When times get tough, people often look to forms of assistance from public programs or private groups they are a part of. For many, this means filing for Supplementary Security Income (SSI). For others, this might mean getting help through benefits from a union. Still, some people might rely on a combination of benefits. However, it is possible that union benefits might interfere with your SSI benefits. If you are a member of a union, you might already be receiving certain benefits, like pensions or disability benefits. Depending on your situation, you might also be eligible for SSI benefits through the Social Security Administration. Your union membership does not automatically preclude you from SSI benefits, but it might reduce your SSI benefits. In order to make the most of both forms of benefits so that your financial position is more secure, contact a disability lawyer. To receive a free, confidential case evaluation, call our Pennsylvania disability attorneys at Young, Marr, Mallis & Associates at (215) 515-2954. Can I Receive SSI Benefits if I Am in a Union in Pennsylvania? Everyone needs to support themselves financially, but many people have difficulty doing this on their own. They might be ill, have a disability, or have some other reason why they cannot work or cannot earn sufficient income to support themselves. When this happens, people may turn to certain forms of assistance. This might include SSI benefits or benefits through a union membership. If you are a member of a union and receive benefits of some kind, such as disability benefits, for example, you might still be eligible to receive SSI benefits. However, if you plan on taking advantage of both forms of assistance, you should speak to our Pennsylvania disability attorneys, as they might interfere with each other. Generally, eligibility for SSI benefits is based on several criteria, including financial hardship. If your benefits through your union provide you with enough financial support, your SSI benefits might be affected. Even so, it is possible to receive both benefits simultaneously. Exactly how much your SSI benefits are worth might go up or down, depending on what your union benefits are worth. Your attorney can help you make sure you get the best of both. How Union Membership Affects SSI Benefits in Pennsylvania SSI benefits are based on a person’s financial need, among other eligibility criteria. According to 20 C.F.R. § § 416.202(a)-(e), you must be blind, disabled, or aged 65 or older. You must also be a resident of the U.S. and a citizen, lawfully present alien, or child of an armed forces member living abroad. You may not have more resources or income than permitted. According to the SSA, eligible individuals should not be earning more than $1,971 per month. However, certain forms of income are not counted, and you should speak to an attorney to determine if other benefits or assistance count as income. Suppose your union membership benefits provide you with some form of financial assistance. In that case, you might be ineligible for SSI benefits, depending on how much assistance you receive and what form it is in. If you are still eligible for SSI benefits, these benefits could be reduced based on your other sources of income or support. Whether your union membership benefits count as income for purposes of calculating SSI benefits might mean the difference between getting the support you need or not. Talk to your lawyer about the union you are a member of, what kind of support you receive, the value of that support, and any other details surrounding the issue. In some cases, union benefits have little effect on SSI benefits. In others, they might cause SSI benefits to be reduced or even denied. What Do I Do if My Union Membership Changes While Receiving SSI Benefits in Pennsylvania? If you are currently receiving SSI benefits and benefits through a union membership, you must inform the SSA of any changes in your income. For example, maybe your union benefits run out or are terminated for some reason. In that case, you may continue receiving SSI benefits, but they may be adjusted since your income from other sources has been reduced. Changes in your income, resources, and living arrangements must be reported to the Social Security Administration (SSA) each month. If your union membership changes, benefits or other forms of support you might receive might also change. If your union provides you with greater assistance or benefits, your SSI benefits might be reduced or even terminated. If your union benefits cease or are reduced, you might be able to make up the difference with greater SSI benefits. How to Avoid Complications Between Union Memberships and SSI Benefits in Pennsylvania The best way to avoid complications between benefits is to speak to a disability lawyer. If you have not yet filed for SSDI benefits but already receive benefits or assistance through a union membership, talk about it with your attorney. They can help you figure out if your union benefits count as income or may otherwise be used to reduce SSI benefits. If you are currently receiving both forms of benefits and the status of one of those benefits changes, your lawyer can assist you in making sure you do not lose the value of either. For example, if your union benefits increase or are adjusted, they might jeopardize your SSI benefits. However, union benefits are not always counted when the SSA calculates SSI benefits, depending on what kind of assistance you get from your union. The rules surrounding how different benefits affect SSI benefits are very complex. Even non-monetary assistance, like food, clothing, or housing, may or may not count when adjusting SSI benefits. The best thing you can do is speak to an experienced lawyer about your situation. Contact Our Pennsylvania Disability Lawyers for Help To receive a free, confidential case evaluation, call our Philadelphia disability attorneys at Young, Marr, Mallis & Associates at (215) 515-2954.

