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75 Cards in this Set
- Front
- Back
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This set of flashcards is the property of Nathan K. Shrewsbury. They may not be reproduced
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published or distributed without his express permission.© Nathan K. Shrewsbury© 2009 All rights reserved.
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Associates Commercial Corp. v. Rash 520 U.S. 953 (1997) Ginsburg: If the debtor keeps and uses an item
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s/he pays the replacement value of the item. (this will provide some relief to the debtor if s/he is upside down in the payment plan)
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AS:3 Consequences of violating the automatic stay? 1. Conduct has no legal effect against debtor/estate. 2. Damages: Actual
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Atty Fees
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AS:4 Who is covered by the automatic stay? The debtor only
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not a guarantor. 11 USC 362(a)
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AS:5 SAS Overseas Consultants and Asia Contracting
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Ltd. v. Benoit (E.D. La.
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Question
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Answer
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This set of flashcards is the property of Nathan K. Shrewsbury. They may not be reproduced, published or distributed without his express permission.©
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Nathan K. Shrewsbury© 2009 All rights reserved.
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Which law controls the assignment of security for debt(Fed/State)?
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State Law
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Associates Commercial Corp. v. Rash 520 U.S. 953 (1997)
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Ginsburg: If the debtor keeps and uses an item, s/he pays the replacement value of the item. (this will provide some relief to the debtor if s/he is upside down in the payment plan)
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AS - Automatic Stay When does the automatic stay arise?
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Instantly upon filing 11 USC 362
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AS:2 What is the scope of the stay?
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Everything but the exceptions in 11 USC 362(a) and 11 USC 362(b)
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AS:3 Consequences of violating the automatic stay?
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1. Conduct has no legal effect against debtor/estate. 2. Damages: Actual, Atty Fees, Punitive under 11 USC 362(h).
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AS:4 Who is covered by the automatic stay?
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The debtor only, not a guarantor. 11 USC 362(a)
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AS:5 SAS Overseas Consultants and Asia Contracting, Ltd. v. Benoit (E.D. La., 2000)
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Legal actions (not against a debtor) may be stayed after bankruptcy to give a debtor breathing room to reorganize its finances.
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AS:6 Is "adequate protection" a grounds for relief from stay?
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Yes, § 362(d)(1)
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AS:7 What may provide "adequate protection?" under 11 U.S.C §361
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11 U.S.C §361 (1) Cash payment or periodic cash payments; (2) replacement lean to hedge depreciation (3) other relief under 503(b)(1)
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Elegibility:1 A person may be a debtor under chapter 7 only if this person is not--
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1) a railroad 2) a domestic insurance company, bank, savings, band, cooperative bank, savings and loan, building and loan associaltion
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EG:2 What must a person have to to be a debtor
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US residence or domicile, place of business, or property.
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EG:3 When may an individual [or family farmer] be a debtor who has been a debtor in a case pending at any time in the proceeding 180 days?
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1) Case not involuntarily dismissed 2) Case not [the courts do not like diddling]
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EG:4 Why do most jurisdictions permit agreements that sign away the automatic stay?
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B/C the debtor is not giving up the right to bankruptcy and we want to encourage settlement.
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EG:5 How much unsecured debt is required for an involuntary bankruptcy
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total of $13,475. [ 11 U.S.C 303(b)(2)
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11 U.S.C 330 Permits forbids compensation for services that were not . . .
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i) reasonably likely to benefit the debtor's estate; or ii) necessary to the administration of the case
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In C.12 and C.13 when MAY the court allow reasonable compensation to a debtor's atty?
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For representing the debtor's interests in connection with the bankruptcy.
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What is the requirement under 11 USC 327(a) for a court to approve employees to assist a trustee?
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The proposed employees must be disinterested. Nathan K. Shrewsbury© all rights reserved
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Under 11 USC 330(a)(1f) the court MAY award a trustee, examiner, professional, or a atty compensation for what?
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A) actual necessary services rendered. B) Reimbursement for actual, necessary expenses.
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What are the elements of the "Piper Test," which determines when an individual has a 101(5) claim against a debtor manufacturer
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i) events preconfirmation create a relationship such a s contact or privity ii)the basis for liability is the debtors prepetition conduct ( causing a product liability tort)
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Under 502(c)(1) what claims may be estimated by a bankruptcy court?
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Any contingent or unliquidated claim where fixing the value of the claim, would unduly delay the administration of the case.
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11 USC 503(b)(1)(A)(i) ALLOWS administrative expenses - other than claims allowed under section 502(f) of this title, including -
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(1)(A) the acual, necessary costs and expenses of preserving the estate, including- (i) wages, salaries, and commissions for services rendered after the commencement of the case
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Admin Expenses: shall be neither paid nor allowed under 11 U.S.C 503(c) when . . .
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1) transfer is made or 2)obligation incurred on behalf of . . an insider.
