Meet the Co-chairs - TAGLAW
Conner & Winters, LLP
Blaney McMurtry LLP
Insolvency and Secured Transactions
The COVID-19 outbreak that has resulted in restrictions placed on our borders, community gatherings and the way we socialise is having a direct and immediate impact on virtually every industry and business that employs people, relies on consumer sentiment and confidence, or on a supply chain to conduct its business. Directors and stakeholders need to know that there are options available in these distressed times.
Authors: Stephen Selbst and Gabrielle Fromer
In In re Rosenberg, Judge Cecelia Morris of the United States Bankruptcy Court for the Southern District of New York permitted the debtor to discharge his student loan debt in a bankruptcy. The Rosenberg decision, which is on appeal, is noteworthy because under section 523(a)(8) of the Bankruptcy Code, student loan debt can only be discharged in cases of “undue hardship.” Rosenberg reinterprets – more leniently -- the standard for discharging student loan debt established in Brunner v. N.Y. State Higher Educ. Servs. Corp. (In re Brunner), 831 F.2d 395, 396 (2d Cir. 1987). The Brunner test for student loan debt discharge is followed by every Court of Appeals except the First and Eight Circuits, which use a totality of the circumstances test. The Rosenberg court ruled that debtor, Kevin Jared Rosenberg (“Rosenberg”), satisfied the Brunner test and discharged more than $220,000 of his student loan debt.
Author: Andrew Turner
The U.S. Supreme Court, on January 14, 2019, handed down a unanimous decision on appealability of an order denying relief from stay in bankruptcy court. Resolving a circuit split, the Supreme Court held an order denying a motion for relief from the automatic stay is immediately appealable “when the bankruptcy court unreservedly grants or denies relief.”
Authors: Stephen Selbst and Daniel A. Field
In Lubonty v. U.S. Bank Nat’l Ass’n, the New York Court of Appeals ruled on whether a lender’s foreclosure action became untimely when the borrower filed for bankruptcy and the lender’s action was halted by operation of the Bankruptcy Code’s automatic stay. Under section 213(4) of the New York CPLR, the statute of limitations for an action on a mortgage is six years. However, section 204(a) provides that when an action has been stayed by a court or statutory prohibition, the duration of the stay is not covered for purposes of determining the statute of limitation. In Lubonty, the issue was whether the automatic stay provisions of Bankruptcy Code § 362(a)(1) constitutes a “statutory prohibition” within the meaning of CPLR § 204(a), and if so, whether the term “commencement” within CPLR § 204(a) applies to a claimant who, when a bankruptcy stay was initiated, had already commenced an action against the debtor–later dismissed—on the claim now asserted. The court ruled it does.
Author: Aaron M. Kaufman
Over the years, much has been written about the Bankruptcy Code’s treatment of small businesses, and the American Bankruptcy Institute Commission’s testimony to Congress this summer made clear that the existing law fell short of providing necessary relief for small businesses. For example, of the 18,000 small business bankruptcy cases filed between 2008 and 2015, less than 27% of those cases resulted in confirmed plans of reorganization. And these numbers excluded countless small businesses that, for a variety of reasons, did not or could not seek bankruptcy relief. See Robert J. Keach, ABI Testifies on Family Farmers and Small Business Reorganizations, XXXVIII ABI Journal 8, 8-9, August 2019, available at https://www.abi.org/abi-journal/abi-testifies-on-family-farmers-and-small-business-reorganizations (subscription required).