4th Cir.: Dash BPO v. Lindberg- Dismissal for Failure to Adequately Plead Fraudulent Concealment Ed Boltz Tue, 07/09/2024 - 19:12 Summary: Dash BPO, LLC's brought claims for fraudulent concealment and under various states' Unfair and Deceptive Trade Practices Acts  after  its business relationship with Affinity Global deteriorated due to Lindberg's indictment for an unrelated bribery scheme.   Affirming dismissal by the the district court,  the 4th Circuit held that  Dash BPO had  not pleaded with the necessary particularity to establish a fiduciary or special relationship or active concealment nor had it  adequately alleged that Affinity and Lindberg fraudulently concealed Lindberg's criminal conduct during their business negotiations, which led to the loss of a lucrative contract with Bank of America. Commentary: See the related  posting regarding the North Carolina Court of Appeals decision at Causey v. Southland.    Also the Department of Justice  press release after Mr.  Lindberg was convicted after a retrial for a bribery scheme involving independent expenditure accounts and improper campaign contributions. To read a copy of the transcript, please see: Blog comments Attachment Document dash_bpo_v_lindberg.pdf (195.5 KB) Category 4th Circuit Court of Appeals

W.D.N.C.: Horne v. Credit Acceptance Corp & Horne v. Experian- Pro Se Silence and FCRA Ed Boltz Tue, 07/09/2024 - 17:38 Summary: In paired  cases,  Erica Horne  brought  pro se  actions against  Credit Acceptance Corp.,  Experian, Equifax and Transunion under the Fair Credit Reporting Act,  which, as the magistrate held,   "in its entirety contain[ed] the following factual allegation:" Plaintiff, a consumer, sent a written dispute on or about October 28, 2022, to Defendant, a data furnisher, disputing the completeness and/or accuracy of account Credit Acceptance Corp. – account number XXXXXXXXXX,1 which was in a consumer reports [sic] concerning Plaintiff prepared, maintained and published to others by Defendant, and Defendant negligently and/or willfully failed to follow reasonable procedures to assure maximum accuracy of the date in consumer reports concerning Plaintiff, and investigate, delete, or modify the disputed information, and provide a response to Plaintiff within 30 days of receipt of Plaintiff’s dispute. In ruling on the  motion by Credit Acceptance to compel arbitration, the magistrate found  that, despite Horne's pro se status and her silence, that there was a valid and enforceable arbitration agreement between the parties. (Horne had the option to reject this clause within 30 days, which she did not exercise.)  The magistrate,  however,  recommended that the motion by Credit Acceptance to dismiss be denied without prejudice. In the district court, however,  the credit bureaus  responded to Horne's same pro se silence  by successfully moving for a judgment on the pleadings. There the court  reviewed the motion under Rule 12(c) and determined that the complaint  failed to adequately plead inaccuracies in her credit report, which is necessary for claims under sections 1681e(b) and 1681i of the FCRA.    Further,  Horne's failure to respond to the  motion for judgment on the pleadings by the given deadline despite being explicitly warned that failure to respond could result in dismissal.   Commentary: Whether the magistrate was simply more patient or in a display of subtle antagonism,  subjecting  Credit Acceptance to the costs and further delays of  arbitration validates the more aggressive course taken by the CR As. To read a copy of the transcript, please see: Blog comments Attachment Document horne_v_credit_acceptance.pdf (433.72 KB) Document horne_v_experian.pdf (322.62 KB) Category Western District

One of the many controversial opinions coming from the Supreme Court at the end of its term was Loper Bright Enterprises v. Raimondo, No. 22-451 (6/28/24) which abolished what is known as Chevron deference. The commentators on the podcasts that I listen to were aghast that the Supreme Court felt that judges should hold themselves out to make difficult decisions as to clean air and water or whether to approve a prescription drug when there were agencies who had expertise in these areas.  Several commentators pointed out that it might not be a good idea to rely on federal judges to make scientific determinations after Justice Gorsuch confused nitrous oxide with nitrogen oxide in another case.  \Be that as it may, my one exposure to Chevron deference was an argument in favor of Loper Bright. During Covid, Congress authorized the Paycheck Protection Act. Businesses could receive loans which would be forgivable if they met certain benchmarks such as keeping people employed. However, the SBA in making regulations for PPP loans concluded that companies in bankruptcy should be ineligible. There was nothing in the statutory text that said anything about excluding debtors in possession from receiving PPP loans. As a result, I filed suit after seeing a similar effort succeed in another Texas Court. I did not know what Chevron deference was before filing the adversary proceeding, but it was the death of my case. Trudy's Texas Star, Inc. v Carranza (In re Trudy's Texas Star, Inc.), 2020 Bankr. LEXIS 1729 (Bankr. W.D. Tex. 2020). At the time, I felt that it was silly that the SBA would be better situated than a bankruptcy judge to read a statute and decide whether it should apply to debtors-in-possession. In my opinion, the Administrator's interpretation was not reasonable. However, this interpretation caught on and debtors in bankruptcy lost a valuable source of liquidity. It is cases like this where agency expertise became agency lawmaking that inspired the Court's decision in Loper-Bright.  

