One of the key standards the SSA (Social Security Administration) evaluates when making disability determinations is the presence, type, and severity of a claimant’s disability. To help clarify how the SSA makes its medical judgments, our disability attorneys have been writing a series of disability blog posts about the SSA’s disability guidelines. In the past, […] The post Can I Qualify for Disability Benefits With a Mental Health Issue or Illness? (1680) appeared first on .

Applying for Social Security Disability Insurance (SSDI) benefits is challenging and intimidating. Any small mistake in completing a form could result in your claim being denied. If you failed to provide enough medical documentation, you will probably see a notice of denial in the mail. While this sounds discouraging, it is important to remember that […] The post Help Appealing a Disability Benefits (SSDI) Denial in New Jersey appeared first on .

 New York City restaurants have been hurt by the mandatory closings, reduced operating hours, and outdoor dining requirements imposed by New York State and New York City as a result of the virus.Many restaurants have closed or filed for bankruptcy protection. However, for those that remain open or continue to operate, there may now be some relief thanks to the American Rescue Plan Act, which established the Restaurant Revitalization Fund to provide funding support to restaurants and other eligible businesses. Awards are based on losses incurred as a consequence of the pandemic, calculated as the difference between 2019 and 2020 receipts, less other federal assistance.Restaurants participating in this program can receive up to $10 million per business in compensation for pandemic-related revenue losses, up to a maximum of $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.Who can apply for this relief? According to the SBA, eligible entities who have experienced pandemic-related revenue loss include:RestaurantsFood stands, food trucks, food cartsCaterersBars, saloons, lounges, tavernsSnack and nonalcoholic beverage barsBakeries (onsite sales to the public comprise at least 33% of gross receipts)Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase productsThe above requirements and how to apply can be found at https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fundFor restaurants that remain open and want a second chance at business, the RTF can be a lifeline.The program should reduce the number of restaurants that would have had to close or declare bankruptcy in the future.In addition, this program may give restaurants leverage to renegotiate leases and/or good guy guarantees they previously granted to landlords.The program probably will not help guarantors of leases who have closed and been sued by their landlord. Jim Shenwick   212 541 6224 [email protected]

   The 11th Circuit just recently entered a decision on the liability of credit reporting agencies for continuing to report an obligation owed on a debt discharged in bankruptcy.  In Losch v. Nationwide Mortg. LLC, 2021 U.S. App. LEXIS 12578, Case no. 20-10695 (28 April 2021) the debtor, Losch, initially reaffirmed the mortgage, but rescinded such reaffirmation (with court approval) after the trustee sold the home.  Upon discovering that Esperian was continuing to report a $140,000 balance and that he was delinquent on the mortgage in the amount of $10,000, he contacted the agency to have them correct the issue, but the agency's inquiry with its data furnisher - Nationstar, inaccurately confirmed the prior report.     Losch filed suit under the Fair Credit Reporting Act (FCRA), 15 U.S.C. §1681.  The district court granted summary judgment in favor of Esperian, finding that it's actions were reasonable under 15 U.S.C. §1681e and §1681i, concluding that the statute does not impose any obligation on the credit reporting agency other than notifying the furnisher of the dispute and examining any information the consumer submits.    The 11th Circuit initially concluded that Losch had standing to appeal, which was challenged by Experian asserting that he had not shown damages sufficient to meet the standing requirements.  As noted by the court in Pedro v Equifax, Inc., 868 F.3d 1275, 1279-80 (11th Cir. 2017) a credit report agency's failure to follow reasonable procedures to assure maximum possible accuracy of the information bore a close relationship to the common-law tort of defamation, which was traditionally actionable per-se.  Thus Losch did not need to prove the reporting lowered his credit score, but rather the injury is the false reporting itself.  The credit reports themselves show Experian supplied the report at least 26 times to six entities.  Experian could not verify that these soft inquiries did not result in a creditor receiving the full credit report including the report on Nationstar.   The emotional distress alleged by Losch is a separate concrete injury supporting standing.  Losch testified at deposition and submitted an affidavit that he suffered stress, anxiety, and lack of sleep from the aftermath of the discharge, and that he devoted nearly 400 hours correcting the credit report.    15 U.S.C. §1681e(b) provides that in preparing a consumer report, a reporting agency 'shall follow reasonable procedures to assure maximum possible accuracy' about an individual.   If the completeness or accuracy is disputed by the consumer, the agency shall conduct a reasonable investigation to determine whether the information is accurate.  §1681i(a)(1)(A).  A claim arises under §1681 if the report contained factually inaccurate information, the procedures it took in preparing and distributing the report were not reasonable, and damages followed as a result.   The 11th Circuit initially rejected Experian's argument that the report was not inaccurate, as the bankruptcy discharge is an injunction against certain means of enforcing a debt rather than an expungement of a debt from one's record.  However, as Experian not only reported the existence of the debt, but also the balance owed and the amount past due, as well as how long such amount was past due, such report was inaccurate to support a claim under the statute.     As to the reasonableness of the inquiry undertaken by Experian upon being notified of the error, the court noted that while a reporting agency may initially rely on a data provider (the creditor in this case), once a claimed inaccuracy is pinpointed, an agency needs only to investigate the specific item alleged to be in error.  Experian argued that the unusual facts in this case, an initial reaffirmation, a rescission, and a discharge order which did not specify the mortgage, required more analysis than could be required of the agency.  As Experian failed to even check the bankruptcy docket here, a jury could find it was negligent in discharging its obligation to conduct a reasonable investigation and reinvestigation into the disputed information.  The appellate court did reject Losch's request for damages for a willful violation.  This requires a showing that Experian either knowingly or recklessly violated the FCRA.  Experian's interpretation could reasonably have found support in the courts, as reconfirming the information from the data furnisher prevents a finding of a willful violation.Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com 

