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A trend is emerging. Another court holds a Subchapter V corporate debtor can discharge certain debts.
Anticipating post-filing conflict is one of the more important pre-filing jobs for bankruptcy attorneys.
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.
The Small Business Administration (the “SBA”) on April 6, 2021, issued new guidance on the Payroll Protection Program (the “PPP”) for entities in bankruptcy that wish to participate in the PPP. Moreover, any debtor in a bankruptcy case, or debtor with a part-owner (20% or greater) in bankruptcy, who is considering applying for a PPP loan cannot be “presently involved in a bankruptcy” to be eligible for a PPP loan.