Anyone familiar with ERISA might know that this complex federal law applies to certain employee retirement accounts maintained by employers. Many might not know that ERISA also applies to health insurance plans maintained by employers. While health insurance and retirement plans are not the same, they both represent accounts and funds maintained by employers for the benefit of employees. So, how does ERISA apply to health insurance in Pennsylvania, anyway? Under ERISA, employers owe a fiduciary duty to employees and must maintain health insurance plans for their benefit. Employees may have the right to take legal action if a health insurance plan is somehow mismanaged. Before you act, talk to a lawyer about whether ERISA even covers your plan. Some plans, such as those maintained by the government or churches, are not covered by ERISA. On top of it all, health insurance plans covered by ERISA may also be covered by COBRA, which allows people who lose their health benefits to extend them under certain circumstances. For help with an ERISA claim, contact our Pennsylvania disability attorneys for a free case review by calling Young, Marr, Mallis & Associates at (215) 515-2954. How ERISA Applies to Pennsylvania Health Insurance Plans The Employee Retirement Income Security Act (ERISA) is a federal law regulating how employers manage retirement accounts, disability benefits, health insurance plans, and other accounts or benefits for employees. Many Pennsylvania workers rely on the health insurance they get through their jobs to be able to afford any health care at all. Workers who might have disabilities or people who rely on disability benefits are especially vulnerable. ERISA creates a fiduciary duty in employers. A fiduciary duty requires the fiduciary (i.e., the person in charge of the accounts) to maintain those accounts for the benefit of others. As a fiduciary, your employer must put the needs of employees before their own when it comes to health insurance plans and other benefits. For example, employers who offer health insurance plans to employees must make sure that all employees can benefit, including those with disabilities whose healthcare costs might be greater. ERISA also gives employees legal recourse if employers violate ERISA rules and regulations. There may be an appeals and grievance process employees can follow to hopefully rectify the situation. Maybe your health insurance plan was altered without any notice, and now you cannot afford medical care for your disability. In such a case, our West Chester, PA disability lawyers will help you bring the issue to your employer’s attention and get it fixed. What Kind of Health Insurance Plans ERISA Covers in Pennsylvania Before taking your claims to court, speak to an attorney about whether your health insurance plan is even covered. While many workers throughout Pennsylvania rely on health insurance, not all plans are the same, and some are not governed by ERISA. However, even if ERISA does not cover your health insurance, that does not mean that your employer may do whatever they want regarding the management of the plan. If you believe your health insurance has been put in jeopardy, speak to our team about it. While many, if not most, health insurance plans fall under ERISA, certain employers are outside this federal law. First, and perhaps most surprisingly, government employers are not covered by ERISA. If you work for a government agency or entity, your health insurance might not fall under ERISA. Common examples of government employees include police officers, public school teachers, state-level administrators, and many others. If you work for a church or another religious group or organization and have health insurance through work, your health insurance plan is also not covered by ERISA. This can be tricky to figure out, as churches and religious groups tend to employ a mix of employees and volunteers. If you are a volunteer, you likely are not eligible for health insurance through the church. However, if you are an employee, your health insurance is not covered by ERISA. Health insurance plans maintained solely to comply with Workers’ Compensation, disability, or unemployment laws are also not covered. How ERISA and COBRA Affect Pennsylvania Health Insurance Plans A fear of many employees is losing their health insurance if they get laid off or choose to switch jobs. Many people stay in jobs they do not like so that they can keep their health insurance. If you find yourself in a position where you lose your health benefits, ERISA might help you. The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1986 and amended ERISA to require certain employers to provide a temporary continuation of group health benefits to employees under certain circumstances. In short, under COBRA, you might be able to keep your health benefits for a little while, perhaps until you are able to find a new job with health insurance. COBRA may only help extend group health plan coverage in light of a “qualifying event.” Such an event might be a reduction in an employee’s hours that might make them no longer eligible for benefits or the termination of the employee from their job. How long COBRA lasts depends on the nature of the qualifying event. For example, if you lose your health coverage because you are terminated, COBRA may extend your benefits for 18 months. Family members of employees who have lost jobs might also benefit from extensions of health benefits under COBRA. Pennsylvania has a law called “mini-COBRA” that applies to small business employees in the state. Under mini-COBRA, employees of a small business, defined as having 2-19 employees, have the right to purchase a continuation of health insurance after leaving employment. An eligible employee may purchase health insurance through their former employer for up to 9 months after their employment ends. Contact Our Pennsylvania Disability Lawyers for Assistance with Your Claims For help with an ERISA claim, contact our Philadelphia disability attorneys for a free case review by calling Young, Marr, Mallis & Associates at (215) 515-2954.

