Law Review N Ote: John Ellison, Disillusionment of Discharge: The FRESH START Through Bankruptcy Act, 40 Emory Bankr. Dev. J. 291 (2024). Ed Boltz Mon, 07/15/2024 - 18:20 Available at:   https://scholarlycommons.law.emory.edu/ebdj/vol40/iss2/4/ Abstract: Although its roots precede the twenty-first century, the student loan debt “issue” in America has evolved in recent years into a full-blown “crisis.” Recently surpassing credit cards and auto loans, student loan debt is the second-largest type of consumer debt in the United States, behind only mortgage debt. Prior to the Higher Education Amendments of 1976, bankruptcy provided an avenue through which student loan debt could be discharged. A series of legislative amendments, however, led to the imposition of 11 U.S.C. § 523(a)(8), which bars the discharge of student loan debt absent a showing of “undue hardship.” Courts have constructed the “undue hardship” standard into a major hurdle for student debtors seeking a fresh start through bankruptcy. For most courts, demonstrating “undue hardship” requires a debtor to satisfy three prongs of a strict elements test. Referred to by some in the judiciary as the “certainty of hopelessness” standard, the test has come under scrutiny in the legal community. Many, including federal judges, the American Bar Association, and the American Bankruptcy Institute, have called for reform to better effectuate the relief sought by student loan debtors. This Comment posits that the proposed FRESH START Through Bankruptcy Act of 2021 is the most viable solution to the student loan crisis and would address it in two primary ways. First, it would eliminate the need for student loan borrowers to satisfy the “undue hardship” standard, and would make discharge attainable—provided the debtor has already been in repayment for at least ten years. Second, it would address the underlying issues of “credentialism” and increased tuition costs, at least in part, through a “clawback” provision aimed to increase institutional accountability. Commentary: This law review note provides a very thorough history of student loans and bankruptcy before discussing the FRESH START through Bankruptcy Act introduced first in 2021 by Senators Durbin (D-IL),  Cornyn (R-TX) and Hawley (R-MO) and could serve as a primer and white paper for  efforts supporting that bi-partisan legislation. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document disillusionment_of_discharge_the_fresh_start_through_bankruptcy_act.pdf (896.68 KB) Category Law Reviews & Studies

M.D.N.C.: Keller v. Experian- Reinvestigation by CRA under FCRA Ed Boltz Mon, 07/15/2024 - 18:14 Summary: Eric Keller initiated a lawsuit against Experian Information Solutions, Inc. ("Experian"), alleging willful and negligent violations of the Fair Credit Reporting Act (FCRA). The dispute arose after Keller financed a vehicle and later refinanced it through Truist Bank, which first sent duplicate payments to the original lienholder,  and,  after receiving a refund for one of those payments,   mistakenly credited his account and released the lien and refused to accept further payments.  Truist Bank  reported the loan as paid off, but then reported him as delinquent when the error was discovered. Mr.  Keller's attempts to correct his credit report,  including by sending dispute letters through his attorney,  were unsuccessful, leading to his filing a dispute with Experian. When that dispute also proved  unavailing,  Mr.  Keller  brought suit against Experian  alleging that it failed to conduct a reinvestigation ( or that any reinvestigation was unreasonable) and that it reported information it could not verify under the FCRA.  The district court  found that under its Suspicious Mail Policy (SMP),  Experian  may terminate a reinvestigation if a dispute letter appears to come from a third party.   In assessing the sufficiency of the complaint,  the district court held,  however,  that  Mr.  Keller's factual allegations, including sending a dispute letter authorized by him but through his attorney, support a reasonable inference that Experian's policy could lead to failure to comply with the FCRA.   As to the allegations that it had conducted an unreasonable Reinvestigation and reported unverifiable information,  the district court dismissed those causes of action,  holding  that FCRA only required Experian to conduct reasonable investigations regarding factual disputes.  Because  the Fourth Circuit "has  articulated its 'concern' about collateral attacks" against the underlying debt, see Saunders v. Branch Banking & Tr. Co. off Va., 526 F.3d 142 (4th Cir. 2008), the district court dismissed these causes of action as a legal and not factual dispute.  