bankruptcy requires bankruptcy filers to liquidate assets, and it's a relatively short process. Once you've sold the assets you're required to sell, any debts that couldn't be repaid will be discharged. This type of bankruptcy generally takes three to six months to discharge after the bankruptcy filing.

A Chapter 13 bankruptcy discharge takes much longer because it requires the debtor to follow a three- to five-year repayment plan. You can only apply for a credit card during a Chapter 13 repayment plan if you have the approval of the trustee. Even if you do, the credit card company may deny your application since you're still in the bankruptcy process.

Choosing a new credit card after bankruptcy is an important decision to get right. The goal is to find a quality card from a reputable card issuer that you can use to build credit. Here are a few tips you can follow to make this easier.

You're already aware your credit score took a hit, but you should still know where it stands currently. This will play a part in the credit cards you qualify for. If you're looking for a free place to check your credit, Experian and Discover both offer tools that provide your FICO Score (the most widely used type of credit score by lenders).

Also pull your credit report from each credit bureau: Equifax, Experian, and TransUnion. Review them for any errors on your credit history that could be affecting your credit score. Your credit report will also tell you exactly when your bankruptcy was reported.

Many credit card issuers have an online prequalification tool. After you fill out a form with some basic information, this tool lets you know if you're prequalified for any of that issuer's credit cards. That's not a sure thing, but it means you have solid odds of getting approved for a credit card.

See what credit cards fitting your situation are available from major banks, your local credit union, and any other credit card issuers you find. After bankruptcy, credit cards for bad credit are a good place to start. These are intended for consumers with lower credit scores. Card issuers often have a section with cards designed for building credit and rebuilding credit on their websites.

Another option for poor credit is secured credit cards. This type of card requires a security deposit up front, so card issuers are more lenient on the applicants they approve because they won't need to worry about unsecured debt. With a typical secured card, the minimum security deposit is $200, but there are a few that have lower minimums.

Credit card companies all have their own restrictions on applicants with bankruptcies, and you can often find this information in the terms and conditions for their cards. If you're considering applying for a credit card, search the terms and conditions for "bankruptcy" to see if there are any rules that would lead to a denial.

For example, Capital One won't approve any applicant with a non-discharged bankruptcy. So, while it has some of the best credit cards after Chapter 7 bankruptcy, you wouldn't want to apply if you're in the middle of a Chapter 13 repayment plan.

Citi is another example, as it won't approve applicants with any bankruptcy history in the last two years.

As you compare credit cards, the No. 1 thing to look out for is fees. Specifically, it's the unavoidable fees that are problematic, such as a monthly or an annual fee. Late fees, cash advance fees, balance transfer fees, and other fees of this nature aren't a deal breaker, because those are all charges you can avoid.

The best credit cards after Chapter 7 and Chapter 13 bankruptcy are ones that charge inexpensive or preferably zero maintenance fees.

If you follow good habits with your credit card, that card activity can help you rebuild your credit. Here's exactly how to use a credit card after bankruptcy so that you improve your credit score:

As you recover from bankruptcy, also focus on building financial security. Make a budget so you know how much you can spend each month. Also set up a savings account with an emergency fund and contribute to it regularly.

If you do that, you'll steadily become more financially stable. Plus, as you use your credit card consistently and pay its bills on time, your credit will recover. It takes time, but you'll eventually reach the point where you can qualify for the best credit cards.

Excerpt from:

Best Credit Cards After Bankruptcy | The Ascent - Motley Fool

Remington Arms Company is one of the countrys oldest gun manufacturers and claims to run the oldest factory in the US that still makes its original product. However, after the companys most recent bankruptcy, Remington has announced its departure from its historic home of Ilion, New York.

In 1816, Eliphalet Remington founded E. Remington and Sons in New York. He sought to build a better rifle than what was commercially available. Later that year, he took his newly built flintlock rifle to a shooting match and impressed his competitors with his new creation. Before leaving the competition, Remington was flooded with orders for rifles.

In 1928, Remington moved his operation to a larger plant in Ilion that the company still operates today. Since then, Remington has developed firearms and ammunition for both military and civilian applications. On November 8, 2021, the recently revived Remington Arms announced the move of its global headquarters from Ilion to LaGrange, Georgia, outside of Atlanta. The company also announced the opening of a new manufacturing facility alongside the headquarters in Georgia.

Remingtons move comes in the wake of both bankruptcies and unfavorable legislation in its historical home state. We are very excited to come to Georgia, a state that not only welcomes business but enthusiastically supports and welcomes companies in the firearms industry, said Remington CEO Ken DArcy in a press release. Everyone involved in this process has shown how important business is to the state and how welcoming they are to all business, including the firearms industry.