If bankruptcy is in your near future, don’t try to move your assets around or transfer them, even to your family. Instead of protecting your assets, such action could have the opposite result, opening your bankruptcy case up to scrutiny and yourself up to serious consequences. If a debtor transfers assets to their family, or anyone else for that matter, any time during the two years before they file for bankruptcy, the court might look closely at the transfer to see if it was done to hide the debtor’s assets, defraud creditors, or trick the bankruptcy court. This applies to asset transfers to irrevocable trusts as well. If you are concerned about losing assets during bankruptcy, and that is why you considered transferring them to family members before learning the issues it could cause with your case, there may be other alternatives. For example, if you file Chapter 13, your assets will not be at risk of liquidation at all. If you ultimately file Chapter 7, our lawyers can identify the right liquidation exemptions to make sure your home and other assets stay untouched during your bankruptcy case. To schedule a free case assessment with Young, Marr, Mallis & Associates, call our bankruptcy lawyers today at (215) 701-6519 or (609) 755-3115. Is it Okay to Transfer Assets to Your Family Before Filing for Bankruptcy? Certain bankruptcy chapters involve the risk of losing assets to liquidation, which could deter some debtors, making them wonder whether they can transfer assets to close family to avoid losing them entirely. The Bankruptcy Code addresses this under 11 U.S.C. § 548. Any recent transfers in the two years proceeding a bankruptcy case might be scrutinized. Transfers made during that time to intentionally defraud a lender or creditor to delay repayment or made to family members or others for less than the asset’s value might be avoided by the court, meaning stopped or undone. Transferring assets to a family member specifically might draw more scrutiny during your bankruptcy case and seem preferential because of the close nature of the relationship. If you sell property or other assets relatively close to when you file for bankruptcy, the court might consider how you use the proceeds from the sale. For example, the court might decide the sale is fine if you paid for reasonable housing and living expenses for you and your family using its proceeds. However, if debtors sell assets to make irresponsible purchases or intentionally misrepresent their financial situation during bankruptcy to get a discharge, they might face serious consequences for fraudulent transfers. Debtors might face similar issues when they put assets in irrevocable trusts too close to when they file for bankruptcy. If there is an issue with recent asset transfers in a bankruptcy case, the debtor could lose their discharge for unsecured debts. There are also criminal consequences for fraudulent transfers or intentionally concealing assets during bankruptcy, according to 18 U.S.C. § 152, including possible fines and up to five years imprisonment. How Can You Protect Assets During Bankruptcy without Transferring Them to Family? Transferring assets to family or friends is not the right way to protect them or benefit the most from the bankruptcy process. If losing assets is your primary concern, our lawyers can determine whether your income is high enough to support a repayment plan, taking into account your expenses and dependents. If Chapter 7 is better suited to your situation, we can strategically choose liquidation exemptions to keep assets safe. See if You Can File a Chapter 13 Bankruptcy Case The bankruptcy chapter dictates whether or not assets are at risk of being liquidated. To determine if you can file Chapter 13, a non-liquidation bankruptcy, our lawyers can create a full financial profile of your situation. To do this, we will need certain information, such as your monthly income, recent tax returns, number of dependents, and typical expenses. We will also identify all debt liabilities and to which creditors you owe which amounts. Certain debts are dischargeable, and bankruptcy will erase them. Furthermore, after negotiating with creditors or lenders, we may be able to lower what you owe and agree to a favorable repayment plan. When debtors file Chapter 13, all debts get consolidated under the same interest rate, which is typically low so that debt does not continue to grow unchecked during the repayment period. This repayment period could last anywhere from three to five years, depending on your monthly income and outstanding debts. While you repay creditors during your Chapter 13 case, they cannot come for your assets, like your car or house. Pick the Right Liquidation Exemptions for Chapter 7 Bankruptcy For debtors who cannot afford repayment plans on top of their monthly expenses, Chapter 7 bankruptcy may be necessary. In these cases, our bankruptcy lawyers can help debtors identify the most beneficial liquidation exemptions based on the specific assets they want to protect. Typically, debtors are most concerned about safeguarding their homes and vehicles. Some states have homestead exemptions debtors can claim, but others, like Pennsylvania and New Jersey, notably do not. If your state does not have a homestead or vehicle exemption, our lawyers can confirm if you can choose federal exemptions instead. Picking exemptions from the onset of your case is important so that you know exactly which assets you can feasibly protect before filing. Sometimes, the reason for the debtor’s financial issues is the asset they want to protect, like their home. For example, if you defaulted on your mortgage, you could face foreclosure, which you can stop with bankruptcy. However, if, during bankruptcy, you do not exempt your house from liquidation, it could be taken to repay the mortgage lender, which is precisely what liquidation exemptions can help debtors avoid during Chapter 7 cases. Call Our Lawyers to Talk About Your Bankruptcy Case To schedule a free case review from Young, Marr, Mallis & Associates’ Philadelphia bankruptcy lawyers, call (215) 701-6519 or (609) 755-3115 today.

