Bankr. M.D.N.C.: In re Reid — Willful Stay Violations, Real Harm, and an Anemic Damages Award Ed Boltz Wed, 02/04/2026 - 14:53 Summary: In In re Reid, the Bankruptcy Court for the Middle District of North Carolina found that Modern Rent to Own willfully violated the automatic stay through a sustained campaign of post-petition collection calls and texts directed at a Chapter 7 debtor who was proceeding pro se. The factual record was not close: more than 100 voicemail calls and over 50 text messages, continuing after repeated actual notice of the bankruptcy filing, and accompanied by statements that collection would continue regardless. The Court had little difficulty finding a willful violation of § 362(a) and entitlement to relief under § 362(k). The facts matter. Ms. Reid testified—credibly and unrebutted because Modern Rent to Own couldn't have been bothered to send an attorney to represent it—that the barrage of calls left her voicemail unusable, caused her to miss medical communications, and directly interfered with her ability to obtain childcare work that depends on phone notifications. The Court accepted that these harms were real and caused by the stay violations. Still, because Ms. Reid could not precisely quantify her damages, the Court awarded $1.00 in nominal compensatory damages and $5,000 in punitive damages. Pro se posture cuts both ways The Court explicitly acknowledged that Ms. Reid’s pro se status contributed to the difficulty in quantifying actual damages. That acknowledgment is important—but it also highlights a recurring, uncomfortable pattern: damages for stay violations often seem lower when the debtor is represented by counsel, as if courts assume that having a lawyer somehow cushions or mitigates the real-world impact of illegal collection activity. That assumption is hard to square with reality. Harassment is harassment whether or not a debtor has counsel on speed dial, and the automatic stay protects people, not just legal theories. The Lyle comparison problem The Court relied heavily on In re Lyle (E.D.N.C.), where $100 per call for 540 illegal calls yielded $54,000 in punitive damages. Yet here—despite evidence of over 150 separate communications (calls plus texts)—the punitive award was capped at $5,000. The Court characterized this as a “moderate” award sufficient for deterrence, but the comparison raises eyebrows. If $100 per call was appropriate in Lyle, why is a fraction of that amount sufficient here, particularly where the conduct persisted after repeated notice and the creditor did not even appear to defend itself? Statutory damages as a missed benchmark Bankruptcy courts often say they are not bound by other consumer protection statutes when fashioning § 362(k) remedies. That may be true—but they can still look to those statutes for guidance. At a minimum, statutory damages frameworks provide a reality check for deterrence. North Carolina’s UDTPA (N.C.G.S. § 75) allows up to $4,000 per violation in statutory damages. The Telephone Consumer Protection Act (TCPA) provides $500 per improper call or text, escalating to $1,500 per violation for knowing or willful offenses, with no overall cap Under the TCPA alone, 150 willful violations × $1500 = $225,000 in statutory damages—an amount Ms. Reid could still plausibly pursue in a supplemental federal action. Against that backdrop, a $5,000 punitive award for serial, knowing stay violations looks less like deterrence and more like a cost of doing business. “But that could bankrupt the creditor…” The predictable response is that larger awards could devastate a small creditor like Modern Rent to Own (or its owner and manager personally). That concern rings hollow in bankruptcy court. Courts routinely grant creditors relief from the automatic stay—with devastating consequences to debtors—for far more innocent conduct, such as missing payments. If bankruptcy courts are comfortable imposing life-altering consequences on consumers for defaults, they should be equally comfortable imposing meaningful consequences on creditors who deliberately ignore federal law.  Instead,  a $5,001  award is, as Jamie Dimon once explained to Sen. Elizabeth Warren saying "So hit me with a fine. We can afford it" , instead just a minor cost of doing business (illegally). A reporting obligation worth remembering Finally, this is exactly the sort of case that should not disappear into the electronic ether. 28 U.S.C. § 159(c)(3) requires clerks to report “cases in which creditors were fined for misconduct and any amount of punitive damages awarded by the court for creditor misconduct.” That obligation is too often overlooked. This decision belongs on that list—not just for transparency, but to reinforce that the automatic stay is not optional and for the possibility (however infinitesimal) that Congress will realize the frequency and scope of illegal behaviors by creditors is much worse than the misdeeds of debtors. Bottom line: In re Reid gets the law right on liability but undershoots on remedies. If punitive damages are meant to deter, courts should be willing to look beyond internal bankruptcy comparisons and take seriously the statutory damage regimes that Congress and state legislatures have already deemed appropriate for this very kind of conduct.   To read a copy of the transcript, please see: Blog comments Attachment Document in_re_reid.pdf (703.87 KB) Category Middle District

Law Review: Littwin, Angela and Adams, Adrienne and Kennedy, Angie, Ineffective Legal Relief for Coerced Debt: The Failure of Divorce and Debtor-Creditor Law to Address Debt Created by Domestic Violence (December 01, 2025). Ed Boltz Tue, 02/03/2026 - 15:54 Available at: https://ssrn.com/abstract=6023874 or http://dx.doi.org/10.2139/ssrn.6023874   Abstract: Coerced debt occurs when the abusive partner in a relationship characterized by domestic violence (DV) uses fraud, coercion, or manipulation to incur debt in the DV survivor’s name. For example, abusers may fraudulently open credit cards in their partners’ names or coerce their partners into refinancing their homes. Prior research has shown that coerced debt may be a common problem that negatively impacts DV survivors’ lives by damaging credit scores and imposing barriers to leaving abusive relationships. This manuscript presents data from the first in-depth study of coerced debt, Debt as a Control Tactic in Abusive Marriages, funded by the National Science Foundation.1 Our research team interviewed 116 recently-divorced women with coerced debt. A key research aim was to evaluate the effectiveness of legal relief for coerced debt. We analyzed participants’ experiences with divorce and studied three options under debtor-creditor law: unauthorized use in the Truth in Lending Act, the Texas statute of limitations, and bankruptcy. We found these options for legal relief for coerced debt to be highly ineffective. The failure of existing legal remedies underscores the importance of ongoing advocacy for legal reform. This article—Ineffective Legal Relief for Coerced Debt: The Failure of Divorce and Debtor-Creditor Law to Address Debt Created by Domestic Violence—by Littwin, Adams, and Kennedy, reports on a National Science Foundation–funded study examining how coerced debt is created and, more importantly, how poorly the legal system responds to it. The study interviewed 116 women who had recently divorced abusive husbands and identified over $12.5 million