Following the companies revival, Remington brought back over 200 workers at its Ilion facility who had been laid off. The local government also offered the company 10 years of tax breaks in exchange for the restart and upgrades to keep Remington in New York. However, the local government in LaGrange offered Remington property tax abatements as well as utility and infrastructure improvements. Georgias firearms industry is responsible for thousands of jobs and millions of dollars of investment in our communities, said Georgia Governor Brian Kemp. I am a proud owner of some of Remingtons first-class product, and now, I am excited to welcome them to their new home in the Peach State. Georgia is also the home of Glock USA.

In 2013, Remington won the US Army and USSOCOM Precision Sniper Rifle competition with its Modular Sniper Rifle. However, in 2018, SOCOM announced that the MSR did not conform to its requirements at the time and the program was re-competed. The next year, Barretts MRAD was selected as the new winner. Included in its move to Georgia is Remingtons Research & Development Center. As the company re-establishes itself, both the military and civilian market can expect new products to emerge from Remingtons Georgia facilities.

Link:

Remington Arms returns from bankruptcy and moves to Georgia - We Are The Mighty

Approximately more than a number of 10,600 people died by suicide due to unemployment, poverty or bankruptcy, and indebtedness in 2020, which led to an increase of 8% as compared to 9,881 deaths by suicide due to these similar causes together in 2019.

The recent government statistics on this matter show than on average, more than one individual died by committing suicide every hour because of any of these causes in 2020. There was a decrease in number due to bankruptcy or indebtedness to 5,213 in 2020 from 5,908 in the last year, deaths due to unemployment and poverty both recorded a sudden increase.

Also Read: Farmer Suicides on a Rise; Government Reluctant to Repeal Farm Laws

The increase in death due to poverty had gone up by 69% to 1,901 in 2020 from 1,122 in 2019, whereas there was a decrease in deaths by suicide due to total bankruptcy was 11%. While deaths by suicides due to unemployment recorded a jump of 24% (3,548 from 2,851).

Of the total 10,622 deaths by suicides that were attributed due to all these causes in 2020, those that are related to bankruptcy and indebtedness are nearly half that is 49%, while a third of them which is 3,548 were due to employment. Poverty made 1,901 people to commit suicide.

These causes of suicide together accounted for almost 7% of the total number of deaths by suicides which is almost more than 1.5 lakh that is reported in the nation in 2020. Relatively, they accounted for 8% of the 1.3 lakh suicides that was reported in 2019.

An analysis of data since 2015 clearly shows that 45,406 people died by suicide due to various causes, with those relating to bankruptcy almost accounting for nearly 29,218 or 65% deaths, followed by causes due to unemployment which is 16,565 or 36% deaths.

Data also presents that there are some fluctuations in different cases relating to each of the individual causes. They are increasing every year since 2016. In that specific year, the total suicides due to these different causes had decreased by 18% to touch 7,179. From there, it went up by 22% in 2017, by another 2% in 2018, 11% in 2019, and 8% in 2020, the year which recorded the highest deaths in this period.

The suicides that happened due to these causes in 2020, most deaths not surprisingly took place in the age group of 30-44 years followed by the ones aged 18 and 29 years. The least deaths were among those people under the age of 18 and above 60 years old. People aged between 30 and 44 years accounted for almost nearly 40% of such suicides that is 4,218 while those 18 but under the age of 30 years old accounted for almost 3,065 or 29%.

Further, almost 70% or 7,415 deaths by suicide were reported in four of the southern states: Telangana, Karnataka, Andhra Pradesh, and Tamil Nadu, and also Maharashtra. When it comes to causes like bankruptcy, almost 9 out of 10 deaths were reported in these specific states, which for poverty it was 53% and due to unemployment, it was 50.5%.

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Hike in deaths by suicide in 2020 due to main causes of poverty, bankruptcy, and unemployment

Description

Of the total 10,622 deaths by suicides that were attributed due to all these causes in 2020, those that are related to bankruptcy and indebtedness are nearly half that is 49%, while a third of them which is 3,548 were due to employment. Poverty made 1,901 people to commit suicide.

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TPT News Bureau

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THE POLICY TIMES

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Hike in deaths by suicide in 2020 due to main causes of poverty, bankruptcy, and unemployment - thepolicytimes.com

In its heyday, Le Chateau had nine stores along a roughly three-kilometre stretch of Ste-Catherine Street in Montreal.

The Canadian retailer was a staple of nearly every mall and shopping district in the country, with 240 locations at its peak.

"The more sales we made, the more stores we opened and the more stores we opened, the more sales we made," says Franco Rocchi, a Le Chateau executive that started with the clothing brand four decades ago as a sales clerk at one of the Ste-Catherine Street locations.

