Posted by Kevin on June 29, 2011 under Bankruptcy Blog | 
The Dodgers filed Chapter 11 in the Bankruptcy Court in Delaware. The case has a lot of intrigue. An expensive and messy divorce involving the owners, allegations of misuse of funds by the baseball commissioner, court maneuvers, hedge funds, you name it. But the one thing that caught my eye was a list of creditors. It seems that the Dodgers owe players, like Manny Ramirez, millions of dollars in deferred compensation.
So, big deal. A contract is a contract, right? Well, maybe not. The bankruptcy code allows a debtor to reject an executory contract. That term is not defined in the Bankruptcy Code, and there has been much litigation, both in bankruptcy court and other courts, as to what constitutes an executory contract. Generally speaking, an executory contract is a contract where there has not been complete performance- one party or both still have to do something under the contract.
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Posted by Kevin on June 22, 2011 under Bankruptcy Blog |
In a Chapter 7 case, at the meeting of creditors, the trustee almost always asks whether you are going to receive an inheritance within 180 days. If so, the trustee has a right to claw back that inheritance less any exemption that you might have.
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Posted by Kevin on June 21, 2011 under Bankruptcy Blog |
This is the third blog on the automatic stay.
By now, it should be sinking in that the automatic stay is a powerful tool which can help a debtor by giving him or her some breathing room to move forward.
But the automatic stay only applies to the property that is in the bankruptcy estate.
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Posted by Kevin on June 3, 2011 under Bankruptcy Blog |
In a previous post, I reviewed a case in the Eastern District of NY which extended the automatic stay to include actions against an separate, non-filing entity where the debtor is a guarantor. Stay applied.
However, in a recent PA bankruptcy case, the court found that the automatic stay was not violated. In that case, A sued B (eventual debtor), C & D before A filed bankruptcy claiming that A fraudulently transferred property to B & C. A fraudulent transfer occurs when a person owes creditors and owns property (usually real estate). The debtor transfers the property for less than fair market value to a third party (usually a friend or relative) so that the creditors cannot get their hands on the property once the creditor has obtained a judgment.
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