See also,  Perry. v. Toyota Motor Credit Corp.,  where the district court in the Western District of Virginia  held that inaccurate credit reporting of a debt discharged in bankruptcy  failed to state a claim under FCRA.   Still pending is Experian's motion for judgment on the pleadings,  as it argues that with the dismissal of the latter two causes of action,  the first cannot survive. Commentary: It also seems surprising in this case that Mr. Keller had completely separate and apparently unrelated attorneys than in his parallel case filed against Truist Bank and Equifax,  even though both were filed the same day.  Following a successful mediation,  however,  Truist,  Equifax and Mr.  Keller appears to have resolved their disputes,  with the case being dismissed after payment by Truist and/or Equifax of an undisclosed amount.   What is not surprising is that Experian seems to be primarily interested in either minimizing its own obligations (including and probably especially ignoring disputes filed through the assistance of an attorney) regarding reinvestigations or not questioning creditors,  rather than providing truly accurate credit reports,  let alone providing any protection to  consumers.  Perhaps this is why the federal government has found that one in five people have an error on at least one of their credit reports.  This may also be why it makes sense to bring FCRA suits first against the creditor for providing inaccurate  information and then only then (and with caution) against the CRA. It should be  noted that  Perry v.  Toyota Motor Credit Corp.  involved the rather complicated and arcane  bankruptcy question of whether the assumption of a lease   in a bankruptcy case also  reestablished personal liability for that debt without a separate reaffirmation agreement.  (There Perry would have likely benefited from first seeking a clarifying order of judgment from the bankruptcy court and then including such in the FCRA dispute.)  The question here of whether Truist  accurately reported  a delinquency, after its own mistakes led it to refuse to accept payments,  certainly appears less complicated and completely factual.    Also not surprising is that , while courts and Congress overwhelmingly prefer that most disputes  be handled through the less judicial avenue of arbitration rather than lawsuits,  the non-judicial mechanism for resolving credit report  errors under the FCRA is so disfavored that only the most patently factual disputes are covered,  leaving consumers with the slower and more expensive course of first seeking judicial findings of fact such that Experian and other recalcitrant credit reporting agencies must even perform the slightest of reinvestigations. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document keller_v._experian.pdf (215.02 KB) Document keller_v._truist_notice_of_settlement.pdf (131.93 KB) Document keller_v._truist_mediators_report.pdf (394.24 KB) Document keller_v._experian_memorandum_of_law_in_support_of_motion_for_judgment_on_the_pleadings.pdf (169.79 KB) Document keller_v._experian_plaintiffs_opposition_to_defendants_motion_for_judgment.pdf (263.56 KB) Category Middle District

Bankr. E.D.N.C: Dupree Farms v. Producers Ag- Jurisdiction for Post-Confirmation Disputes Ed Boltz Mon, 07/15/2024 - 18:08 Summary: Dupree Farms, LLC filed for Chapter 11 bankruptcy on January 16, 2018 and subsequently  obtained a Whole-Farm Revenue Protection (WFRP) policy from ProAg in February 2018.  After first initiating arbitration,  which held in favor of ProAg,   Dupree Farms then filed an adversary proceeding on November 11, 2019, asserting state law claims for negligent and intentional misrepresentation, unfair trade practices, and punitive damages,  asserting both that  the policy should cover losses at an "Expanded Operations Factor" of 1.35 (where ProAg calculated coverage at 1.17) and contending it was owed $1,226,720 not the $691,557 paid. ProAg argued the bankruptcy court lacked jurisdiction because the claims arose post-confirmation, with the court applying the six-factor test from [http://Avado Brands, Inc. v. Dupree et al, 358 B.R. 868, 878 (Bankr. N.D. Tex. 2006)]Avado Brands, Inc. v. Dupree et al, 358 B.R. 868, 878 (Bankr. N.D. Tex. 2006) to determine whether the claims had a "close nexus" to the bankruptcy case and plan, which is necessary for post-confirmation jurisdiction: when the claim at issue arose;  what provisions in the confirmed plan exist for resolving disputes and whether there are provisions in the plan retaining jurisdiction for trying these suits; whether the plan has been substantially consummated;  the nature of the parties involved;  whether state law or bankruptcy law applies; and  indices of forum shopping.  