in coerced debt, with a median of roughly $22,000 per participant. The authors then examined whether commonly assumed remedies actually help: Divorce law fails because family courts cannot bind creditors. Even when divorce decrees “assign” debt to the abuser, survivors remain contractually liable. Indemnification provisions offer cold comfort, often increasing post-divorce conflict and risk. Unauthorized use doctrines under the Truth in Lending Act help only a small fraction of debts, particularly because creditors often demand police reports—something many survivors reasonably fear. Statutes of limitation are almost entirely illusory as relief. Bankruptcy, while theoretically powerful, is often inaccessible due to cost and remains unacceptable to many survivors despite awareness of its existence. Using a framework of availability, accessibility, and acceptability, the authors find that fewer than one in ten coerced debts could realistically be resolved through existing debtor-creditor law. The article ends with a call for reform, including broader recognition of coerced debt and stronger statutory protections. Commentary: This is an important paper, and not just for academics. It should be required reading for domestic-violence advocates and divorce attorneys—and, frankly, for bankruptcy lawyers who don’t routinely think about IPV and coercion. One of the article’s most striking findings is not simply that legal remedies fail, but why they fail. Survivors often do not pursue relief because the systems meant to help them are expensive, frightening, culturally incompetent, or actively dangerous. That rings true. But there is another layer here that deserves more attention: there is a deep and persistent ignorance about bankruptcy among the very professionals most likely to encounter coerced debt first. That ignorance exists not only among laypeople—who understandably don’t know what they don’t know—but also among DV advocates and divorce lawyers. Many harbor a reflexive aversion to bankruptcy, viewing it as a moral failure, a last resort, or something that will “ruin” a survivor’s life. Some divorce attorneys are also understandably concerned that a bankruptcy might discharge unpaid attorney’s fees. The result is that bankruptcy is often never seriously discussed, even when it is the most effective—and sometimes the only—tool available. I saw a version of this long before I ever became a bankruptcy lawyer. In 1998, fresh out of law school, I worked on an acrimonious divorce where the only contested issue was about $20,000 in joint credit-card debt. No assets. No children. Each party ultimately spent more than $3,000 in legal fees fighting over which of them would be “responsible” for debts that the credit-card companies were never going to release either of them from anyway. Even back then, they could have filed a joint bankruptcy for under $1,000 total and moved on with their lives. Instead, they paid lawyers to argue over a legal fiction. Multiply that dynamic by coercive control, fear of retaliation, and financial abuse, and you begin to see how perverse the system becomes. Divorce Courts, Contracts, and Bankruptcy’s Missing Seat at the Table The authors correctly note that divorce courts cannot shift contractual liability from an abused debtor to an abuser without running headlong into constitutional problems—namely, interference with private contracts. At best, courts can order indemnification. At worst, they do nothing. Bankruptcy, however, sits in a different constitutional posture. Congress can impair contracts, and it has done so for over two centuries. Used thoughtfully and in coordination with divorce proceedings, bankruptcy could solve problems that family courts simply cannot. That said, there is a real tension here. Actually shifting liability to an abuser—outside of bankruptcy—may increase the risk of further abuse and may also deplete the abuser’s resources, impairing child support or alimony. A more realistic (if underexplored) option may be placing the abuser into an involuntary bankruptcy, liquidating non-exempt assets to pay creditors, and discharging the remaining debts for both parties. It’s not a silver bullet, but it is at least a tool worth discussing—something divorce courts and DV advocates rarely do. North Carolina Law: Existing Tools and Promising Reform North Carolina debtors already have some protection. The North Carolina Identity Theft Protection Act, N.C.G.S. § 75-60 et seq., can apply to certain coerced debts, though it is far from comprehensive. More promising is the proposed Coerced Debt Relief Act, S. 650 (2025–2026), introduced by Mujtaba A. Mohammed. That bill would directly recognize coerced debt and provide clearer remedies. It closely tracks the National Consumer Law Center Model State Coerced Debt Law, which should be the baseline for reform nationwide. Bankruptcy, Student Loans, Vehicle Cram-Down and Missed Opportunities The paper’s discussion of bankruptcy is careful but incomplete. In evaluating student loan discharge, the authors do not meaningfully account for the Department of Justice’s Student Loan Adversary Proceeding (SLAP) guidance. As other scholars—including Pang and Iuliano—have shown, that guidance has substantially increased the likelihood of discharge, albeit with additional legal costs. Facts demonstrating abuse, long-term impacts of that abuse, and coercion in taking on student loans would carry significant weight under the DOJ SLAP framework—and likely even with the most recalcitrant bankruptcy judges. Similarly, the authors correctly note that BAPCPA curtailed vehicle cram-downs in Chapter 13. But the infamous  “Hanging Paragraph” in § 1325(a)(5)(*) applies only to motor vehicles “acquired for the personal use of the debtor” within 910 days. A serious argument can be made that a vehicle acquired through coercive debt—even one driven by the survivor—was in reality acquired by, through and for the abuser. That argument has not been tested nearly enough. Awareness Is Up. Acceptability Is Not. One underappreciated finding in the study is that over 90% of participants were at least aware of bankruptcy as a concept. That is a quiet triumph of access to justice—and yes, a vindication of consumer bankruptcy attorneys whose advertising is often sneered at by “tall-building” lawyers, judges, and academics. But awareness is not acceptability. Bankruptcy remained “not at all acceptable” to a majority of participants. That gap can be closed—but only if DV advocates, divorce lawyers, and bankruptcy attorneys start talking to each other, cross-training, and presenting bankruptcy not as failure, but as relief. Lastly,  while certainly accurate that access to legal solutions for coerced debt are often limited by the expense of attorneys fees (which in the consumer bankruptcy attorneys are nonetheless far, far more reasonable than nearly any other type of lawyer- as evidence by the fact that white shoe law firms never take on consumer cases),  more  thought and effort needs to be expended on finding solutions for this conundrum.  This includes options for low-cost attorney fee only Chapter 13 cases  (as allowed in the MDNC)  or ideas,  such as being considered by the National Bankruptcy Conference and Rep. J.  Luis Correa (D-CA),  for attorney fees to be paid after the filing of a Chapter 7 under court supervision (those two options are,  in essence,  identical),  ideas for increasing access to justice while maintaining the high quality of representation (since creditors and abusers aren't ever going to ease up) is vital. Until then, coerced debt will remain what this article so clearly shows it to be: another weapon of abuse, enabled by a fragmented and deeply siloed, limited and inaccessible legal system.     With proper attribution,  please share. To read a copy of the transcript, please see: Blog comments Attachment Document ineffective_legal_relief_for_coerced_debt_the_failure_of_divorce_and_debtor-creditor_law_to_address_debt_created_by_domestic_violence.pdf (1.09 MB) Category Law Reviews & Studies