Individual chapter 11 reorganization cases often play a role in Entrepreneur Rescue.[1] The Small Business Reorganization Act of 2019 (the “SBRA”) vitalized the process with Subchapter V. Subchapter V provides an expedited, simpler and less expensive route through chapter 11 of the Bankruptcy Code for small businesses and their owners.[2] As we’re often quoted, properly timing any bankruptcy case is essential. Poor timing can result in lost opportunities and higher risks. Properly timing a Subchapter V case is also essential. Mis-timing a Subchapter V case in the Entrepreneur Rescue process can result in ineligibility for Subchapter V and its benefits. Subchapter V and Entrepreneur Rescue Entrepreneur Rescue generally is initiated while the business is winding up. Liabilities are assessed. Non-exempt property is converted to exempt property. Loose ends from the prior endeavor are dealt with. A path forward is charted, Once the business is wound up, its owner may be burdened with debt. A form of bankruptcy relief for the entrepreneur may be considered. If the business owner has assets, a chapter 11 reorganization may be a good strategy. If the business owner has assets and satisfies Subchapter V debt limits, a Subchapter V chapter 11 reorganization could be a better strategy. Timing and a Subchapter V This is where timing becomes tricky. The Bankruptcy Code defines a “small business debtor” as “a person engaged in commercial or business activities.[2]” Some bankruptcy courts interpret this as requiring individuals seeking Subchapter V to have an ongoing business, not as having commercial or business activities which ended before they filed for Subchapter V. Thus, retirees with two closed pharmacies were inclinable for Subchapter V.[3] Similarly, an individual who owned and managed defunct businesses was disqualified from being a Subchapter V debtor.[3] In contrast, some individuals with defunct businesses were deemed qualified for Subchapter V.[4] The result may depend where the case is filed. What This Means to You It means that if: a,) your business is failing; b.) you’re considering closing it or selling it; c.) you are personally responsible for the business’ debts (e.g. guaranties, sale taxes) or have other unmanageable debts; and d.)  you have personal assets which may be exposed to creditors’ collection efforts; you should talk to bankruptcy professional before you close or end your relationship with your business. Discuss appropriate strategies for closing your business and reorganizing yourself using Subchapter V’s benefits and other strategies. Otherwise, closing your business on your own can create new problems and reduce access to useful tools. It’s like when you have a health issue. The sooner you seek professional help, the greater and better your options. This way you can close your business and preserve your access to Subchapter V’s benefits and other options at the same time. Any questions? We’re here to answer them. References 1. Entrepreneur Rescue is the process of preserving and reestablishing entrepreneurs whose ventures were unsuccessful. 2. Subchapter V of chapter 11 offers many advantages to small business debtors. It has a more streamlined process, which translates into less administrative costs. For example, the Debtor does not have to submit a disclosure statement for court approval. It also eliminates some of the most difficult hurdles of chapter 11, like satisfaction of the absolute priority rule. Instead of wiping out the ownership interests in a small business, it merely requires a showing that the debtor is paying its projected disposable income over the life of the plan. But to be able to take advantage of these and other benefits, a debtor must satisfy subchapter V’s eligibility requirements. In re Sullivan, 2021 WL 1250805, at *2 (Bkrtcy.D.Colo., 2021). 2. 11 U.S.C. § 101(51D)(A) 3. In re Thurmon, 2020 WL 7249555 (Bkrtcy.W.D.Mo., 2020) 3. In re Johnson, 2021 WL 825156, at *1 (Bkrtcy.N.D.Tex., 2021). The court also determined that an individual employed as an officer of a non-debtor business without ownership in or ultimate control over that business is disqualified from Subchapter V. 4. See, In re Wright, 2020 WL 2193240 (Bkrtcy.D.S.C., 2020), In re Bonert, No. 2:19-BK-20836, 2020 WL 3635869 (Bankr. C.D. Cal. June 3, 2020), In re Blanchard, 2020 WL 4032411, at *2 (Bkrtcy.E.D.La., 2020). The post Timing Subchapter V And Entrepreneur Rescue appeared first on Wayne Greenwald, P.C..