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What is necessary for recovery of goods received by a BR debtor within 20 days of a petition.
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11 U.S.C 503(b)(9) 1) Notice and a hearing 2) Goods are sold to the debtor in the ordinary course of business.
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What are the implications under 11 USC 523(a)(1)(A) when the IRS has obtained a federal tax lien?
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The fed becomes a secured creditor, but if the tax is for more than 3 years back, it is (incomplete card fix it)
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AP From whom may a trustee NOT recover under 11 USC 550(a)(2)
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(1) Transferee who takes for value, in good faith (2) any immediate or mediate good faith transferee of the transferee Nathan K. Shrewsbury © all rights reserved.
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AP From whom may a trustee recover through "avoidance" for the benefit of the estate?
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11 USC 550(a) (1) the initial transferee or entity for whose benefit such transfer was made. (2) any immediate or mediate transferee of the initial transferee.
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AP For an entity who has had avoidance exercised against them under 11 USC 550, what is necessary for such an entity to bring a claim against the estate?
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11 USC 502(d) Claims from victims of avoidance are DISALLOWED unless the victim has paid the claimed amount or turned over the claimed property to the estate.
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Janiks Footlongs (a sub shop) files for bankruptcy. After commencement JF pays vendor Nate's Unbeatable Meets half of JF's outstanding obligation. Can Nate's make a claim for the remainder of JF's debt?
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Depends - To prevent dissalowance of its claim Nate's must return to the estate any avoidable transfer (502(d)). Since JF's payment to Nate's came post petition it is avoidable under 549. This must be done within two years of the commencement of JF's bankruptcy and prior to discharge.
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AP what are the "Badges of Fraud" in a pre-petition transfer?
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i) existence of a family or other close relationship between the transferror and the transferee ii)the absence or inadequacy of consideration iii)secrecy of the transfer
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AP Insolvent means?
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That the sum of an entity's debts is greater than all of such entity's property at fair valuation.
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What are the elements of constructive fraud in a transfer?
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11 548(a)(1)(B) (i) received less than reasonable equivalent value -AND- (ii) (I) was insolvent at time of transfer, or became insolvent from transfer (II) any property remaining with debtor was unreasonably small capital (could not continue to do business). (III) Incurred debts beyond ability to pay as debts matured. (equitable insolvency)
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AP What are the six elements of a Preference?
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11 USC 547(b) 1. transfer of property 2. for benefit of creditor 3. antecedent debt 4. debtor insolvent 5. 90 days prior to filing (1year for an insider) 6. creditor gets more than she would have in a Ch.7 dis
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AP When does 11 USC 550(a) apply to a preference?
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When the transfer was made for the benefit of an insider. 550(c)(2).
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AP To whom does 11 USC 550(a) apply?
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The initial transferee -or- entity for whose benefit such transfer was made ©Nathan Shrewsbury 2009 All rights reserved
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AP When does 11 USC 547(f) permit the assumption of insolvency on the part of the debtor?
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90 days prior to filing of BR.
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AP When is a transfer that is avoidable under 11 USC 547(b) protected?
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Under 547(c)(2) and (4) (2) Incurred in the ordinary course of business (a) between debtor and transferee or (b) according to ordinary business terms (4) creditor gave NEW VALUE (a) not secured by unavoidable interest AND (b)debtor did not make an unavoidable transfer to or for the benefit of such creditor
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AP What 3 things does 11 USC 554 Do?
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1. Generally recognizes a nonbankruptcy right of setoff. 2. Protects any prebankruptcy setoff from avoiding under sections 545-548 and any postbankruptcy setoff from avoidance under section 549; Provides a basis for avoiding a prebanruptcy setoff under 553(b)
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AP - Setoffs When may a setoff be avoided under 553(b).
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Within 90 days prior to BR if a creditor offsets and the insuffciency at the time is less than the insufficiency 1) 90 days prior to filing, or 2) the first day during the 90 day period where there is an insufficiency. ©Nathan K. Shrewsbury 2009
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AP - Setoffs Define insufficiency.
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11 USC 553(b)(2) "insufficiency" means amount, if any, by which a claim against the debtor exceeds a mutual debt owing to the debtor by the holder of such a claim.
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AP - Setoffs When is insolvency on the part of the debtor presumed
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11 USC 553(c) . . . during the 90 days immediately preceding the date of the filing of the [BR] petition.
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AP - Setoff May a Creditor transfer a Debtor's debt to an entity that owed the debtor money for setoff purposes?
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11 USC 553(a) If and only if: (2)(A) case not commenced yet -and- (2)(B)(i) it is more than 90 days prior to filing. -and- (ii) debtor is solvent
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AP - Incomplete Transfer What claims may be avoided by the trustee under 11 USC 544(a)?
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claims voidable under non-bankruptcy law.