The court denied ProAg's motion  finding that the claims arose during the bankruptcy and were discussed during the plan confirmation process, indicating creditors relied on the potential recovery,  the plan included provisions for resolving disputes and retained jurisdiction over relevant matters and had not  been substantially consummated when the adversary proceeding was filed.  Commentary: While perhaps more applicable for after discharge in a Chapter 13 case,  which has little that is otherwise comparable to the "substantial consummation"  milestone in Chapter 11,   the bankruptcy plan in Chapter 13 should ideally include explicit retention of jurisdiction for any disputes that are likely to arise post-discharge,  including for example mortgage litigation issues.  (Which are at least partially preserved by 11 U.S.C. § 524(i).) With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document dupree_famrs_v_producers_agriculture_insurance.pdf (280 KB) Category Eastern District

W.D.N.C.: Biddle v. Grain Technology- Delinquent Credit Reporting due to Failure to Accept Payments by Creditor is an Impermissible Legal Dispute under FCRA Ed Boltz Mon, 07/15/2024 - 17:41 Summary: After Grain Technologies locked all of its borrowers  from making payment through its app (or by any other means),  it then began  to report that Damon Biddle was delinquent on payments.  After filing unsuccessful disputes  showing that any delinquencies were due to the failure of  Grain Technologies to accept payments,   Mr.  Biddle brought suit pursuant to FCRA against Grain Technologies and several  credit reporting agencies.  The magistrate court,  in an opinion adopted by the district court,  held that Mr.  Biddles' dispute  questioned the validity of the underlying debt  and that such a "collateral attack" on the debt  was an impermissible  legal dispute and not a factual dispute as contemplated by FCRA.  Commentary: It would seem that to the Big Brother credit reporting agencies,  every dispute is a legal question under FCRA and not factual  to such an extent that they would even contend that since  2+2 can equal 5,  since, depending on the legal regime under which one lives (just like "War is Peace,  Freedom is Slavery,  Ignorance is Strength"), that could be true. To read a copy of the transcript, please see: Blog comments Attachment Document biddle_v._grain_technologies.pdf (140.88 KB) Category Western District

M.D.N.C.: Scott v. Full House Marketing- FCRA and Employment Decisions Ed Boltz Mon, 07/15/2024 - 17:37 Summary: Derrick Perez Scott was denied employment by Full House Marketing after it obtained a credit report which inaccurately included the criminal convictions of Derrick  Lee Scott.  Mr.  Scott subsequently brought suit against Full House Marketing under the Fair Credit Reporting Act,  asserting that it had failed to provide him with a copy of that credit report before declining to hire him.   In a lengthy 57-page decision, full of detailed findings of fact and multiple evidentiary rulings,  the district court,  while FCRA  requires that employers must provide a job applicant consumer with a copy of their consumer report and a description of their rights before taking adverse action based on that report, denied the competing motions for summary judgment brought by both Mr.  Scott and Full House Marketing,  finding that conflicting testimony left genuine issues of material fact for the jury.  Commentary: The jury eventually reached a verdict (attached) finding that while the provider of the inaccurate credit report,  Resolve Partners, L.L.C.,  had violated 15 U.S.C. §1681e(b)  by failing to "follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates" and awarded Mr. Scott $2,500 in compensatory damages,  it found that Full House Marketing had not violated 15 U.S.C. §1681b(b)(3)(A) by failing to provide a copy of the  credit report. This case does also present the unfortunate circumstance of attorneys for opposing sides,  all of whom have, at least until recently,  been members of the consumer bar,  alleging violations of Rule 11 and (unsuccessfully)  seeking sanctions against their colleagues. Beyond any implications for this case for consumer rights,  this case does serve as a warning for all employers (which most of us are)  that  use of credit reports,  while perhaps valuable to evaluate potential employees,  does under FCRA oblige employers to provide opportunities to review those reports before the employer makes adverse decisions. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document scott_v._full_house_marketing.pdf (276.03 KB) Document scott_v._full_house_marketing_jury_verdict.pdf (115.67 KB) Category Middle District

