We here at the Global Restructuring & Insolvency Developments (GRID to our friends) have been following the tuition clawback wars for a few years – the cases in which a bankruptcy trustee sues a college to return tuition that the bankrupt parent paid for  their child when the parent was otherwise stiffing other creditors.  It is a textbook constructively fraudulent transfer because the parent(s) do not receive reasonably equivalent value (or anything, for that matter) for the payment of the kid’s tuition.  Our prior coverage is here and here.  (And for those of you who want to really geek out on this, here’s a video of an entire symposium panel on the topic, from our friends at the Emory Bankruptcy Developments Journal.)

Anywho, yesterday the First Circuit decided the long-awaited appeal in DeGiacomo v.

We at the BCLP Global Insolvency and Restructuring Developments (the GRID) continue to watch and cover the growing jurisprudence of trustees seeking to recover pre-petition tuition payments made by a debtor parent to support his or her child’s college education.  Our prior posts can be found here and here.  And in February, the Emory Bankruptcy Developments Journal’s annual symposium will have a panel on this topic (contact me or Lynne, below, in a couple months and we will send you our materials).  Well, the party (or hangover??) continues.

Earlier today, Judge Glenn ruled that a debtor parent does not receive reasonably equivalent value, under either the Bankruptcy Code’s fraudulent transfer provisions or New York’s Debtor and Creditor Law, by paying for a adult child’s college tuition.  The opinion is In re Sterman, and if you have not followed this fascinating effort to transfer

Way back in 2015, we published our first edition of the most comprehensive set of opening questions for your next deposition, including follow up matters, common procedural mistakes in depositions, and the 41 questions to ask about any pertinent document.  The response was positive, which we appreciate!  In light of other depositions of ours over the past three years, and changing practices among business people (including the pervasive use of texts for everything), and more recently, the use of text-and-email-destroying-applications, we gave this list an upgrade, and decided it to publish it again for your use.

We hope you find this useful, time saving, and helpful in getting to the truth of things in your next deposition – it is located here in MS Word so you can drop it into your next deposition script in as much detail as you want.

Check back again in a few weeks –

Editors’ Note:  For those of you who like to get something you can use from blog posts, attached here is a Form PACA Nondischargeability Complaint for a PACA seller against a party that controlled a PACA buyer, where such controlling party later files for bankruptcy.  Although, in light of the case discussed below, there is an open legal question of whether violations of the PACA trust by an individual in control of a PACA buyer result in a non-dischargeable debt under Section 523(a)(4) of the Bankruptcy Code.  To see some of our other coverage of PACA issues, a personal favorite of Leah’s and Mark’s, see here and here.

In Coosemans Miami v. Arthur (In re Arthur), the Bankruptcy Court for the Southern District of Florida held last week that individuals in control of a PACA trust may still receive a bankruptcy discharge of debts arising from their breach

Weird things happen in bankruptcy court. All you high-falutin Chapter 11 jokers out there, cruise down to the bankruptcy motions calendar one day.  You will see sovereign citizen arguments, the increasing problem of unprepared pro se claimants relying on bogus bankruptcy petition preparers, and occasionally, the subject of this post – Chapter 13 debtors seeking court authority to buy a sweet Camaro.

Debtors’ Counsel:  Your Honor, it has 20 inch rims!

The Court:  But is it an IROC?

In In re Jordan, the Bankruptcy Court for the Eastern District of North Carolina addressed a way righteous motion by Chapter 13 debtors to purchase a Camaro.  Not just any Camaro, but the

Happy 2018!  We at The Bankruptcy Cave have been itching to write about the Cherry Growers Chapter 11 case – which really is ground-breaking – but the holidays, life, and yes, work for clients too, all just got in the way.  But with each passing week, the case stayed on our minds.  So now that time permits, here is the writeup – and see below for the remarkable significance of the case.

In re Cherry Growers (now reported at 576 B.R. 569, Bankr. W.D. Mich. 2017), is a garden-variety produce-related bankruptcy case.  (Ha ha, “garden-variety” produce, get it?)  The Debtor bought produce and sold it to others, in addition to conducting other food distribution activities.  When the Debtor filed for bankruptcy, there was the typical push-and-pull between a lender secured by the Debtor’s inventory and a/r, and a supplier claiming a trust interest in those same assets, protected by the

Ok, if your attention span is anything like ours, all this wonky stuff about the ins and outs of the Affordable Care Act (or “ObamaCare,” as most of us know it) causes your eyes to glaze over and makes your mind wander to simpler topics, like who will win Dancing with the Stars, whether the Will & Grace reboot can make it, or how Luke may soon be revealed as the most evil Jedi of all.

But trust us, faithful reader, and you can, in about three short minutes, become a whiz on last week’s latest change to ObamaCare, which we think will lead to a lot more healthcare-related restructuring activity. So here is the 411 on last week’s termination of ObamaCare’s so-called “CSR Subsidies,” and its impact on our precarious, bankruptcy-prone, healthcare marketplace.  All presented to you in easy-to-follow FAQs!

We are all very used to (and very bored of) the on-going debate of what actually constitutes “the media” or “legitimate news.”  In most instances, this sort of debate pits exclusive, Columbia-educated, “proper” journalists against those who have large on-line followings and eschew any association with a Dickensian-era newspaper.  Or, as one story recently summarized it, “Corporate Media Freaks Out at Possibility of Breitbart, Infowars Being Allowed to Ask Questions [in White House Press Conferences],” full story here.

This debate has now, surprisingly, found its way into our arcane little bankruptcy world, with Murray Energy Corporation v. Reorg Research, Inc., 2017 NY Slip Op. 27036 (N.Y. County Sup. Ct., Feb. 14, 2017) (Edmead, J.).  It started with a distressed company called Murray Energy establishing an on-line “data room”

We at the Bankruptcy Cave are not very surprised by the ruling yesterday in Czyzewski v. Jevic Holding Corp.  The Supreme Court in Jevic reviewed a Bankruptcy Court’s decision to approve a settlement (with a distribution of proceeds that contravened the Bankruptcy Code’s priority scheme) in conjunction with dismissing the bankruptcy case of the Chapter 11 debtor Jevic Holding Corp. According to the Bankruptcy Court, because the distributions would occur pursuant to a “structured dismissal” rather than a confirmed plan, the failure to follow the creditor priority scheme did not bar approval.  In short, the Bankruptcy Court did not confirm a plan of reorganization for the Chapter 11 debtor, in which sufficient creditor support can re-order some of the Bankruptcy Code’s priority scheme.  Nor did the Bankruptcy Court convert Jevic’s Chapter 11 case to Chapter 7, in which the Code’s creditor priority scheme can never be changed.