Recently, a bankruptcy judge denied confirming a Chapter 11 plan because the Debtor preferred one creditor among a class of creditors over the others. Section 1122(a) is a mandatory prerequisite for confirmation. That section requires Chapter 11 plans place substantially similar claims in the same class.
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Mortgage Lenders and Landlords: Your Compliance with Consumer Statutes is on the Consumer Financial Protection Bureau’s Agenda
In a July 1, 2021, statement, the Consumer Financial Protection Bureau (the “CFPB”) warned landlords and consumer reporting agencies to report rental and eviction information accurately. Among other information in the CFPB’s statement, the CFPB identified plans to watch closely whether mortgage companies and landlords are properly reporting: (i) amounts paid on behalf of a tenant through a government grant or relief program, as well as (ii) fees or penalties prohibited by the CARES Act section 4024(b) or other laws.
Mortgage Attorneys Beware! A Bankruptcy Court May Enforce a Lower Interest Rate on a Mortgage Adopted by a Judgement of Foreclosure.
Specifically, where a mortgage creditor did not assert the default rate provided in an action taken to judgment on foreclosure, the bankruptcy court enforced the mortgage interest rate from a state court foreclosure order and determined the total debt to creditor based on the contract rate of 3.25% per annum “through the date to which such interest [was] computed,” versus the higher 18% default rate to which the creditor was contractually entitled had it properly asserted its claim.
To recover a claim under section 547, a Chapter 7 trustee must prove a transfer was made to or for the benefit of a creditor; on account of an antecedent debt; while the debtor was insolvent; within 90 days before the filing of the bankruptcy petition (or between 90 days and one year for transfers to insiders of the debtor; and the creditor would receive more than if the case were a chapter 7 liquidation.
Workout and bankruptcy professionals braced themselves for a wave of consumer and commercial bankruptcy filings because of the COVID-19 economic recession. Afterall, shuttered businesses led to the highest rates of job loss in recent memory. Business interruption and job loss usually result in bankruptcy filings. Instead, we saw a major drop in filings.