4th. Cir.: Feyijinmi v. Maryland- Nondischargeability of Restitution without Conviction Ed Boltz Mon, 07/15/2024 - 17:29 Summary: Dedre Feyijinmi was found guilty of welfare fraud and ordered to pay $14,487 in restitution. The state court deferred the entry of her conviction,  placing her on probation. After completing her probation,  her criminal records were expunged but her restitution obligation remained.  Ms. Feyijinmi filed for Chapter 13 bankruptcy, and Maryland filed a proof of claim for the restitution debt, inaccurately labeling it as "court fees."  Ms.  Feyijinmi  brought an Adversary Proceeding seeking a determination that this debt was discharged, but that was rejected by the bankruptcy and district courts. On appeal,  the Fourth Circuit began its analysis  with the interpretation of the term "conviction" under 11 U.S.C. § 1328(a)(3),  relying on the Supreme Court's decision in Dickerson v. New Banner Institute, Inc., which held that a guilty plea followed by probation qualifies as a conviction, even when no formal judgment is entered. The court determined that Feyijinmi's probation before judgment, which required a guilty finding, constituted a conviction under federal law.   The court concluded that "sentence" , as used in § 1328(a)(3), includes any penal consequences resulting from a determination of guilt, such as probation and restitution.  Finally, the court rejected Ms. Feyijinmi's argument that the mischaracterization of the debt as "court fees" on the proof of claim affected its dischargeability. As restitution debts are nondischargeable without any action by the creditor and that the  proof of claim and any characterization of the debt did not change its nature. The court also found no evidence of bad faith or unreasonable delay that could have prejudiced Feyijinmi. Commentary: In regards to the characterization by Maryland in its Proof of Claim,  it should be noted that the Court of Appeals held "that to the extent that the proof of claim was ambiguous, it was cleared up by the attached restitution order" (Emphasis added) and a restitution order is nondischargeable without any action by the creditor.  While this would likely mean that an adequately documented Proof of Claim  that failed to accurately characterize a debt as child support would remain a priority,  nondischargeable claim,  but that a secured creditor that included no evidence of a lien and affirmatively stated that it held an unsecured claim might not find the same protection. See also:  Rochelle's Daily Wire-  Fourth Circuit Broadly Defines Restitutions that Aren’t Discharged in Chapter 13 NACBA filed an amicus brief in support of the Debtor/Appellant- In re Feyijinmi - NACB As Amicus Brief In Support of Appellant With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document feyijinmi_v_maryland.pdf (205.43 KB) Category 4th Circuit Court of Appeals

When people are in far more debt than they can handle, they may file for bankruptcy and hopefully get a fresh financial start. If that person had other people co-sign for things like loans, those co-signers might be in some financial trouble of their own. If you co-signed for someone and they have filed or will file for bankruptcy, you should speak to an attorney about how to protect yourself, as you could be liable for paying the other person’s debts. If you file for bankruptcy, co-signers might be on the hook for your unpaid debts. It all depends on which bankruptcy chapter you choose when you file. Chapter 7 generally does not offer much protection for co-signers, but Chapter 13 may shield co-signers from liability for debts, at least to a certain degree. Talk to a lawyer about how you can protect co-signers from the financial backlash of your bankruptcy case. Get a free, private assessment of your case when you call Young, Marr, Mallis & Associates at (215) 701-6519 and talk to our Pennsylvania bankruptcy attorneys. What Happens to Co-Signers if I File for Bankruptcy in Pennsylvania? Not everyone can secure a loan or rent an apartment based on their credit. People with a rocky credit history or young people with minimal credit history might need a co-signer. The co-signer is another person, often with better credit, who co-signs for the loan, apartment, or other debts. If you cannot make payments on your loan or stop paying rent, creditors may go after the co-signer for payment. If you file for bankruptcy, your co-signer might be liable for