Summary: CitiMortgage filed the original Proof of Claim in Ms. Bivens’ Chapter 13 case, with the claim subsequently being transferred first to Ditech Financial and then to New Penn Financial, d/b/a Shellpoint Mortgage Servicing. Nearing the completion of her case, … Bankr. M.D.N.C.: Bivens v. NewRez- Misapplication of Payments by Mortgage Servicer Read More »

Summary: Despite its whimsical title, this note takes a rather dim view of the Subchapter V bankruptcies authorized by the Small Business Reorganization Act (“SBRA”), finding particularly problematic the replacement of the Absolute Priority Rule from Chapter 11, which precludes … Law Review: Jonah R. Hall, A Creditor’s Kerfuffle: How the SBRA Harms Creditors in Small Business Cases, 25 N.C. BANKING INST. 595 (2020) Read More »

   In Feldy Boys, LLC v. Polasky (In re Polasky), 221 Bankr. LEXIS 927, Adv No. 2:18-ap-594-FMD (7 April 2021) Judge Delano denied the Debtor-Defendant's request for attorneys fees, but allowed costs of $4,261.03 against the plaintiff.  The adversary proceeding involved a personal guaranty of a lease, and  included counts under §727(c)(d) and (e) as well as §523(a)(5).  Upon prevailing in the adversary itself, the Debtor sought taxation of fees in the amount of $95,970 under §57.105(7) of the Florida Statutes, as the guaranty provided for reimbursement to plaintiff of fees and expenses.  The Court first examined which state's law applies as to taxation of fees to prevailing parties.    The guaranty did not include a choice of law provision.  In determining which state's choice of law provisions to apply, court's use the choice of law rules of the state where the court sits, absent a compelling or significant federal interest.1  Florida's choice of law rule in contract cases is, in the absence of a choice of law provision in the contract, and excluding contracts for performance of services, the law of the state where the contract is made applies.  As to tort cases, the rule is the 'significant relationship' test, the state which has the most significant relationship to the occurrence and the parties.  As the lease at issue was executed in Ohio, the property at issue is located in Ohio, Debtor resided in Ohio when she entered the lease, and the relevant corporations which were parties to the lease were Ohio corporations, and the lease that was guaranteed provided that it would be construed under Ohio law.  Thus the court found that Florida choice of law provisions would determine that Ohio law would apply in determining the right to prevailing party fees.  Under Ohio law parties to litigation are responsible to pay their own fees absent a statutory provision to the contrary, where there has been a finding of bad faith, or where the contract provides for fee shifting.  As there was no provision in the lease or guaranty providing for the losing party to pay the prevailing party's fees, and Defendant did not cite any fee-shifting statute or allege bad faith, the Court denied the request for taxation of fees.  However the court found that the Debtor was entitled to reimbursement of costs under Rule 7054(b)(1) of the Fed. R. of Bankr. Proc.  This rule allows costs to the prevailing party except where a statute of the United States or the Rules provide to the contrary.  The costs allowed under such rule are listed in 28 U.S.C. §1920.  