"That was the retail formula back then and it worked. It was all about brick and mortar -- not only for Le Chateau but for Aldo, Gap and others throughout the 70s, 80s and 90s. We were in every primary market, secondary market and tertiary market."

Le Chateau defined edgy clubwear, formal dresses and fashionable office attire for decades in Canada, but started facing increasing competition from foreign retailers like H&M and Zara in the early 2000s.

By 2014, Le Chateau was losing money. But the company had a plan: Close 100 stores over five years, with a return to profitability in 2020.

"We did it the honourable way," Rocchi says. "We had leases, we had handshakes, we had good relationships with our landlords. We thought we could navigate the five-year plan."

But the exit strategy the retailer spent half a decade working toward hit a major snag.

"The plan included a turnaround, a return to profitability," Rocchi says. "But the irony was that magic year we worked towards for five years was 2020."

Pandemic shutdowns not only shuttered the retailer's stores throughout 2020. Proms, weddings, galas and parties -- key drivers of the retailer's dress sales -- were outright cancelled.

Le Chateau filed for creditor protection in October 2020, joining the ranks of dozens of big-name retailers that buckled under the weight of COVID-19 restrictions.

In June, Suzy's Inc. -- the company behind women's clothing brand Suzy Shier -- stepped in to buy Le Chateau's intellectual property and now it's making a comeback with the online launch of an evening wear collection ahead of the holidays.

The so-called glamour capsule unveiled Tuesday offers shoppers a hint of what to expect with the brand's official relaunch under its new owner set for spring.

Rocchi -- now senior marketing director of Suzy/Le Chateau -- says the curated, limited-edition collection highlights the brand's focus on high-fashion occasion wear.

"Even as we were going through the challenge of closing stores, we actually started to see significant success in our dress business," he says. "We were seeing year-over-year growth in our occasion business. We found our sweet spot, which was beautiful dresses at a great price point."

The full collection planned for 2022 will include footwear, accessories and menswear, with women's dress wear available in select Suzy Shier stores across the country.

"We will have stores within stores at about 35 Suzy locations across the country," Rocchi explains. "It won't just be Le Chateau products pushed into Suzy stores. It will be a clearly demarcated beautiful shop, so customers will know it's Le Chateau."

He adds that there will be no "cannibalization" between the brands, as Suzy Shier is focused on casual, weekend and work wear.

"We like to say our customers can wear Suzy by day and Le Chateau by night," Rocchi says.

Indeed, the Suzy Shier website appears divided in half, with a model wearing a sweater and items like warm hats and gloves on one side, while a model is dressed in an evening gown on the other side along with items like sparkly "party tops."

This report by The Canadian Press was first published Nov. 16, 2021

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Le Chateau's return from bankruptcy includes online sales, stores within stores - AM800 (iHeartRadio)

After 28 years on the bench, U.S. Bankruptcy Court Judge Jerry Funk began quasi-retirement Nov. 2, the first day of a three-year term of reserve status.

That status is how Funk, 76, will stay in touch with his colleagues and help his successor and another new bankruptcy judge transition to the U.S. Middle District of Florida bench.

I dont play golf. Im not a fisherman. I read and I jog every day, Funk said.

Its having a place to go for a few hours, but Ill let the new guys handle the Chapter 11s because they can go on a long time.

Appointed to the bench in 1993, Funk has presided over many high-profile cases, including the Chapter 11 reorganization of Winn-Dixie Stores Inc. and the personal bankruptcy of former Jacksonville Jaguars quarterback Mark Brunell.

He presided over the liquidation of Taylor, Bean & Whitaker, an Ocala-based wholesale mortgage lender. The case is significant because TB&W was the fifth-largest issuer ofGovernment National Mortgage Association securities when the government shut it down in 2009 and charged it with bank fraud.

The last case of Funks full-time career in the bankruptcy court was the liquidation of Jacksonville-based Stein Mart Inc.

Jacksonville Bankruptcy Bar Association President Allan Wulbern, left, presented a box of cigars to retired U.S. Bankruptcy Court Judge Jerry Funk.

A reluctant law student

Funk grew up in North Georgia. He was firmly guided toward college by his father, a Polish immigrant who worked in textile mills, where Funk worked each summer starting before he was a teenager.

Dad gave me the dirtiest, hardest-working jobs. He didnt want me to be in the carpet business, Funk said.

After graduating from the University of Georgia in 1967 with a degree in business administration, Funk said he faced the choice of continuing his education or possibly being drafted and sent to the Vietnam War.

I never wanted to be a lawyer, but I took some business law courses at Georgia. I said well, let me go to law school.

After enrolling at Cumberland School of Law at Samford University in Birmingham, Alabama, Funk joined the U.S. Army Reserve and missed a semester while in basic training.

He returned and received his J.D. in 1970.

