Readers of our posts are aware that at Shenwick & Associates we do personal and business bankruptcy filings and workouts for many clients. In addition, we review settlement agreements for clients so that the settlement payments are not captured by section 547 of the Bankruptcy Code as a preference (also known as "preference proofing a settlement agreement").   This week we were retained by 2 clients who wanted their settlement agreements reviewed regarding preference exposure.This work is usually referred to us by the client or the client's litigator. There are generally 3 signs that indicate that a defendant may file for bankruptcy protection either after the settlement agreement is signed or after making some or all of the payments required by the settlement agreement. During settlement negotiations, the defendant discusses filing for bankruptcy.During settlement negotiations, the defendant discusses closing its business orThe defendant asks for more than 30 days to make the initial settlement payment. In the event that a defendant files for chapter 7 bankruptcy within 90 days of making a payment to the plaintiff,  that payment may be a voidable preference and subject to recapture or clawback by a bankruptcy trustee in a chapter 7 bankruptcy proceeding.Clients will be extremely upset and point fingers if their settlement payments are clawed back by a bankruptcy trustee or they need to defend a lawsuit (adversary proceeding) by a bankruptcy trustee seeking to recapture those payments.What can be done to preference proof a settlement payment? Below are some suggestions and strategies,  but a risk will always remain until 90 days have passed from the date of payment.Seek financial statements from the defendant or better yet a financial statement under penalty of perjury (an Affidavit of Net Worth), Have your CPA or a bankruptcy attorney review those financial statements.Seek a guarantee of the payments from a 3rd party.Make the plaintiff a secured creditor by receiving a mortgage on real estate or a security agreement and ucc-3 on another asset like accounts receivable. Structure the settlement agreement so payments are made sooner rather than later.Have the defendant stipulate to a judgment or a confession of judgment and have the plaintiff provide a satisfaction, 90 days after payment is made.Delay providing a release to the defendant until 90 days have passed from payment.Use the “earmarking doctrine” which provides that payments that are supplied by a 3rd party such as a  bank or a malpractice insurer  and earmarked for payment to a creditor are not preferential. Language should be included in the settlement agreement that preserves the plaintiff’s claim if any settlement payments are recaptured.Finally the settlement agreement should state that if the defendant files for bankruptcy the automatic stay, provided for in section 362 of the bankruptcy code is deemed lifted with respect to the Plaintiff.Although no single factor may win the day, a plaintiff should attempt to obtain as many of the above points as possible.Plaintiffs or their counsel having questions about settlement agreements and preferences should contact Jim Shenwick, Esq. 212-541-6224 or jshenwick@gmail.com

A new opinion from the Fifth Circuit highlights the perils of class proofs of claim, something I recently wrote about here. In West Wilmington Oilfield Claimants v. Nabors Corporate Services, Inc. (Matter of CJ Holding Company), Case No. 21-20394 (5th Cir. 3/10/22), the Fifth Circuit upheld a bankruptcy court decision which denied creditors covered by a putative class claim permission to file late claims. The opinion can be found here. What Happened In 2015, two former employees of an oilfield services company filed a class action in California state court. C & J Well Services, the defendant, removed the case to federal court. The defendant sought to enforce a company-wide arbitration agreement and class action waiver. The district court denied the motion. C & J appealed the case to the Ninth Circuit. In July 2016, while the appeal was pending, C & J and several of its affiliates filed bankruptcy in the Southern District of Texas. The Court entered an order setting a bar date and the deadline was advertised in national publications as well as by notice sent to creditors. The putative class representatives filed a proof of claim on behalf of the class for over $14 million. Twenty-seven individual claimants filed their own proofs of claim. A plan was confirmed which denied and expunged all claims filed after the bar date. The Debtor also entered into a settlement agreement with Nabors Corporate Services to indemnify it for any allowed claims and authorized Nabors to object to any claims subject to the indemnity agreement. Nabors was an affiliate of a company which had merged into the Debtor which had employed the persons bringing the employment claims. In February 2017, the bankruptcy court issued an order allowing the parties to the Ninth Circuit appeal to prosecute the appeal. In February 2018, the Ninth Circuit reversed the District Court and held that the arbitration and class waiver provisions were enforceable. Ninety-six claimants filed individual arbitration proceedings. However, only twenty-seven of these had filed individual proofs of claim. In October 2018, Nabors filed an omnibus objection to the various employment proofs of claim. The Bankruptcy Court ruled that the two class representatives and the twenty-seven additional creditors who had filed individual proofs of claim could proceed with the arbitrations but that the remainder could not rely on the class proof of claim. The Bankruptcy Court advised the claimants who had not filed claims that they could request leave to file late claims. The non-filing claimants did not file their motion for late-filed claims until August 2019, nearly two years after the bar date. After a hearing the Bankruptcy Court denied the motion. The claimants appealed to the District Court which reversed. Nabors then appealed to the Fifth Circuit.  