In an opinion that resolves decades of circuit court splits, the Supreme Court ruled against allowing nonconsensual third-party releases. Harrington v. Purdue Pharma, LP, No. 23-124 (6/27/24) which can be found here.  While the opinion is emphatic in its rejection of extra-textual plan provisions, the 5-4 ruling and numerous caveats mean this won't be the last time creative lawyers will be testing the limits of the Code.What HappenedHow a narrative is framed can say a lot about how a case will end up. In the lower courts, the narrative was that the chastened Sackler family agreed to contribute billions to combat the effects of the opioid epidemic and surrender their company and that nearly everyone agreed. However, Justice Gorsuch told a much different story in his opinion. According to Justice Gorsuch, the Sacklers marketed a drug that killed 247,000 people and that when one of their subsidiaries accepted criminal liability for the scheme, they devised a "milking" scheme to transfer the assets of the company to the family who then transferred them to offshore trusts. Over a period of eight years, the Sacklers took $11 billion in distributions, draining the company's assets by 75%.  After the company was faced with thousands of suits, it proposed a plan in which the Sacklers would pay back $4.325 billion over a period of years. When you figure in time value of money, the Sacklers were proposing to repay about one-third of what they received after agreeing that the company had engaged in criminal behavior. The plan provided that the Sacklers would receive a release from the company for draining its assets and would also ban claims by anyone who could otherwise sue the company. The release was striking in its breadth. It would include claims for fraud and willful misconduct (which would be non-dischargeable in a personal bankruptcy) and would extend to hundreds, if not thousands, of Sackler family members and entities.  Most creditors who voted supported the plan. However, only about 20% of the eligible creditors actually voted. The  U.S. Trustee, who the court described as "charged with promoting the integrity of the bankruptcy system for all stakeholders," objected along with various states, municipalities, tribes and individuals. The Bankruptcy Court approved the plan. However, the District Court reversed in a firmly worded opinion. The Sacklers then agreed to contribute an additional $1.175 to $1.675 billion to the plan if the eight objecting states and the District of Columbia would withdraw their objections. As noted by Justice Gorsuch, "(t)he Sacklers' proposed contribution still fell well short of the $11 billion they received from the company between 2008 and 2016." Nevertheless, the objecting states and D.C. agreed to the new proposal.  A divided panel of the Second Circuit affirmed. When the U.S. Trustee asked for a stay pending appeal, the Supreme Court decided to treat the motion as a petition for cert, which they granted. An Unusual Alignment of Justices In a surprisingly close opinion, the Supreme Court reversed the Second Circuit. The lineup of justices voting for each side was a sharp contrast to the ideological splits of some of the court's more controversial decisions. Justice Gorsuch wrote the majority opinion, joined by Thomas, Alito, Barrett and Jackson. Justice Kavanaugh authored the dissent and was joined by the Chief Justice and Sotomayor and Kagan. Justice Jackson's vote to join the majority ensured that nonconsensual third-party releases would not be allowed. This may be the only case where she and Justice Thomas were on the same side of a 5-4 decision.  It is also worth noting that Justice Kavanaugh's 54-page dissent was longer than the majority opinion, indicating that this was not a casual disagreement.A Statement of PolicyOn page 1 of the opinion, Justice Kavanaugh offers a vision of the purpose of bankruptcy which illuminates the result he later reaches.The bankruptcy code contains hundreds of interlocking rules about “‘the relations between’” a “‘debtor and [its] creditors.. But beneath that complexity lies a simple bargain: A debtor can win a discharge of its debts if it proceeds with honesty and places virtually all its assets on the table for its creditors. Opinion, p. 1. This statement is almost as iconic as proclaiming that bankruptcy is intended to provide relief to the honest but unfortunate debtor. Expect to see this statement quoted in many bankruptcy opinions to come.It's the TextWhile many pages have been written on third-party releases, Justice Gorsuch narrowed the case down to one subsection and one canon of interpretation. The subsection was section 1123(b)(6) which states that a plan may "include any other appropriate provision not inconsistent with the applicable provisions of this title." He summarized the argument for allowing third-party releases saying:As the plan proponents see it, paragraph (6) allows a debtor to include in its plan, and a court to order, any term not “expressly forbid[den]” by the bankruptcy code as long as a bankruptcy judge deems it “appropriate” and consistent with the broad “purpose[s]” of bankruptcy.  And because the code does not expressly forbid a nonconsensual nondebtor discharge, the reasoning goes, the bankruptcy court was free to authorize one here after finding it an “appropriate” provision.Opinion, at 9-10.  He had little trouble dispatching this argument. He stated:This understanding of the statute faces an immediate obstacle. Paragraph (6) is a catchall phrase tacked on at the end of a long and detailed list of specific directions. When faced with a catchall phrase like that, courts do not necessarily afford it the broadest possible construction it can bear.  Instead, we generally appreciate that the catchall must be interpreted in light of its surrounding context and read to “embrace only objects similar in nature” to the specific examples preceding it.  So, for example, when a statute sets out a list discussing “cars, trucks, motorcycles, or any other vehicles,” we appreciate that the catchall phrase may reach similar landbound vehicles (perhaps including buses and camper vans), but it does not reach dissimilar “vehicles” (such as airplanes and submarines). This ancient interpretive principle, sometimes called the ejusdem generis canon, seeks to afford a statute the scope a reasonable reader would attribute to it. Viewed with that much in mind, we do not think paragraph (6) affords a bankruptcy court the authority the plan proponents suppose. In some circumstances, it may be difficult to discern what a statute’s specific listed items share in common. But here an obvious link exists: When Congress authorized “appropriate” plan provisions in paragraph (6), it did so only after enumerating five specific sorts of provisions, all of which concern the debtor—its rights and responsibilities, and its relationship with its creditors. Doubtless, paragraph (6) operates to confer additional authorities on a bankruptcy court. But the catchall cannot be fairly read to endow a bankruptcy court with the “radically different” power to discharge the debts of a nondebtor without the consent of affected nondebtor claimants.Opinion, pp. 10-11 (cleaned up).  To simply, the answer to the question can be found by reference to the Sesame Street song "One of These Things (Is Not Like the Other)."   