When I got out of law school, I said Id take the Bar exam one time. I took a review course and they said I had a 70% chance of passing it, Funk said.

With law school behind him, Funk and his wife, Maxine Witten Funk, planned to move to South Florida, but that plan changed.

Maxines parents lived in Jacksonville, so the Funks rented a house from them and Funk started looking for employment after taking the Bar exam in Miami.

Senior U.S. Circuit Judge, 11th Circuit Court of Appeals Gerald B. Tjoflat, left, and retired U.S. Bankruptcy Court Judge Jerry Funk. Tjoflat administered the oath of office to Funk on Nov. 3, 1993.

I went to insurance companies trying to get a job because I didnt think I passed the exam. They wouldnt hire me. They said that with a law degree, I was overqualified, Funk said.

He learned from a cousin who practiced law that a small local firm, Coleman Madsen, might be looking to hire someone to draft motions, write letters and do research.

Funk said he went to meet the partners without a resume or transcript, still under the impression there was no way he could have passed the Bar exam.

They interviewed me on a Friday and called later that day and told me to come to work on Monday. I lucked into a job.

One of the partners decided to call the Florida Board of Bar Examiners to inquire about the results of the new employees exam.

They told him I passed. I didnt believe him, so I called the board and confirmed it, Funk said.

Weeks later, Coleman decided to leave the firm. Madsen did a lot of work for the Church of Jesus Christ of Latter-day Saints, so he spent most of his time in Salt Lake City, where the church is based, Funk said.

All of a sudden, I was alone in the office. I didnt have any mentors and I was going up against experienced attorneys. I was getting beaten to death. I didnt know what I didnt know, but I started to enjoy practicing law.

Learning by doing

As an unintended solo practitioner, Funk found it difficult to build enough business to make a decent living in civil law, so he diversified his practice.

In the early 1970s, the Municipal Court paid private attorneys to represent indigent criminal defendants, he said.

I made $25 a case. I picked up two or three cases, sometimes four. It was mostly DUIs and Id get them off on probation, Funk said.

He later went into partnership with attorney Mark Green and for nearly 20 years practiced personal injury, family and real estate law at Funk & Green.

He also started doing some pro se misdemeanor work in federal court and some simple filings in bankruptcy court.

U.S. Bankruptcy Court Judge Jacob Brown succeeded retired U.S. Bankruptcy Court Judge Jerry Funk. Brown presented a University of Georgia football helmet to Funk, a UGA undergraduate alumnus.

His limited bankruptcy practice led to becoming a Chapter 13 trustee.

When I went on the bench, I had all the experience in the world. It probably made me a better judge, Funk said.

Funk applied to become a bankruptcy judge in 1992 and was appointed a year later.

The job paid two-thirds of what I made as a lawyer. It was tough, but it turned out to be the best job Ive ever had, Funk said.

A sense of humor

As a former somewhat reluctant law student and mostly self-mentored attorney, Funk transitioned that background to the bench.

I take my job seriously, but I dont take myself seriously. You have to maintain a sense of humor, he said.

That was evident the day Funk began presiding over Winn-Dixies bankruptcy in 2005.

At the first hearing, I had all these New York lawyers come in. They talked 100 miles an hour. I said, Wait a minute. Youre not in New York, youre down in the South. We talk a lot slower. We hear a lot slower. You guys need to calm down, Funk said.

At the next hearing, none of those guys were there. They had local counsel appear.

Funks judicial demeanor and his sense of humor are appreciated by the attorneys who practice in his court.

Judge Funk treats people with respect, kindness and oftentimes humor. It makes appearing before him a pleasure. He disarms everyone with his modesty and humility and then wows you with his sneaky Southern intellect. Its a real gift, said Allan Wulbern, president of the Jacksonville Bankruptcy Bar Association.

Cases involving multimillion-dollar business issues can be heard on the same day that an individual is trying to save his or her home from foreclosure and obtain a fresh start, Wulbern said.

It takes a special person to be a bankruptcy judge and the best ones never lose sight of how impactful their decisions can be.

Funk said his philosophy is to treat everyone the same, whether the case is a complex commercial liquidation or consumers who got into too much credit card debt and are representing themselves in court.

I sit and listen and let them get it off their chest. A lot of people just want their day in court.

Whats next

Funk is succeeded by Jacksonville bankruptcy lawyer Jacob Jay Brown, who was sworn in Nov. 3.

Another bankruptcy judge also will be appointed in Jacksonville to succeed Judge Cynthia Jackson, who retired from the court in August.

Funk said he was contemplating retirement when his wife of 45 years died in October 2011 after a short illness. He decided to remain on the bench to focus on work, but that was 10 years ago.

Im ready now. Enough is enough, Funk said.

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Jerry Funk: 28 years on the bankruptcy bench - Jacksonville Daily Record