The Court's RulingThe Fifth Circuit ruled that the Bankruptcy Court was correct in denying leave to file a late claim. How a tardily filed claim treated depends on the chapter. In Chapter 7, a late-filed claim is allowed but is subordinated to all timely-filed claims. 11 U.S.C. Sec. 726(a)(3). There is no provision for late-filed claims in Chapter 13, except that a debtor or trust may file a claim for a creditor within thirty days from the original bar date. In Chapter 11, a claim may be filed after the bar date if the late filing was the result of "excusable neglect." The Supreme Court has established a four-part test for excusable neglect: (1) “the danger of prejudice to the debtor,” (2) “the length of the delay and its potential impact on judicial proceedings,” (3) “the reason for the delay, including whether it was within the reasonable control of the movant,” and (4) “whether the movant acted in good faith.” Opinion, p. 8. The Fifth Circuit concluded that the risk of prejudice to the debtor weighed in favor of the claimants because the claims were known to the debtor and because Nabors had agreed to indemnify the debtor.  However, the length of delay was another story. The creditors waited two years and nine months after the bar date had passed and one year and seven months after the Ninth Circuit held that the class action was not a viable remedy.  Adding 67 more arbitrations would add anywhere from two to three months to years to the process.  Next the court found that the claimants had failed to reasonably explain the cause for the delay.  Excusable neglect "is the failure to timely perform a duty due to circumstances that were beyond the reasonable control of the person whose duty it was to perform." The Court found that most of the reasons proffered for the late filings were within the reasonable control of the creditors.  Finally, the Court ruled against the claimants on the good faith prong. The Debtors argue that the Claimants’ and their counsel’s failure to act diligently throughout the bankruptcy proceeding was so severe that it undermines their argument that they acted in good faith. We agree. To be sure, we have not held authoritatively that lack of diligence constitutes bad faith per se. Nor do we do so now. But other courts have held, in persuasive fashion, that lack of diligence can at least cast doubt on a claim of good faith.Opinion, p. 19. Thus, the Fifth Circuit agreed with the Bankruptcy Court with regard to three out of four factors. The Court noted that the standard of review was deferential to the Bankruptcy Court and thus reinstated its ruling denying leave to amend. Why It's SignificantThis case illustrates the danger in filing a class proof of claim. In evaluating good faith, the Court stated:Granted, the majority of circuits that have addressed the issue permit class proofs of claim. (citation omitted). However, this court has not spoken definitively on the issue. Yet, since 2016, the Claimants have ostensibly proceeded under the assumption that a class proof of claim would ultimately be available to them. Such is not settled law in this Circuit, and the Claimants’ reliance on unsettled law casts serious doubt on their claim of good faith.Second, even if the Claimants had moved the bankruptcy court to apply Rule 23 to their purported class proof of claim, they had a second hurdle to overcome. Namely, the bankruptcy court would still have had to certify the class proof of claim. Only once the bankruptcy court determines, in its discretion, that Rule 23 applies does it then evaluate whether the proposed class meets Rule 23’s requirements. Opinion, pp. 20-21. There are many things that can go wrong when individual creditors rely on a putative class rep to file a class claim. First, the jurisdiction might conclude that there is no authority for class claims. The class rep might fail to seek class certification in the bankruptcy court. If class certification is sought and denied, it would likely be after the bar date. One question that is left unanswered by the opinion is the specific notice that the individual claimants received. Notice is essential to due process. It is the debtor's burden to provide that notice. Given that twenty-nine claimants knew to file claims, there is an inference that notice was good.  So what should the putative class reps have done? First, they should have moved for class certification immediately in the Bankruptcy Court. As I have discussed elsewhere, Fed.R.Bankr.P. 7023 allows class actions in bankruptcy. However, there is no specific rule authorizing class proofs of claim. Thus, a class claim must be treated as a class action within the bankruptcy. Second, the putative class reps should have moved to extend the bar date for claimants within the class prior to expiration of the bar date. It is much easier to extend the bar date before it has expired than it is to get permission for a late-filed claim. Finally, this case illustrates why creditors should engage knowledgeable bankruptcy counsel before dealing with these difficult issues. 