N.C Bus. Ct.: State of North Carolina v. MV Realty: When “Covenants Running with the Land” Turn Out to Be Pure Fiction Ed Boltz Mon, 02/02/2026 - 16:03 Summary: In State ex rel. Jackson v. MV Realty PBC, LLC, the North Carolina Business Court granted sweeping partial summary judgment in favor of the Attorney General, holding that MV Realty’s Homeowner Benefit Agreements (“HB As”) were the product of multiple unfair and deceptive trade practices under Chapter 75. At bottom, MV Realty’s business model was simple—and abusive. Homeowners were paid a few hundred or a few thousand dollars up front in exchange for signing a 40-year exclusive real estate brokerage agreement, backed by draconian “early termination fees,” threats of litigation, and—most critically—the recording of memoranda falsely claiming that these obligations were covenants running with the land. The court had little trouble concluding that this scheme was unlawful. The Business Court ruled, as a matter of law, that: The HB As were personal services contracts, not real covenants, and therefore could not “touch and concern” the land. Recording memoranda asserting otherwise created a false cloud on title, constituting an unfair and deceptive trade practice. MV Realty’s routine filing of lis pendens in breach-of-contract suits seeking only money damages was improper and deceptive. The so-called “Early Termination Fees” were unenforceable penalties, not valid liquidated damages. MV Realty also violated North Carolina’s Telephone Solicitation Act through massive robocalling campaigns and calls to numbers on the Do-Not-Call Registry without provable consent. In short, the court dismantled the legal scaffolding MV Realty relied upon to intimidate homeowners and lock them into long-term obligations they neither understood nor could realistically escape . Commentary: This opinion has practical impact for consumer bankruptcy attorneys, mortgage lawyers (both sides),  bankruptcy trustees,  title examiner, and any court confronting attempts to repackage predatory contracts as “real property interests.” It is also a roadmap for how the Attorney General can—and should—ensure that these findings remain effective notwithstanding bankruptcy filings. 1. Why This Matters in Consumer Bankruptcy Cases For bankruptcy practitioners, the most important takeaway is the court’s unequivocal holding that MV Realty’s agreements do not create property interests. That matters because: There is no valid lien. There is no covenant running with the land. There is no secured claim. There is, at most, a disputed unsecured claim for breach of a personal services contract, and even that claim is undermined by the court’s ruling that the ETF is an unenforceable penalty. Practically, this gives debtor’s counsel several powerful tools: Claim objections: Any proof of claim asserting secured status, lien rights, or damages based on an ETF should be objected to aggressively. Lien avoidance and declaratory relief: If memoranda remain of record, debtors can seek declaratory relief confirming that no enforceable interest exists. Stay and discharge enforcement: Post-petition or post-discharge collection efforts premised on these agreements are fertile ground for stay-violation and discharge-violation litigation. Chapter 13 treatment: Even if a claim survives as unsecured, it is subject to ordinary plan treatment—and likely to receive pennies, if anything. Equally important is the court’s emphasis on consumer sophistication. The Business Court repeatedly highlighted the imbalance between MV Realty and individual homeowners. Bankruptcy courts, which see this imbalance every day, should take note. 2. Using This Opinion Affirmatively for Debtors Consumer attorneys, both in bankruptcy cases and elsewhere,  should not treat this decision as merely defensive. It can be used affirmatively to: Reassure hesitant homeowners that bankruptcy will not “lock in” these agreements. Push back against title insurers or closing attorneys who still fear recorded memoranda. Support motions to reopen cases where debtors paid ET Fs prepetition under coercion. Bolster fee applications in cases where significant work is required to unwind these abusive contracts. This is also a rare case where a state court UDTP ruling directly strengthens bankruptcy outcomes, rather than existing in a silo. 3. The Attorney General’s Role Going Forward—Including in Bankruptcy The opinion also raises an important structural question: how does the State ensure these protections are not diluted by bankruptcy proceedings? There are several answers. First, the AG should continue to assert that: Actions to enforce Chapter 75, including injunctive and declaratory relief, fall squarely within the police and regulatory power exception to the automatic stay. Findings that the memoranda are false and deceptive are not dischargeable “claims,” but regulatory determinations that bind successors and bankruptcy courts alike. Second, in any future bankruptcy (its previous bankruptcy having been dismissed  on May 24, 2024, via an order in the U.S. Bankruptcy Court for the Southern District of Florida) involving MV Realty or related entities, the AG should insist that: No plan or settlement may revive or recharacterize HB As as property interests. No sale “free and clear” can launder unenforceable interests into something marketable. Any attempt to monetize these agreements is inconsistent with North Carolina public policy as articulated by the Business Court. Third—and critically—the AG should coordinate with consumer bankruptcy trustees and debtor’s counsel to ensure that these rulings are actually enforced at the household level, not just preserved in reported decisions. 4.  Practice Note for Chapter 7 Trustees: Avoidance and Estate-Value Opportunities Although this opinion arises from a state enforcement action, it provides Chapter 7 trustees with a ready-made roadmap for avoidance actions that directly benefit unsecured creditors—and, incidentally, clean up the damage inflicted on consumer debtors.(I know, I know-  it goes against the very nature of Chapter 7 trustees to do anything that might help consumer debtors,  but perhaps their own pecuniary interest might override that aversion.) Most importantly, the Business Court’s holding that MV Realty’s memoranda did not create covenants running with the land supports the conclusion that the recorded “liens” were void ab initio, not merely avoidable. Trustees can rely on this finding in exercising their § 544(a) strong-arm powers, both to defeat asserted secured claims and to clear title where sale proceeds were reduced or diverted based on a false encumbrance. The Court’s ruling that the Early Termination Fees were unenforceable penalties also tees up classic preference (§ 547) and constructive fraudulent transfer (§ 548) claims where homeowners paid ET Fs or settlement amounts prepetition. Payments extracted under a legally void penalty, particularly from insolvent consumers, are difficult to defend as reasonably equivalent value and often result in the recipient receiving more than it would in a Chapter 7. Finally, where sale proceeds were escrowed, withheld, or paid under threat of an asserted lien, trustees should consider § 542 turnover and, in appropriate cases, § 544(b) actions grounded in the underlying Chapter 75 violations. Framed correctly, these are not debtor-relief cases—they are estate-value recovery actions that prevent a predatory creditor from leaping ahead of legitimate unsecured creditors. 