Because 11 U.S.C. Sec. 1123(b)(1)-(5) all refer to the debtor while the proposed interpretation of section 112(b)(6) does not, third-party releases are the one thing that is not like the others. I could go on, especially as Justice Kavanaugh offers his rebuttal to the dissent, but that is really the heart of the opinion. What Was Not DecidedA feature of recent Supreme Court opinions with bold holdings is a list of caveats saying what is not being decided. While the Court might later decide these propositions, it is not doing so today since they weren't really part of the question the Court was asked. It shouldn't seem necessary to do so, but it does help to silence commentators who might be tempted to claim that the sky is falling.The Court did not call into question consensual third-party releases. Neither did it decide "what qualifies as a consensual release or pass upon a plan that provides for the full satisfaction of claims against a third-party nondebtor." Opinion, p.19. This brings to mind the evolution of Stern v Marshall.  First, the Court held that bankruptcy courts could not decide a claim that was not at the heart of the restructuring of the debtor-creditor relationship. Stern v. Marshall, 564 U.S. 462 (2011). Then it held that bankruptcy courts could decide these claims with consent of the parties. Executive Benefits Ins. Agency v. Arkison, 575 U.S. 665 (2014). Then it held that consent could be imposed by waiver. Wellness Int'l Network, Ltd. v. Sharif (2015). Just as Stern turned out not to significantly disrupt the functioning of the bankruptcy courts, so the Court in this case leaves a lot of room for deciding just how consensual a consensual release should be. The majority also said that it would not decide the impact of third-party releases in a plan that has  been implemented. This refers to equitable mootness, a doctrine the Supreme Court has steadfastly refused to take up. While it was not necessary to say that the Court wasn't taking up equitable mootness in a case that was not equitably moot, Justice Gorsuch indicates that he knows the issue is out there. The DissentSince the majority was able to dispose of the issue in 20 spare pages, the dissent should be as circumscribed as well, right? Not right. Justice Gorsuch's fellow Trump appointee, Justice Kavanaugh, wrote a  54-page rebuttal. A dissent can be a  lot of things. Justice Sotomayor's dissent in the Trump immunity case, Trump v. United States, 2024 U.S. LEXIS 2886 (2024), was a primal scream aimed more at the general population than the Court. On the other hand, some of the dissents of Justices Thomas and Alito became placeholders for future majority opinions. However, I do think it is significant that four Justices, including the Chief, sought to articulate an alternate ground for how the bankruptcy statute should be interpreted. Here are a few highlights from the dissent that may show up in future Supreme Court opinions. When citing this language, be sure to note that a dissent, while eloquent and persuasive, is still the opinion that did not prevail. The dissent's opening paragraphs lament the harm to the opioid victims that could have benefitted from this plan. Today’s decision is wrong on the law and devastating for more than 100,000 opioid victims and their families. The Court’s decision rewrites the text of the U. S. Bankruptcy Code and restricts the long-established authority of bankruptcy courts to fashion fair and equitable relief for mass-tort victims. As a result, opioid victims are now deprived of the substantial monetary recovery that they long fought for and finally secured after years of litigation. Bankruptcy seeks to solve a collective-action problem and prevent a race to the courthouse by individual creditors who, if successful, could obtain all of a company’s assets, leaving nothing for all the other creditors. The bankruptcy system works to preserve a bankrupt company’s limited assets and to then fairly and equitably distribute those assets among the creditors—and in mass-tort bankruptcies, among the victims. To do so, the Bankruptcy Code vests bankruptcy courts with broad discretion to approve “appropriate” plan provisions. 11 U. S. C. §1123(b)(6).  In this mass-tort bankruptcy case, the Bankruptcy Court exercised that discretion appropriately—indeed, admirably. It approved a bankruptcy reorganization plan for Purdue Pharma that built up the estate to approximately $7 billion by securing a $5.5 to $6 billion settlement payment from the Sacklers, who were officers and directors of Purdue. The plan then guaranteed substantial and equitable compensation to Purdue’s many victims and creditors, including more than 100,000 individual opioid victims. The plan also provided significant funding for thousands of state and local governments to prevent and treat opioid addiction. The plan was a shining example of the bankruptcy system at work. Not surprisingly, therefore, virtually all of the opioid victims and creditors in this case fervently support approval of Purdue’s bankruptcy reorganization plan. And all 50 state Attorneys General have signed on to the plan—a rare consensus. The only relevant exceptions to the nearly universal desire for plan approval are a small group of Canadian creditors and one lone individual. But the Court now throws out the plan—and in doing so, categorically prohibits non-debtor releases, which have long been a critical tool for bankruptcy courts to manage mass-tort bankruptcies like this one. The Court’s decision finds no mooring in the Bankruptcy Code. Under the Code, all agree that a bankruptcy plan can nonconsensually release victims’ and creditors’ claims against a bankrupt company—here, against Purdue. Yet the Court today says that a plan can never release victims’ and creditors’ claims against non-debtor officers and directors of the company— here, against the Sacklers.That is true, the Court says, even when (as here) those non-debtor releases are necessary to facilitate a fair settlement with the officers and directors and produce a significantly larger bankruptcy estate that can be fairly and equitably distributed among the victims and creditors. And that is true, the Court also says, even when (as here) those officers and directors are indemnified by the company. When officers and directors are indemnified by the company, a victim’s or creditor’s claim against the non- debtors “is, in essence, a suit against the debtor” that could “deplete the assets of the estate” for the benefit of only a few, just like a claim against the company itself. Dissent, pp. 1-3.  