A trustee who sought "turnover" of amounts owed under a construction contract had an arbitration clause in that contract enforced against him. The Bankruptcy Court found that the bankruptcy exception to enforcement of an arbitration clause was narrow and did not apply to a construction dispute. Satija v.  Kella (In re Davila General Contractors, LLC), Adv. No. 21-1047 (Bankr. W.D. Tex. 3/9/22). The order can be found on CM/ECF at Docket #23.What HappenedDavila General Contractors, LLC entered into an AIA Contract with Higginbotham Concepts, LLC to construct improvements for a Sun Auto Store. The contract contained an arbitration clause. Disputes arose between the parties and  Higginbotham sought to terminate the contract. Immediately prior to bankruptcy, Davila brought suit against Higginbotham seeking to recover over $158,000.After Davila filed, the Trustee filed suit against Higginbotham for "turnover" of the contract receivable under 11 U.S.C. Sec. 542. Higginbotham filed a Motion to Abate Proceedings and Compel Arbitration. The Trustee responded that arbitration should not be compelled in a core proceeding and that the contract was no longer enforceable because it had been terminated and/or rejected. The Court's RulingThe Court granted the Motion. The Court noted that in the Fifth Circuit, there is a two-part test for determining whether to allow arbitration.First, the underlying nature of the proceeding must derive exclusively from the provisions of the Bankruptcy Code.  Second, requiring arbitration must conflict with the purposes of the Bankruptcy Code. Order, p. 2. The Court found that labeling a cause of action as one for turnover was not sufficient since "Congress intended section 542 to apply to claims for tangible property and money due to the debtor without dispute which are fully matured and payable on demand, not to liquidate disputed contract claims." Order, p. 2 (cleaned up). Finally, the Court found that ordering arbitration would not conflict with the purposes of the Bankruptcy Code. "This is a chapter 7 case the goal of which is to liquidate assets and resolve claims. Both functions can be accomplished by arbitration." Order, p. 3. Finally, the Court found that terminating or rejecting the contract would not affect the arbitration clause. The Court noted that a party should not be able to escape the reach of an arbitration clause merely by breaching a contract (which is what rejection entails).  The Court also cited Nolde Bros. v. Loc. No. 358, Bakery & Confectionery Workers Union, AFL-CIO 8, 430 U.S. 243, 253-255 (1977) which holds that parties' obligations under an arbitration clause "survive contract termination when the dispute is over an obligation created by the expired agreement." Order, pp. 3-4.Judge Davis declined to follow a contrary ruling by his Texas colleague Judge Stacy Jernigan.  The Trustee had relied upon Highland Capital Management v. Dondero (In re Highland Capital Management), 2021 Bankr. LEXIS 3314 (Bankr. N.D. Tex. 2021), which in turn had relied on Janvey v. Alguire, 2014 U.S. Dist. LEXIS 193394 (N.D. Tex. 2014). Judge Jernigan had denied arbitration based upon two grounds. The first was that the arbitration clause was contained within an executory contract which had been rejected. When an executory contract has been rejected, it can no longer be enforced through specific performance but rather the contract counterparty has a claim for damages. This ruling was grounded on a U.S. District Court opinion in the Stanford Ponzi Scheme litigation and an article by the renowned Prof. Jay Westbrook. Judge Davis found that when the Fifth Circuit affirmed the Janvey v. Alguire decision on other grounds it cautioned against relying on the broad rationale used by the District Court.  In his oral ruling, Judge Davis stated that while he was reluctant to disagree with Judge Jernigan and Prof. Westbrook, he had worked on the Stanford cases as a practitioner and federal equity receiverships were considerably different than bankruptcy cases. Judge Jernigan also had an alternative rationale that the parties had waited too long to request arbitration. That was not a factor in Judge Davis's case.What Does It Mean?Many contracts have arbitration clauses. Many bankruptcy lawyers (myself included) have little experience with arbitration. Nevertheless, arbitration is one of the items in a defendant's toolkit to move a dispute to a different tribunal. The Trustee's suit for turnover was essentially a suit for breach of a contract containing an arbitration clause. The Trustee could not simultaneously seek damages under the contract and disavow the part of the contract containing the arbitration clause.I have three final thoughts here. First, when parties want to argue for or against arbitration in Texas bankruptcy courts, they now have opposing opinions from two well-respected Bankruptcy Judges. While the Davis opinion is considerably shorter than Judge Jernigan's ruling, it packs a lot of substance into a few pages. Second, the arbitration clause was included in an AIA form contract which was presumably prepared by the Debtor. The pre-petition Debtor must have thought that arbitration would give it some benefit, although it later ignored the clause and filed suit in state court. Including an arbitration clause in a contract benefits both the party that put it there and the counterparty, either of whom can choose or enforce or ignore it. Finally, calling something an action for turnover does not transform a breach of contract claim into a core proceeding. I remember when bankruptcy lawyers would routinely sue to recover on accounts receivable and call the suit a turnover action. However, as aptly pointed out by Judge Davis, turnover only applies to tangible property, such as a car, liquidated, undisputed amounts. Labels are not magic and breach of contract suits are still non-core proceedings.  (Author's note: Readers may be curious as to why I chose to write about an unpublished order containing little more than two pages of text. I was in Judge Davis's court for another matter and heard his oral ruling on this case and it sounded interesting so I decided to look it up.). 