5.  The Bigger Picture This case fits into a broader and increasingly familiar pattern: financial actors attempting to extract long-term value from homeowners by skirting traditional lending, brokerage, and consumer-protection rules, then trying to dress those arrangements up as “innovative” real estate products. The Business Court was not fooled. Nor should bankruptcy courts be. For consumer bankruptcy attorneys, this opinion is both a sword and a shield. For the Attorney General, it is an opportunity—and an obligation—to ensure that bankruptcy does not become the place where unlawful business models go to be quietly resuscitated. And for homeowners who were told they had “no way out,” it is a long-overdue reminder that North Carolina law still draws a sharp line between legitimate contracts and predatory fiction. A Final Note of Congratulations This decision also warrants a well-deserved tip of the hat to Jeff Jackson and the North Carolina Department of Justice team that brought and litigated this case with persistence and clarity of purpose. Brian Rabinovitz and Asa Edwards, in particular, deserve recognition for translating complex real-estate and consumer-protection law into a compelling case that exposed this scheme for what it was. Asa’s recent transition from the North Carolina consumer bar to public service only underscores the depth of practical experience brought to bear here. This win stands squarely in the long and proud tradition of North Carolina Attorneys General taking an active, progressive role in defending consumers and protecting the integrity of the marketplace—and it will have lasting ripple effects well beyond this single case. With proper attribution,  please share. To read a copy of the transcript, please see: Blog comments Attachment Document state_ex_rel._jackson_v._mv_realty.pdf (348.26 KB) Category NC Business Court

E.D.N.C. (and Jones Cty. Sup. Ct.): Carolina Lease Management, Rent-to-Own Sheds, and the End of the “Executory Contract” Fairy Tale Ed Boltz Fri, 01/30/2026 - 16:15 Summary: The Bland and Greene class actions against Carolina Lease Management Group, LLC are now fully and finally resolved. Together, they represent one of the more consequential pieces of consumer litigation in North Carolina in recent years — not only because of the millions of dollars recovered and debt cancelled, but because of what they say, loudly and clearly, about how “rent-to-own” contracts actually work in substance, not just in name. For bankruptcy lawyers, especially those handling Chapter 13 cases, these cases should be required and inspirational  reading. Calling a Sale a Lease Doesn’t Make It One At the heart of both cases was a simple premise: You don’t get to avoid consumer-credit laws by calling a retail installment sale a lease. Carolina Lease Management leased portable storage sheds to North Carolina consumers under standardized “rent-to-own” contracts. The plaintiffs alleged — persuasively enough to drive a global settlement — that these agreements were retail installment sales in disguise, and that CLM: Failed to comply with North Carolina’s Retail Installment Sales Act (RISA); Engaged in unfair and deceptive trade practices under Chapter 75; and Used unlawful debt collection practices to collect amounts not legally owed. This was not about a few bad contracts. It was about uniform documents and uniform practices, applied statewide, to thousands of consumers. After years of hard-fought litigation in both state and federal court, including an appeal to the Fourth Circuit, the cases settled on a global basis: $8 million total settlement across the two actions; Over $600,000 in alleged debt cancelled; Cash distributions to thousands of class members; No claims process; and Zero opt-outs. Zero objections. That last point matters. Why This Matters in Consumer Bankruptcy Cases What makes these cases especially important is what they undercut in bankruptcy court. Anyone who files consumer cases in North Carolina has seen this move: A rent-to-own shed creditor files a proof of claim insisting that the contract is an executory lease, not a secured claim, and certainly not unsecured. The implication is always the same — assume it or else. The Bland / Greene litigation blows a hole straight through that strategy. If these contracts are retail installment sales, then in bankruptcy: They are not executory contracts within the meaning of § 365; The creditor is not a lessor, but a seller or financier; The claim is subject to § 506 valuation; and In Chapter 13, the debt is potentially crammable. That is not an academic distinction. It is the difference between: Forcing a debtor to cure and maintain an inflated “lease” payment; or Treating the claim like what it actually is — often a low-value secured claim with a large unsecured tail, or in some cases simply an unsecured claim. Portable sheds depreciate quickly. Their resale value is often minimal. Once stripped of the “executory lease” label, many of these claims collapse under ordinary Chapter 13 analysis. Not Just Carolina Lease Management And this is the point that bankruptcy lawyers should not miss: This is not just a Carolina Lease Management problem. The rent-a-shed industry relies on: Standard form contracts; Identical “rent-to-own” language; The same semantic dodge — this is a lease, trust us. The reasoning that drove these settlements is portable. It applies just as readily to other shed companies, portable building sellers, and rent-to-own personal property creditors operating in North Carolina. Expect to see these issues raised more often: Objections to executory-contract treatment; Challenges to secured status; Defensive use of RISA, UDTPA, and DCA violations in bankruptcy cases; and Chapter 13 plans that cram these claims down to reality. As it should be. Credit Where It Is Due This result did not happen because the law was easy or obvious. It happened because of exceptional lawyering. Adrian Lapas of Goldsboro, along with Charles Delbaum and Jennifer Wagner of the National Consumer Law Center, deserve enormous credit for what they achieved here. These cases involved: Novel issues of statutory interpretation; Years of contested discovery; Aggressive defense by well-funded defendants; Appellate risk; and The very real possibility that consumers would recover nothing if the litigation failed. Instead, they delivered cash, debt cancellation, and structural change — the kind of result that actually matters in consumers’ lives. For North Carolina consumers — and for the bankruptcy lawyers who represent them every day — this was consumer advocacy done right. The Takeaway for Bankruptcy Practitioners If you see a rent-to-own shed claim in a Chapter 13 case and your first instinct is “executory contract”, it may be time to slow down. The lesson of Bland and Greene is simple: Substance still matters. Labels don’t control. And calling a sale a lease doesn’t make it one. That’s a lesson worth enforcing — in bankruptcy court and beyond. See previous posts at: 4th Cir.: Bland v. Carolina Lease Management Group Statute of Limitations for UDTPA  E.D.N.C.: Bland v. Carolina Lease Management- Preliminary Approval of Class Action Settlement against "Rent-A-Shed" Companies With proper attribution,  please share. To read a copy of the transcript, please see: Blog comments Attachment Document bland_v._carolina_lease_management_1.pdf (654.33 KB) Document in_re_johnson_571_b.r._167_bankr_ednc_2017.pdf (519.56 KB) Document greene_v._carolina_lease_management.pdf (5.44 MB) Category Eastern District