payment, depending on how you file. Bankruptcy can be a helpful solution for those facing insurmountable debt, but the benefits of bankruptcy might not cover everyone who signed for the loan. Co-signers might be offered few protections, and they might suddenly be responsible for paying your debts. When debts are discharged, only your liability to pay is removed. A discharge of debt does not affect the co-signers liability, depending on which bankruptcy chapter you file under. If you believe filing for bankruptcy is necessary, talk to our Philadelphia bankruptcy lawyers about how to file and protect co-signers. Co-signers are often friends or family members, and protecting them from your financial pitfalls might be of significant interest. How Co-Signers Can Protect Themselves if Someone Files for Bankruptcy in Pennsylvania Your attorney can help you determine the best way to file for bankruptcy to protect co-signers. Remember, there are multiple bankruptcy chapters, and some offer better protections than others. For example, Chapter 13 bankruptcy comes with certain advantages for co-signers that you should consider. According to 11 U.S.C. § 1301(a), after a bankruptcy court issues an order of relief under Chapter 13, creditors may not commence a civil action against a co-debtor or co-signer to collect any part of the debt unless certain circumstances are present. Creditors may only take action against a co-signer if they become liable for the debt in the normal course of their business or if the case is closed, dismissed, or converted to Chapter 7 or 11 bankruptcy. Alternatively, under Chapter 7, there are no protections for co-signers. The automatic stay that normally shields debtors from legal action from creditors does not extend to co-signers. Creditors can go after them for payment while your bankruptcy case is pending. If your co-signer is a family member or close friend, you might want to consider the potential legal consequences your bankruptcy case might have on them. If the bankruptcy option you select offers little protection for co-signers, you might want to consider other ways of paying back the debt. For example, suppose a close friend co-signed on your mortgage, but you defaulted and are facing foreclosure. Bankruptcy may help you here, but you do not want to put your friend at financial risk. If there is a way to liquidate other assets so you can pay your mortgage and avoid bankruptcy, you should consider it. How Bankruptcy Can Affect a Co-Signer’s Credit in Pennsylvania When a person files for bankruptcy, their credit may take a significant hit. However, a co-signer’s credit will not be impacted by the bankruptcy filing, at least not directly. Depending on whether the co-singer is shielded from liability or not may determine how their overall credit is impacted. After someone files for bankruptcy, the court may discharge their debt, and they will no longer be liable for payment. The same does not go for co-signers. A co-signer may still be liable for payment, and creditors may go after them for payment. If a co-signer cannot or chooses not to pay these debts, their credit may drop. Wrose still, they might be unable to afford the debts and have to file for bankruptcy themselves. Can a Co-Signer Sue the Person They Co-Signed for in Pennsylvania? If you co-signed for someone and ended up saddled with their debts because they filed for bankruptcy, you should speak to an attorney about possibly taking legal action against the other person. A lawsuit might be especially effective if the other person has the money to pay their debt but refuses to do so, thus leaving you with their financial burden. If you have reason to believe that the person you co-signed for can pay but refuses to do so, you should talk to a lawyer about suing them. If you end up paying the debt because the debtor refuses to do so, you may sue them for the money you lost. Even if you do not sue them, you may bring up their financial situation to the bankruptcy court if they file for bankruptcy. Bankruptcy is only available for those with little financial resources to pay debts. Those with adequate financial resources will be quickly turned away. This kind of situation might arise when a debtor misled a friend or family member into co-signing a loan. Perhaps your “friend” never intended to pay the debt. Now, they have whatever they used to loan to purchase, and you are left with the bill. Speak to Our Pennsylvania Bankruptcy Lawyers for Support Get a free, private assessment of your case when you call Young, Marr, Mallis & Associates at (215) 701-6519 and talk to our Northeast Philadelphia bankruptcy attorneys.