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AP - Incomplete Transfer Is recoupment covered by the automatic stay?
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11 USC 362 NO - It just doesn't apply
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AP - Incomplete Tranfsfer When is a transfer that is voidable under non-bankruptcy law voidable by the trustee?
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11 USC 544(a) When . . . 1) non-bankruptcy law public notice requirements have been timely satisfied. 2) Creditor who obtained lean as of filing date is NOT protected by state law.
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AP - Recoupment What distinguishes recoupment from the doctrine of setoff?
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Recoupment is only available when the defense asserted arises out of the same transaction.
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AP - Incomplete Transfer What classes of creditors does 544(a) apply against under ?
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11 USC 544(a) 1) Creditor who extends credit for lien at commencement.(Estate is in Possession) 2) Creditor who extends credit and obtains execution (Creditor is in possession) 3) bona fide purchaser of real property. . . . all whether or not such creditor/purchaser exists.
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AP- Incomplete Transfer When a tranfer is not perfected until 30 days following a transaction when is the transaction deemed to have taken place?
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11 USC 547(e)(2)(B) at the time the transfer is perfected.
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AP: Does a reorganization estate include property of the debtor that has been seized by a creditor prior to the filing of a petition for reorganization?
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Yes, see 11 USC 542(a) see also United States v. Whiting Pools, Inc 462 US 198 (1983)
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AP: -Turnover of Property to the estate Does 11 USC 542(a) apply when a creditor in possession of a debtor's property has a security interest in the property?
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Yes, see e.g. US v. Whiting Pools
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AP: -Turnover of Property Which code sections deal with the turnover of property?
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11 USC 543 - by custodian 11 USC 542 - by other than custodian
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AP: - Turnover of Property What are a custodian's obligations when BR is declared?
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11 USC 543(a), ((b)(1) (a) preserve the estate (b)(1)deliver any property of debtor to the trustee.
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Leases and Executory Contracts:1 What happens to proceeds from assignment of a lease or contract?
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11 USC 365(f)? They become property of the estate.
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LE:2 Who makes the decision of whether to accept, reject, or assign?
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11 USC 365(a) The trustee decides and the court must approve the decision.
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LE:3 What must a trustee do prior to assignment?
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11USC365(a)-(c) a) cure defaults b) pay any consequential damages c) give adequate assurances of no further defaults.
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LE:4 How many days are available for making the decision of rejection, assumption or assignment?
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11 USC 365 (finish this one)
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LE:5 What are the contractual obligations of a debtor during the GAP period for personal property?
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11 USC 365(d)(5) During the first 60 days after the order for relief, no obligations, but 60 days after the order the obligation to pay rents arises.
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How is equipment described under article 9?
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(missing)
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LE:6 What are the two questions to answer when understanding requirements for assuming a lease or executory contract?
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How long do I have to make up my mind? While I am waiting around, do I the obligee have to fulfill the obligations while I am making up my mind?
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LE:7 What must a trustee cure under 365(b)(1)(A)-(B) proior to assuming an executory contract?
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1) defaults (or adequate assurance that they will be cured) 2) Atty's fees, if they are in the contract not - Penalties/Late fees.
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LE:8 When must adequate assurances against future default be provided?
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11 USC 365 b(1) "If there has been a default . . " (remember 11 USC 365(b) only applies when there has been a default)
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LE:9 What section of the code relieves an assignor of the obligations of a lease after assignement
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11 USC 365(k) Debtor is relieved of these obligations so the lessor is also entitled to adequate assurances that the assignee will be able to fulgill the lease.
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LE:10 - Assignments Will the following language be enforceable: " The store shall not be used by tenant or its successors, assigns, or sublessees for ANY purpose other than a donut shop"
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11 USC 365 (b)(3)(C) Assignments are subject to ALL provisions.
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LE:11 - Applicable Law When may applicable law prevent assignment of an executory contract under the bankruptcy code.
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11 USC 365(c)(1)(A) Applicable law may excuse: 1) a party other than the debtor 2) from accepting performance from or rendering performance to 3) an entity other than DIP 4) Applicable Law excuses performance 5) without consent.
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LE when is a contract executory
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When the contract is so far unperformed on both sides that if either party were to cease performance it would result in a breach.
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Legal Issues in Ch 7:1 How is property distributed in a Ch. 7 case?
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11 USC 726(a) 1) secured creditors in order of 507 2) any allowed unsecured claim 3) interest at the legal rate.
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LI:2 - Exemptions What kind of debtor is entitled to exemptions?
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11 USC 522(b)(1) An individual.
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LI:3 - Exemptions What are the limitations on a Debtor exempting newly acquired property.
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11 USC 522(p)(1) Maximum$125,000 aquired in the preceding 1215 days.
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LI:4 - Exemptions How is a debtor's state of residence determined for BR purposes?
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11 USC 522(b)(3) (fill in)
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