​Bankr. W.D.N.C. (& kinda M.D.N.C.): Trustee’s Ponzi-Scheme Fraud Claims Survive Motion to Dismiss (and Live to Fight Another Day) Ed Boltz Thu, 01/29/2026 - 17:03 Summary: In Hayes v. Total Equipment & Rental of El Paso, LLC, Adv. No. 25-03074 (Bankr. W.D.N.C. Jan. 23, 2026), the Chapter 7 trustee cleared the first—and often most important—procedural hurdle: keeping his fraudulent-transfer case alive past Rule 12(b)(6). In a thorough memorandum opinion denying the defendant’s motion to dismiss, the Court held that the trustee plausibly pled actual and constructive fraudulent transfer claims under both North Carolina and South Carolina law, as well as related claims under §§ 502(d) and 510(c). The setup. The debtor, Applied Machinery Rentals, LLC, was allegedly nothing more than a vehicle for a classic Ponzi scheme run by its principal, involving nonexistent or double-pledged telehandlers, sale-out-of-trust transactions, and “rent” payments that functioned as disguised investments. The trustee targeted two prepetition transfers totaling $150,000 made in early 2020, transfers that were undocumented, oddly round-numbered, and purportedly tied to equipment that may not have existed at all. No ‘shotgun pleading’ escape hatch. The defendant first argued that the trustee’s complaint should be tossed as an impermissible “shotgun pleading” because it grouped multiple causes of action into a single count. The Court was unimpressed. The touchstone is notice, not aesthetic pleading preferences, and the motion itself demonstrated the defendant understood exactly which claims were being asserted. That argument died quickly. Choice-of-law fights belong to discovery, not dismissal. On the more substantive issues, the Court refused to short-circuit the case with a premature choice-of-law ruling. Applying North Carolina choice-of-law principles and the UVTA’s location-of-the-debtor framework, the Court held that determining whether North Carolina or South Carolina law governs requires a fact-intensive inquiry into where the debtor’s places of business and chief executive office were located. At the pleading stage, the trustee’s allegations—that the debtor was run from North Carolina and South Carolina by a single principal—were more than enough. Actual fraud: Ponzi presumptions still matter. For actual fraudulent transfer claims, the alleged existence of a Ponzi scheme did real work. Under South Carolina’s Statute of Elizabeth and analogous North Carolina principles, the Court held that the trustee plausibly alleged not only fraudulent intent by the debtor, but facts sufficient to impute that intent to the transferee—either through knowledge or circumstances that would have put a reasonably prudent party on inquiry notice. Undocumented six-figure transfers, whole-number amounts, and a total lack of business explanation were enough to get past dismissal. Constructive fraud: ‘Reasonably equivalent value’ isn’t magic words. The Court also rejected the argument that the trustee failed to plead constructive fraud because he didn’t incant the precise phrase “no or nominal consideration.” What matters are facts, not labels. Allegations that the trustee could discern no basis for the transfers, that the transactions lacked documentation or business purpose, and that they mirrored other fraudulent conduct sufficed to plausibly allege a lack of value. Claims allowance consequences remain in play. Because the fraudulent transfer claims survived, so too did the trustee’s § 502(d) disallowance and § 510(c) equitable subordination theories. The defendant effectively conceded as much at the hearing. Commentary: This is not a merits ruling, but it is an important reminder that well-pled trustee complaints—especially those grounded in Ponzi-scheme allegations—are not easily dispatched at the pleading stage. Courts remain reluctant to resolve fact-heavy issues like choice of law, intent, and value on a cold record, and rightly so. And finally, a brief sarcastic aside: because this opinion was authored by Judge Benjamin Kahn of the Middle District of North Carolina, sitting by designation in the Western District, lawyers from the Eastern District can, in the grand tradition of parochialism in the bankruptcy courts, take comfort in having two perfectly respectable reasons to ignore it entirely. With proper attributions,  please share. To read a copy of the transcript, please see: Blog comments Attachment Document hayes_v._total_equipment.pdf (560.48 KB) Category Western District

 The Saks, Bergdorf Goodman, Neiman Marcus Bankruptcy Filing and the Case of the Missing or Incomplete Consignment AgreementMany clients have contacted my law firm explaining that they are in the jewelry business and shipped jewelry, diamonds, or other high-value items to Saks on a “consignment” basis. When I ask for the Consignment Agreement, what I usually receive—if anything at all—is a receipt or invoice stamped “Consignment” in the upper right-hand corner. I then ask for a copy of the UCC-1 financing statement and the PMSI notice sent to other inventory secured creditors, and I am often met with a glazed look and the response: “That’s not how it’s done on 47th Street.”Unfortunately, in a Chapter 11 case, custom and practice do not trump the Uniform Commercial Code.Under UCC Article 9, perfected consignments are treated as secured transactions.If the consignment is not properly perfected, the goods are deemed property of the bankruptcy estate and are subject to the claims of the debtor’s other creditors including secured  inventory lenders, DIP lenders and the Bankruptcy Trustee. The consignor, instead of being a secured creditor, is treated as a general unsecured creditor.Article 9 does provide the consignor with a PMSI in consigned inventory—but only if it is properly perfected.This generally requires filing a UCC-1 financing statement and sending timely PMSI notices, before delivery of the goods, with renewals every five years. In Chapter 11, secured creditors are typically paid far more than unsecured creditors, making these steps critical.Creditors involved with the  Saks, Bergdorf Goodman, Neiman Marcus bankruptcy filing with questions about the treatment of their claims or consignment agreements should contact Jim Shenwick, Esq. Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15mPlease click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minShenwick & Associates116 Plymouth DriveScarsdale, NY 10583Work: 917-363-3391Bankruptcy & Creditor Rights