The court noted a 'strong presumption' in favor of awarding costs to the prevailing party in such suits, unless such costs are not within those allowed under §1920, were not reasonably necessary to the litigator, or the losing party is unable to pay.2    The costs sought by the Debtor included fees paid to transcribe the meeting of creditors, the Rule 2004 examinations of Debtor and her spouse, the deposition of Plaintiff's representative, the depositions of two real estate agents, and the two day trial.  Debtor attached invoices for each of these transcripts.  Fees for transcripts is an allowed expense under §1920.  While some of the transcripts were obtained prior to the filing of the complaint, the court found that such transcripts were obtained with a view to defending Plaintiff's claims against her.    The court denied the request for fees but allowed the request for costs in the amount of $4,261.03.Parties need to be aware that they may well be required to pay the debtor for their costs if they fail to prove their case, either under 11 U.S.C. 523(d) in the case of a complaint filed under §523(a)(2); or §57.105(7) for cases where Florida law determines taxation of fees to prevailing parties; or costs under the statutes cited in this case; and factor this risk into any decision to file an adversary proceeding against a Debtor.  1 In re Palm Beach Finance Partners, L.P., 2014 Bankr. LEXIS 5418, 2014 WL 12498025 (Bankr. S.D. Fla. 2014).↩2 In re Amodeo, 2019 Bankr. LEXIS 4108, 2019 WL 10734046, at *4 (Bankr. M.D. Fla. 2019).↩Michael Barnett, Esq.Michael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com  

A Bankruptcy Trustee may not recover payments made to a landlord concerning commercial rent arrears or to a supplier, on or after March 13, 2020, resulting from workouts before the bankruptcy filing,  under new Section 547(j) of the Bankruptcy Code.   These changes were made pursuant to the Consolidated Appropriations Act of 2021.  Congress made these changes to the bankruptcy code in an effort to encourage commercial landlords and suppliers to engage in workouts with tenants and customers due to the pandemic, by mandating that these payments would not be deemed preferential, if they were made after March 13, 2020.  The new law will remain in effect for two years, ending on December 27, 2022.  These changes to the law will prevent Chapter 7 bankruptcy trustees from commencing preference actions against commercial tenants or suppliers that meet the above requirements of the law. My Law Firm has been involved in many workouts where our clients have raised the issue of whether accommodations given to debtor(s) can be recovered by bankruptcy trustees if those debtors later file for Chapter 7 bankruptcy.  Although the bankruptcy code did provide defenses before the law change, such as the ordinary course of business and/or the new value exception to a preference, these law changes now provide certainty against preference actions in these types of workouts. If you have questions regarding preference actions, you should contact Jim Shenwick at (212) 541-6224 or [email protected] discuss the facts or strategies involved in those cases.     

Summary: Pangea obtain an arbitration award against Mr. Lakian, who, on that same day, transferred his interest in real property located in Highlands, North Carolina, to the Eagle Ridge Living Trust, for which he was a trustee. Following confirmation of … N.C. Ct. of App.: Pangea Capital v. Lakian- Property Must be Residence for Homestead Exemption Read More »