If your employer maintains something like a retirement fund, disability benefits, or health insurance plans for you and other employees, they might be regulated by ERISA. This is a very complicated area of federal law that aims to protect employees. If your employer or your employer’s insurance company violates ERISA regulations, a lawyer can help you file a claim, but not all claims have happy endings. ERISA claims may be denied for a whole host of reasons. A common reason for claims being denied is that they are filed in the wrong court. While you and your employer might be located in Pennsylvania, ERISA is a federal law that must be heard in federal courts. You might also be denied for failing to follow proper procedures under ERISA. Usually, courts will not even entertain the idea of a claim until it has exhausted any available appeals under ERISA. Claims are also frequently denied due to a lack of proper documentation. If you need help filing a claim, call our Pennsylvania disability attorneys for a free review of your case at Young, Marr, Mallis & Associates at (215) 515-2954. Filing ERISA Claims in the Wrong Court in Pennsylvania The Employee Retirement Income Security Act (ERISA) of 1974 is a very large, complex area of federal law. ERISA applies to employers not just in Pennsylvania but in all 50 states. It may preempt certain areas of state law, meaning employers must follow federal laws when it comes to complying with ERISA. This can sometimes trip people up when they file claims for ERISA violations. Claims may be denied if you file in the wrong court. Since ERISA and related violations are matters of federal law, claims must be filed in federal courts. If you were to mistakenly file your ERISA claim in a state court, it would likely be quickly dismissed, and you would need to refile the case in federal court. While this is not a death sentence for your claim, it might cost you valuable time and resources. Finding the right federal court may be tricky, depending on where you live in Pennsylvania. There are federal courts for Pennsylvania’s western, middle, and eastern districts. There might be multiple federal district courts in each district, and our Pennsylvania disability lawyers will file your case in the appropriate court. Filing an Appeal Under ERISA Before Taking Your Claim to Court in Pennsylvania When an employee believes their employer or the insurance company has violated ERISA, there are certain procedures in place that must be followed. Filing an ERISA claim is not the same as filing a typical lawsuit. Typically, you must file an appeal with the insurer in charge of your disability benefits or other accounts that fall under this law. Violations are often resolved on appeal, and no court case is needed. For example, suppose the violation was due to a clerical error or some other mistake. In that case, it may be quickly corrected, and any money you lost may be paid back, or, if your disability benefits were put on hold, they may be reinstated. Unfortunately, the appeals process does not always work for everyone. Talk to a lawyer about it, as you might need to go through several rounds of appeals before your appellate options are exhausted. At that point, it may be appropriate to file a case in a federal court. If you go to court without ever filing an appeal, the court may quickly dismiss your case. Courts do not like to hear cases if there are other legal options available you could or should have taken first. It is a good idea to exhaust all appellate options under ERISA before taking your case to court. Your lawyer can help you determine what these options are and how long it might take to exhaust them. ERISA Claims Denied for a Lack of Evidence and Documentation Much of the evidence heard in an ERISA claim will likely come from the insurance company’s records of your ERISA claim, including anything that was discovered when you filed an appeal. This is another reason it is important to file an appeal before taking your case to court. The appellate process might beef up the file on your case and provide more information for the court to consider. You might also be able to bring your own evidence and documentation. Check with your attorney about what kind of evidence you are allowed to present. For example, you should have documentation about any claims you filed with your employer and insurance company. You should also have documentation regarding any communications between you and the insurance company. If you do not document your claim, proving you suffered from an ERISA violation may be extremely difficult. While the defendant – your employer, the insurer, or both – might also lack important documentation, they do not have the burden of proof. If you cannot prove your claims, they do not have to prove anything. How a Lawyer Can Help You if Your ERISA Claims Are Denied in Pennsylvania Since ERISA is notorious for being an extremely complex area of law, it is crucial that you have a lawyer assist you throughout your claim, including during the appeals process before you file the case in federal court. An experienced attorney can help you save documentation and build your case as it unfolds. Your lawyer should also help you determine what kind of damages you might be entitled to. If your disability benefits through your job were affected by the ERISA violation, you might be in serious financial trouble. Your lawyer can help you assess how much the violation cost you and get those damages compensated. If your benefits were unlawfully terminated, your lawyer can help you get them reinstated. Contact Our Pennsylvania Disability Attorneys for Legal Support If you need help filing a claim, call our Pennsylvania disability attorneys for a free review of your case at Young, Marr, Mallis & Associates at (215) 515-2954.