S. Ct.: ​Coney Island Auto Parts v. Burton — Why “boring” bankruptcy cases (that are barely about bankruptcy) still matter Ed Boltz Wed, 01/28/2026 - 15:44 Summary: At first glance, Coney Island Auto Parts Unlimited, Inc. v. Burton, which may be the annual "Kumbaya" bankruptcy"  case that Supreme Court Justices took to try and be (mostly) unanimous before the acrimony of the rest of its docket sets in, looks like a fairly pedestrian procedural dispute—one that barely seems to belong in the bankruptcy canon at all. It is, after all, a civil-procedure case about Rule 60(b)(4), default judgments, and whether a motion to set aside a “void” judgment must still be brought within a reasonable time. The Supreme Court’s answer was a firm yes: Rule 60(c)(1)’s reasonable-time requirement applies even when the judgment is alleged to be void for lack of proper service. The Sixth Circuit was affirmed, and the defendant lost its chance to unwind a six-year-old default judgment. The holding, briefly. Justice Alito, writing for eight justices, focused on text and structure. Rule 60(c)(1) says all Rule 60(b) motions must be made within a reasonable time; the Rule expressly creates a one-year cap for some grounds, but nowhere carves out an unlimited window for void-judgment claims. Even if a void judgment is a “legal nullity,” that does not entitle a litigant to sleep on its rights forever. Due process, the Court reasoned, is satisfied by a flexible “reasonable time” standard—particularly in default cases, where it may be reasonable not to act until enforcement efforts put the defendant on notice. Justice Sotomayor concurred in the judgment, cautioning that the majority wandered unnecessarily into constitutional hypotheticals no party raised. But on the core point—that void does not mean timeless—there was no dissent. Why this “boring” case isn’t boring at all. As SCOTU Sblog recently observed in The Case for Embracing Boring Cases, these disputes only look dull until you’re the one on the wrong end of a default judgment: Additionally, as a few justices noted during oral argument, this case could have consequences for people across the country, particularly those who may not know enough about the law to realize when to take a legal document seriously. The dispute won’t seem very boring if you’re the one in need of more time to challenge a default judgment. That observation lands squarely in the consumer-bankruptcy world. Default judgments often become the predicate for wage garnishments, bank levies, and—critically—credit reporting. The credit-reporting angle bankruptcy lawyers shouldn’t miss. The “Big Three” credit reporting agencies have long tried to sidestep consumer disputes tied to bankruptcy discharges by labeling them “legal” rather than “factual.” This has included questioning whether a judgment or bankruptcy discharge is truly final and settled.  That move took a hit in the Fourth Circuit’s Roberts v. Carter-Young decision, where the court rejected the idea that CR As can avoid their FCRA reasonable-investigation duties simply by invoking a “legal dispute” mantra.  Coney Island Auto Parts reinforces the same instinct from a different angle: procedural rules still matter, even when the underlying defect is serious. Just as CR As cannot ignore bankruptcy discharges by waving the word “legal,” litigants cannot ignore timing rules by waving the word “void.”  The one-year time limit to set aside a judgment or bankruptcy discharge precludes that distinction. Void vs. avoidable — an oblique but important reminder. The Court treats “voidness” as real, but not magical. A judgment may be void, yet still subject to procedural limits on when relief can be sought. That maps closely onto bankruptcy doctrine. Actions taken in violation of the automatic stay—such as liens recorded post-petition—are generally described as void and, in theory, never valid in the first place. By contrast, preferential or fraudulent transfers, including preferential liens, are merely avoidable under provisions like 11 U.S.C. § 548, and remain fully effective unless and until the trustee (or debtor with standing) affirmatively acts to avoid them. When that happens, 11 U.S.C. § 551 steps in to preserve the avoided lien for the benefit of the estate, meaning the value of the lien is captured for creditors as a whole and is not swept back to the debtor through individual exemptions. Practice takeaway. Yes, this is a “boring” case. It does not expand the discharge, redefine estate property, or announce a new consumer-protection doctrine. But it quietly reinforces something bankruptcy practitioners see every day: default judgments, notice failures, and timing rules have long shadows—affecting collections, bank accounts, and credit reports years later. For debtors and consumers, missing a deadline can be just as devastating as losing on the merits. And for lawyers, this case is a reminder that even the dull corners of procedural law can shape outcomes long after the bankruptcy case itself has faded from view. For further analysis and commentary,  please see: Rochelle's Daily Wire:  Supreme Court Holds Void Judgments Must Be Attacked Within a ‘Reasonable Time’   With proper attribution,  please share. To read a copy of the transcript, please see: Blog comments Attachment Document coney_island_sup_ct.pdf (98.13 KB) Category Federal Cases

N.C. Ct. of App.: Eagles v. Integon Indemnity Corp.: Receivership as the End-Run (Again), Standing Still Matters, and Bankruptcy’s Shadow Looms Large Ed Boltz Fri, 01/23/2026 - 15:25 Summary: The North Carolina Court of Appeals’ January 21, 2026 decision in Eagles v. Integon Indemnity Corp. is not a bankruptcy case—but it reads like one written in bankruptcy ink. Anyone who followed In re Carter and In re Black will immediately recognize the terrain: catastrophic tort judgments, frustrated collection efforts, insurers accused of bad-faith failure to settle, and creative procedural maneuvering to get at insurance-related causes of action that otherwise sit beyond the creditor’s direct reach. At bottom, Eagles is about who gets to sue whom, when, and from where. And like Carter and Black before it, the answer turns on standing, jurisdiction, and courts’ deep skepticism of procedural shortcuts designed to manufacture leverage rather than resolve insolvency. The Holding (In Plain Terms) After a $40 million drunk-driving verdict—the largest in North Carolina history—the judgment creditors hit the familiar wall: executions returned unsatisfied. They then sought appointment of receivers to pursue potential bad-faith and unfair-trade-practice claims against the insurer, Integon Indemnity, based on alleged failure to settle within policy limits. Integon tried to seize the initiative by filing its own declaratory judgment action in Forsyth County—but did so in the name of the wrong corporate entity. That mistake proved fatal. Because the plaintiff lacked standing at the moment of filing, the trial court never acquired subject-matter jurisdiction. Everything that followed in that action—motions, amendments, rulings—was a nullity. The Court of Appeals vacated the Forsyth County orders and remanded with instructions to dismiss without prejudice . Meanwhile, the receivers’ Nash County action survived intact. Venue was proper, there was no basis to stay in favor of a null action, and Integon’s attempts to force the case elsewhere failed. Standing is not a technicality. It is jurisdictional. And you do not get to fix it later. Why This Sounds So Familiar: Carter and Black Revisited: If this all feels déjà vu, it should. In In re Carter, the Middle District of North Carolina allowed an involuntary Chapter 7 to proceed over insurer objections, holding that insurers lacked standing to derail the case and that potential first-party bad-faith claims were legitimate estate assets worth preserving through bankruptcy . The bankruptcy court rejected the notion that using bankruptcy to marshal those claims was inherently abusive.   (For more see:  Bankr. M.D.N.C.: In re Carter- Standing in Involuntary Bankruptcy; Good Faith in Filing Involuntary Bankruptcy) By contrast, In re Black landed on the opposite end of the spectrum. There, the court dismissed an involuntary petition as filed in bad faith, condemning it as a single-creditor collection device whose real purpose was to conscript a bankruptcy trustee into pursuing non-assignable insurance claims. The opinion is a cautionary tale—fact-intensive, ethics-laden, and deeply skeptical of “bankruptcy as leverage” . Eagles sits squarely between those poles. Like Carter, it validates the idea that fiduciaries (there, a trustee; here, receivers) may pursue insurers for failure-to-settle claims when traditional collection tools fail. Like Black, it underscores that courts will not tolerate procedural gamesmanship—especially when jurisdiction is manufactured or assumed rather than properly invoked. The Bankruptcy Subtext (Even Outside Bankruptcy): What makes Eagles particularly interesting for bankruptcy practitioners is how closely it tracks bankruptcy doctrine without ever invoking the Code: Standing is measured at filing. Just as in bankruptcy, you cannot amend your way into subject-matter jurisdiction. Procedural consent doesn’t cure jurisdictional defects. Participation, delay, or strategic silence cannot validate a void action. Fiduciary collection tools are scrutinized. Whether it’s a trustee under § 541 or a receiver under state law, courts look hard at motive and structure. The case is also a reminder that receivership and bankruptcy are often competing—or complementary—routes to the same end: getting control of causes of action that belong to the debtor, not the creditor. Carter shows when bankruptcy can work. Black shows when it backfires. Eagles shows that even outside bankruptcy, the same fault lines apply. Bottom Line: Eagles v. Integon Indemnity Corp. reinforces three durable lessons: Standing is foundational. Get it wrong at filing, and nothing else matters. Courts will tolerate creative collection strategies—but not jurisdictional shortcuts. The Carter–Black spectrum still governs. Whether in bankruptcy court or state court, the legitimacy of using fiduciary proceedings to reach insurer liability turns on good faith, proper parties, and procedural integrity. For insurers, this is a warning shot: receivership-based bad-faith litigation is not going away. For judgment creditors, it’s a reminder that precision matters. And for bankruptcy lawyers, it’s further proof that our doctrines—standing, estate property, good faith—continue to shape outcomes well beyond the walls of the bankruptcy court. With property attribution,  please share this post.   To read a copy of the transcript, please see: Blog comments Attachment Document eagles_v._integon_indem._corp.pdf (210.62 KB) Category NC Court of Appeals

Law Review: Barbieri, Paolo and Bottazzi, Laura and Di Giacomo, Giuseppe-​ Debtor Protection and Health Insurance: Evidence From Personal Bankruptcy Reform (June 19, 2024). Ed Boltz Wed, 01/21/2026 - 15:40 Available at:   https://ssrn.com/abstract=4892813 Abstract: The authors  investigated how the use of bankruptcy as an implicit health insurance varies across households, focusing on heterogeneity by asset holdings, race, marital status, and educational attainment. Using a difference-in-differences design based on the 2005 bankruptcy reform, the authors found that the reform modestly increased health insurance coverage among middle-income households unlikely to lose assets under Chapter 7, with stronger effects for married and less educated households. The reform primarily affected White households, suggesting racial disparities in bankruptcy use. Treated households also showed increased healthcare utilization and spending. These heterogeneous effects highlight how the reform may have deepened existing health and financial inequalities. Commentary: The recently released paper “Debtor Protection and Health Insurance: Evidence From Personal Bankruptcy Reform” adds rigorous empirical support to something consumer bankruptcy lawyers have understood intuitively for decades: for a meaningful slice of middle-class households, bankruptcy functions as a form of implicit health insurance. When that protection is weakened, families respond—sometimes by purchasing or retaining health insurance, and sometimes by forgoing care or absorbing greater financial risk. Using the 2005 BAPCPA reforms as a natural experiment, the authors show that tightening access to Chapter 7 modestly increased private health insurance coverage—but only for a narrow group: middle-income households with few or no non-exempt assets, particularly married and less-educated households. At the same time, the reform increased health-care utilization and spending, largely through private insurance rather than out-of-pocket payments. The takeaway is not that BAPCPA “worked,” but that bankruptcy protections and health insurance are substitutes at the margin. Reduce one, and households scramble—if they can—to shore up the other. 1. Policy Implications: Why This Paper Strengthens the Case for Higher Bankruptcy Exemptions Particularly from a North Carolina policy perspective, this paper is gasoline on a fire that has already been smoldering for years. Bankruptcy exemptions are health policy The authors confirm that asset exemptions matter. The households most affected by BAPCPA were those who did not expect to lose property in Chapter 7. In other words, bankruptcy provided a credible safety net only because exemptions were sufficient to protect basic household stability. When that safety net was weakened, households responded by reallocating risk—often at significant cost. This matters enormously in a state like North Carolina, where: Homestead, vehicle, and wildcard exemptions lag well behind inflation; Medical debt remains a dominant driver of financial distress; and Health insurance coverage is increasingly fragile as premiums rise and subsidies phase out. If bankruptcy operates as implicit health insurance, then inadequate exemptions are effectively a cut to consumer health protection, especially for families living one diagnosis away from insolvency. The ACA subsidy cliff makes this urgent The paper’s findings land at exactly the wrong moment for consumers. With Affordable Care Act subsidies expiring or shrinking, many middle-income households face sharply higher premiums. The paper suggests that when formal insurance becomes less affordable, families will predictably lean more heavily on bankruptcy as a risk-management tool—unless bankruptcy itself is made less protective. That combination—weaker insurance support and weak exemptions—is a recipe for deeper inequality, delayed care, and worse financial outcomes. The authors explicitly warn that BAPCPA’s effects “extended well beyond filing behavior,” reshaping health and financial inequality. A clear legislative lesson For legislators, especially in North Carolina, the message