This is a big chunk of text. However, it felt that it was important to capture the spirit of the dissent. Reading it, I have to say WOW. What a full-throated defense of bankruptcy as a solution to a "collective action problem" from two members of the Court's Republican majority. The dissent is claiming that the majority is being mean in overruling this "shining example of the bankruptcy system at work." As a bankruptcy practitioner, it warms my heart to know that four members of the Supreme Court think so highly about what we do.So where did the dissent see the law differently? First, it viewed the word "appropriate" broadly in light of "the history of bankruptcy practice approving non-debtor releases in mass-tort bankruptcies." This seems to be a weird marriage of open-ended statutory interpretation favored by the left with the history and tradition opinions of the right. However, I can't get away from the view that the dissent is arguing that the ends justify the means. The dissent comes right out and says that because this was a really good deal, that the Court should find a way to make the legislative mandate work. That is shown by this excerpt:Throughout this opinion, keep in mind the goal of bankruptcy. The bankruptcy system is designed to preserve the debtor’s estate so as to ensure fair and equitable recovery for creditors. Bankruptcy courts achieve that overarching objective by, among other things, releasing claims that otherwise could deplete the estate for the benefit of only a few and leave all the other creditors with nothing. And as courts have recognized for decades, especially in mass-tort cases, non-debtor releases are not merely “appropriate,” but can be absolutely critical to achieving the goal of bankruptcy—fair and equitable recovery for victims and creditors.Dissent, p. 5. I know I am being overly dramatic here, but it is almost as if the dissent is saying "from each billionaire according to his ability to pay, to each creditor according to the common settlement fund." While my paraphrase of Marx may be a little cheeky, there are plenty of times when the Bankruptcy Code applies a common welfare model. An individual debtor's discharge does not depend on the consent of the creditors. It is granted unless a party in interest prevails in an action under section 523 or 727, If a plan is approved by the requisite majority (2/3 in dollar amount and more than one-half in number) it is binding on all of the creditors in the class if the plan is otherwise confirmable. Given the societal impact of mass torts, whether it is opioids, sexual abuse or asbestos, maybe a collective solution is desirable. That is certainly the view of the four dissenters. What Should the Answer Be?In writing about this issue for several years, I have come to the conclusion that the ability to resolve large societal problems requires the ability to marshal third party assets in return for third-party protections but that the Code does not currently provide the authorization to do so. On the other hand, the current ad hoc system of providing relief to third parties whenever it is necessary to make a plan work is too broad to be justified. I can think of a few instances which a functional legislative (meaning not the one we have right now) might endorse. The easiest case is for channeling injunctions for insurance proceeds. Arguably this is already authorized under current law. When an insurance company contributes the full policy limits to a plan, it should be free from other claims. I also think bar orders should be enforceable. When a third party settles estate claims, it should be released from third party claims based on the same facts. The same should be true where a third-party entitled to indemnity from the debtor makes a significant contribution to a settlement fund. That was at least a part of the issue in Purdue Pharma. Some circuits, but not the Fifth Circuit, allow for bar orders. Finally, I think that there should be some situations where the vote of a class to accept a plan, perhaps by a supermajority, should bind all the members of the class, even if it grants relief to third parties.Barring a legislative solution, creative lawyers will look for ways to make releases consensual. To paraphrase Dr. Ian Malcom in Jurassic Park, lawyers will find a way.   

Leaving assets out of your bankruptcy case, even if it is an honest mistake, could have serious consequences for you and your ability to repay creditors. For example, the court might deny you a debt discharge for not listing assets, meaning you could have to pay off unsecured debts you assumed would be erased. If the court has already discharged your debt, it might revoke the discharge for failure to disclose assets. Furthermore, there are criminal consequences for not listing assets, as this is typically considered bankruptcy fraud. To avoid this situation, let our lawyers completely overhaul your assets and finances before filing your bankruptcy petition. When preparing your case, we can identify all assets and the necessary exemptions to protect them from liquidation if you file Chapter 7. For a free case assessment from Young, Marr, Mallis & Associates, call our bankruptcy lawyers now at (215) 701-6519 or (609) 755-3115. Can You Get a Debt Discharge if You Forget to List an Asset During Bankruptcy? Intentionally or mistakenly leaving assets out of your bankruptcy case could seriously hurt it and your chances of getting a discharge. When you file your bankruptcy case, you must inform the court of all your assets. This is necessary whether you file Chapter 13 or Chapter 7. The list of assets helps to explain your financial situation and gives the court a better understanding of your ability to repay creditors. The court could deny you a discharge if you do not list all assets in your bankruptcy case. Debt discharges relieve debtors of their liabilities to repay certain creditors. For example, credit card debt is typically dischargeable in bankruptcy, regardless of the chapters debtors file. The appeal of a debt discharge is attractive to many debtors, especially those with considerable unsecured debts. Not getting a debt discharge when you expected to could make you liable for repaying more debts than you anticipated, which might derail or lengthen your case. If you have already received a debt discharge and the court learns you forgot to list assets, your discharge might be revoked. Neglecting to list certain assets, especially during Chapter 7, might be a serious issue. Chapter 7 is a liquidation bankruptcy. To repay creditors for non-dischargeable debts, debtors identify assets for liquidation. While creditors can protect some assets from liquidation, such as their homes or cars, they must use liquidation exemptions to do so. Some states, like Pennsylvania, let debtors choose