W.D.N.C.: Crypto Colo Center v. Dei Vitae Enterprises: Withdrawal of Reference to Bankruptcy Court Ed Boltz Fri, 07/12/2024 - 21:35 Summary: James   and Susan  Burton filed a pro se Chapter 13 bankruptcy case on February 22, 2023,  disclosing a 98.5% ownership interest in Dei Vitae Enterprises.  This was followed on February 28, 2023,  with the Chapter 11 filing by  Dei Vitae Enterprises, LLC (DVE).   Crypto Colo Center filed  identical complaints in both bankruptcy cases on March 24, 2023, soon filing  a Motion to Withdraw Reference.    The Burtons’ Chapter 13 case and the related adversary proceeding were dismissed, rendering the motion to withdraw reference in that case moot.  Crypto Colo filed an amended complaint in the DVE adversary proceeding on July 27, 2023, with 15 non-title 11 causes of action.   DVE’s Chapter 11 case was dismissed on September 6, 2023.   DVE moved to dismiss the adversary proceeding, but the bankruptcy court denied the motions and granted abstention, pending the district court's ruling on the withdrawal motion. The district court found sufficient cause to withdraw the reference of the remaining Adversary Proceeding to the bankruptcy court,  primarily because  the remaining causes of action did not stem from the bankruptcy and were non-core, including federal securities fraud and various state law claims such as fraud, misappropriation, and breaches of fiduciary duty.  In retrieving the case from the bankruptcy court,  the district court also considered the following factors: Uniformity of Bankruptcy Administration: Withdrawal will not impact uniform administration as the issues are non-title 11. Efficiency and Judicial Economy: Withdrawal is more efficient given the bankruptcy case dismissal. Forum Shopping: No indication of forum shopping. Right to Jury Trial: A jury demand has been filed, and bankruptcy courts cannot hold jury trials in non-core matters without consent. Commentary: It seems rather strange that the Burtons  filed a pro se Chapter 13 bankruptcy,  but the nearly wholly-owned Dei Vitae Enterprises was represented by counsel  a mere week later in its Chapter 11 bankruptcy  (which was signed by Susan Burton.)  While this may be a circumstance where potential or actual conflicts of interest between the Burtons and DVE precluded those entities from sharing the same attorney,  this would nonetheless appear to be a good example of how Tall Building Lawyers  might benefit from  cultivating relationships with the consumer debtor bar,  especially to avoid falling into the muck of Chapter 13 practice.  Admittedly,  calling Chapter 11 attorneys TB Ls probably won't endear me to them enough to  result in collaborative referrals..... Given the reticence,  often verging on hostility, from bankruptcy courts to non-title 11 causes of action related to allegations of improper and illegal creditor actions,  this decision shows both how to withdraw an Adversary Proceeding to district court and that such withdrawal increases the durability of any action,  so that it can more readily survive dismissal of the underlying bankruptcy. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document crypto_colo_center_v_dei_vitae_enterprises.pdf (146.2 KB) Category Western District

The New York Post is reporting that "Companies going bankrupt at the fastest pace since 2020 in historic surge".  They stated that there is a “historic surge” of corporate bankruptcies underway in the US, as debt-saddled companies struggle to adjust to the new era of high interest rates. The story can be found at https://nypost.com/2024/07/11/business/companies-going-bankrupt-at-the-fastest-pace-since-2020-in-historic-surge/?utm_source=gmail&utm_campaign=android_nypJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!