is straightforward: Raising exemptions is not a giveaway. It is a stabilizer. Adequate exemptions reduce the need for households to make destructive tradeoffs between health, debt, and shelter. This paper provides empirical backing for what consumer advocates have long argued: bankruptcy policy is inseparable from health policy, whether lawmakers acknowledge it or not. 2. Practice Guidance: What Consumer Bankruptcy Attorneys Should Do with This Data This paper is not just academic. It should meaningfully shape how consumer bankruptcy attorneys identify risk, counsel clients, and prepare cases—especially in the coming ACA transition period. Spotting clients at heightened risk The households most sensitive to changes in bankruptcy protection look very familiar: Middle-income families, Limited non-exempt assets, Often married, Often without a college degree, Reliant on employer-based insurance or ACA plans. When such clients present with: Rising medical debt, Lapsed or downgraded health insurance, Hesitation to seek care due to cost, That is a bankruptcy red flag, not just a budgeting issue. Health insurance belongs in the intake—and the Means Test The paper reinforces the importance of health insurance as a core component of bankruptcy analysis, not an afterthought. Under 11 U.S.C. § 707(b)(2)(A)(ii)(I), debtors are entitled to deduct the cost of “reasonably necessary” health insurance. As premiums rise post-subsidy, that deduction will matter more, not less. Consumer attorneys should: Rigorously document actual premium costs, Anticipate increases when subsidies expire, Push back on artificial caps or skepticism about “reasonableness.” This research supports the argument that health insurance is not discretionary consumption—it is a risk-management necessity, especially when bankruptcy protections have already been narrowed. Counseling beyond the petition Perhaps most importantly, the paper validates a broader counseling role for bankruptcy attorneys. The authors show that insurance coverage increases preventive care and reduces out-of-pocket exposure. That means: Advising clients on maintaining coverage post-discharge is part of competent representation; Timing of filing may matter when insurance transitions are imminent; Chapter choice and exemption planning intersect directly with health-care access. In short, bankruptcy lawyers are already operating at the intersection of health, debt, and family stability. This paper simply provides the data to prove it. Bottom Line: This study confirms what decades of consumer practice have revealed: bankruptcy fills gaps left by a fragmented and expensive health-insurance system. When lawmakers weaken bankruptcy protections without strengthening health coverage, households absorb the shock—unevenly, and often painfully. For North Carolina, the policy lesson is clear: raising exemptions is a necessary response to rising medical and insurance costs, not an indulgence. For practitioners, the lesson is equally clear: health insurance status is bankruptcy analysis, especially as ACA subsidies fade and premiums climb. The law may pretend these systems are separate. This paper shows they never were. With proper attribution, please share. To read a copy of the transcript, please see: Blog comments Attachment Document debtor_protection_and_health_insurance_evidence_from_personal_bankruptcy_reform.pdf (1.41 MB) Category Law Reviews & Studies

Bankr. M.D.N.C.: In re Sinclair — Automatic Stay Does Not Block Enforcement of Federal Restitution Lien Ed Boltz Tue, 01/20/2026 - 15:41 Summary: In In re Sinclair, the Judge Kahn held that the automatic stay in a Chapter 13 case does not prevent the United States from continuing a district-court civil action to enforce a criminal restitution lien against real property formerly owned as tenants by the entirety—even though the bankruptcy debtor herself was not the criminal defendant. The debtor filed Chapter 13 and listed her Durham residence as estate property. Years earlier, her spouse (or ex-spouse, depending on which part of the record you read) had been convicted of wire fraud and ordered to pay restitution. Under the Mandatory Victims Restitution Act (MVRA), a restitution lien arose in 2008 and attached to all of the criminal defendant’s property and rights to property, including his undivided one-half interest in the entireties property. The government later filed a civil action seeking a forced sale of the entire property, with proceeds attributable to the criminal defendant’s former interest applied to restitution and the balance paid to the debtor. After the bankruptcy filing, the debtor argued that the automatic stay barred continuation of the civil action because (1) she—not the criminal defendant—now owned the property, and (2) the property was now property of the bankruptcy estate. The court rejected both arguments and ruled that the stay never applied in the first place. Holding: Relying heavily on its earlier decision in In re Turner and the district court’s affirmance, the court held that: The MVRA’s enforcement provision, 18 U.S.C. § 3613(a), applies “[n]otwithstanding any other Federal law,” including the Bankruptcy Code and the automatic stay. Once a restitution lien validly attaches to a criminal defendant’s property or rights to property, that lien survives later transfers—including transfers to a spouse—and may be enforced through a judicial sale. The fact that the debtor is not the “person fined,” and that the property is now property of the bankruptcy estate under § 541, does not alter the analysis. Because the restitution lien attached when the criminal defendant held an interest, the government may proceed with enforcement notwithstanding § 362. The court therefore entered an order declaring that the automatic stay does not apply to the pending district-court action and denied stay relief as unnecessary. Commentary: This is a sobering but unsurprising opinion, and one that bankruptcy lawyers in North Carolina need to have firmly on their radar. The takeaway is simple and harsh: federal criminal restitution liens are nuclear-grade collection devices. Once they attach, they behave much like federal tax liens—and the MVRA makes explicit that Congress intended exactly that result. Entireties law, § 541 estate-vesting arguments, and the automatic stay all yield to the “notwithstanding any other Federal law” language of § 3613. What makes Sinclair particularly painful is that the debtor herself was not the criminal wrongdoer. Yet the court correctly recognized that allowing a restitution debtor to neutralize enforcement simply by transferring property to a spouse—or by the spouse filing bankruptcy—would “eviscerate” the statute. Bankruptcy is powerful, but it is not a safe harbor from criminal restitution. For consumer practitioners, this case is a reminder to ask hard questions early: Is there criminal restitution? Has a lien attached? When did it attach? And does the client understand that Chapter 13 cannot stop a forced sale when the United States is enforcing a restitution judgment tied to a spouse’s prior property interest? For debtors, the result feels brutal. For Congress, it is exactly what was intended. And for the rest of us, Sinclair reinforces that when bankruptcy law collides with federal criminal enforcement, bankruptcy usually loses. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_sinclair.pdf (586.68 KB) Category Middle District