between state and federal exemptions, as federal exemptions typically cover more assets. Is Forgetting to List an Asset During Bankruptcy Illegal? Bankruptcy is a legal process that goes through the courts and lets people struggling with debt address it. The process itself is highly regulated, and missteps, especially ones as egregious as failing to list assets, could result in criminal consequences for debtors. Under 18 U.S.C. § 157, bankruptcy fraud includes cases where debtors intentionally file fraudulent petitions with the court or make false or fraudulent claims or representations in their cases, including failing to list assets. Penalties for bankruptcy fraud include fines of $250,000 per violation and up to five years in jail, or both. These are serious consequences; even debtors who mistakenly leave assets out of their bankruptcy cases might be penalized. Fines associated with failure to disclose assets are not dischargeable should a debtor file for bankruptcy again shortly. How to Make Sure You List All Assets During Your Bankruptcy Case Debtors can rely on our lawyers to organize their assets and financial information, prepare their bankruptcy petitions, and identify state or federal exemptions that could shield their assets from liquidation in Chapter 7 to ensure they list all assets during their bankruptcy cases. Organizing Assets and Financial Information Our bankruptcy lawyers will start by reviewing your assets and finances in full. Tell our lawyers about all assets you hold, including any and all real estate, cash, investment accounts, vehicles, and other potential assets. You should list all secured and unsecured assets to ensure you do not leave anything out of the petition. Overhauling your financial information might take some time, and our lawyers must do this before filing the bankruptcy petition and getting an automatic stay to relieve you of creditors’ harassment. Because of this, you should not delay initiating your bankruptcy case if you are overwhelmed with debt. The longer you wait to file, the more interest might accrue on unpaid debts and the greater your repayment responsibility might become. Preparing the Bankruptcy Petition and Identifying Liquidation Exemptions Our attorneys can assess your household’s current income, number of dependents, and monthly expenses when preparing your bankruptcy petition to see how quickly you can repay creditors based on your present financial situation. While preparing a petition for Chapter 7, our lawyers can identify exemptions to shield assets from liquidation. Some debtors might not list assets for fear of losing them, like a home or car. Carefully picking liquidation exemptions or seeing if your income qualifies you to file Chapter 13 could let you keep the desired assets using the right channels without risking losing a bankruptcy discharge or facing criminal consequences for bankruptcy fraud. Before filing your petition with the court, our attorneys will ensure it is complete and accurate. In addition to listing all of your assets, our lawyers must also give the court a detailed assessment of your total debts, a full list of your creditors, and other financial information, like your monthly income and expenses. The court bases debt discharges and repayment plans on this information, so it must be wholly accurate. Because the bankruptcy process is extremely complex, debtors risk leaving out important information if they file without legal assistance. Call Our Attorneys to Start Your Bankruptcy Case Now Call Young, Marr, Mallis & Associates at (215) 701-6519 or (609) 755-3115 to discuss your case for free with our Philadelphia bankruptcy lawyers.

If you are hurt in a car accident during your chapter 13, tell your bankruptcy lawyer. During the five (or three) years of your Chapter 13, you are required to update the court if you’re injured in a car accident.I don’t see that written in the law anywhere, but judges say that’s so. Not doing it can really hurt you–especially if you’re hurt in a car accident. (Or medical mistake.)Hurst in a car accident during your Chapter 13? Tell your bankrutpcy lawyer.Under Virginia law, money you get from a personal injury–like a car accident or medical mistake--belongs to you. It does NOT belong to the bankruptcy court.  But it only belongs to you if you claim it belongs to you. And you have to tell the court about it so you can then claim it.If you don’t tell the court about it, then it belongs to the court. (Does that make your head spin? It is tricky.)The bankruptcy court is probably NOT going to notice on their own. But the insurance lawyer for the opposing party will. Because of that accident, you might have a lot of money coming to you. But when the insurance lawyer sees your bankruptcy–and they look–poof, that money is gone. The post Car Accident? Tell Your Lawyer appeared first on Robert Weed Bankruptcy Attorney.

North Carolina Bankruptcy Criminal Indictments Ed Boltz Tue, 07/02/2024 - 19:55 Attached are three criminal indictments  of bankruptcy debtors in North Carolina,  all of which largely relate  to undisclosed transfers or transactions after the filing of their bankruptcy. Status: Swicegood:  Mr.  Swicegood appears to have pleaded guilty as to Count One of  concealing property from the bankruptcy trustee,  with the other counts being dismissed.  He was sentenced  on April 24,  2024  to  four (4) years probation and a $100 special assessment. Purdy:  Ms.  Purdy pleaded guilty to making false statements to obtain a federally funded mortgage on May 22,  2024,  with sentencing in August. Colbert:  Ms.  Colbert's case is still pending,  with  trial  preliminarily  set for August. Additionally,  while  the creditor eventually made the wise decision to obtain legal counsel, who negotiated a resolution,  previously New Bro's Motors was  subject  to civil and not criminal contempt,  with the attached  order directing the United States Marshals Service to take its  owner into custody fortunately being avoided. Whether there are other criminal cases arising from bankruptcy,  against debtors or creditors,  is likely only known by the AUS As and perhaps the B As,  but hopefully this is neither a trend nor that any of these cases bleed over onto others, especially their attorneys. To read a copy of the transcript, please see: To read a copy of the transcript, please see: To read a copy of the transcript, please see: To read a copy of the transcript, please see: Blog comments Attachment Document colbert_indictment.pdf (264.32 KB) Document jerry_todd_swicegood_indictment_compressed.pdf (544.54 KB) Document purdy_criminal_information.pdf (49.48 KB) Document show_cause_order_3_castaneda_5-13-24.pdf (157.8 KB) Category Federal Cases