 One of the benefits of holding property or doing business through a limited liability company is that "entry of a charging order is the exclusive remedy by which a judgment creditor of a member or of any other owner of a membership interest may satisfy a judgment out of the judgment debtor's membership interest." Tex.Bus.Org. Code Sec. 101.112(d). But just how exclusive is that right? A recent Fifth Circuit opinion holds that a court may impose additional conditions on a judgment debtor's LLC in the name of carrying out the court's orders.  Thomas v. Hughes, Case No. 20-50827 (5th Cir. 3/3/22), a copy of which can be found here.What HappenedLou Ann Hughes was an attorney representing Performance Products, Inc. After Performance Products, Inc. filed Chapter 7 bankruptcy, the Chapter 7 Trustee, Johnny Thomas, and another party sued her for breach of fiduciary duty and other causes of action.  After a jury trial, the court rendered judgment against her for nearly $4 million. Prior to litigation being filed, Hughes owned a piece of real estate in San Antonio, Texas. She formed M.G. & Sons, LLC as a single member LLC and transferred the real estate into it. In September 2020, the U.S. District Court entered a charging order against Hughes's interest in M.G. & Sons stating that the Plaintiffs “have the right to receive any distribution to which Hughes would otherwise be entitled in respect of her membership interest in M. G. & Sons, LLC.” The order went on to provide that:Hughes and M. G. & Sons, LLC must obtain leave of this court before [a)] transferring the Property to any third party; b) transferring any funds to any third party except for transactions in the ordinary course of business; or c) transferring Hughes’[s] interest (or any part thereof) in M. G. & Sons, LLC to any third party.Opinion, p. 3. Hughes appealed contending that the additional language exceeded the "exclusive" remedy of a charging order under Texas law.The RulingThe Fifth Circuit analyzed the order under an abuse of discretion standard. It wrote that: The order at issue, in addition to charging Hughes’s distributions from M. G. & Sons, requiresHughes and M. G. & Sons to obtain leave from the district court before transferring the Property, any funds (excepting transactions in the ordinary course of business), or Hughes’s membership interest to any third party. Hughescontends that this restriction constitutes an improper “legal or equitable remed[y] with respect to[] the property of the limited liability company,” prohibited by the charging order statute. And because a charging order is the “exclusive remedy” by which Pearcy and Thomas,as judgment creditors, may satisfy their judgment out of Hughes’s interest in M. G. & Sons, Hughes asserts that the restriction on asset transfers is invalid. We disagree with Hughes’s reading of the district court’s order. It is axiomatic that federal courts possess “inherent power to enforce [their] judgments.” Peacock v. Thomas, 516 U.S. 349, 356 (1996); see also Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 577 (5th Cir. 2005) (“District courts can enter injunctions as a means to enforce prior judgments.”). Likewise, the Texas Supreme Court has held that “every court having jurisdiction to render a judgment has the inherent power to enforce its judgments” and “may employ suitable methods” to do so. Arndt v. Farris, 633 S.W.2d 497,499 (Tex. 1982). “Those methods include, among other things, chargingorders and injunctive relief.” M.W.M., 2020 WL 6054337,at *2. In M.W.M., the trial court entered a charging order that “charged” a “[f]ather’s interest in certain entities with [his ex-wife’s] judgments and ordered those entities not to pay [the f]ather any money or expend any money for [his] personal benefit until the judgments were paid.” Id. at *1. The father argued on appeal that the order “act[ed] as an injunction” and thus exceeded the court’s authority under the charging statute. Id. at *3. But the Texas Court of Appealsrejected that argument,finding that the statute “was not the trial court’s sole means of enforcing its judgments.” Id. Instead, the court held that “[i]njunctive relief is an available means to enforce a judgment.” Id.And in doing so, it affirmed the order’s restrictions on the LL Cs’payments as a form of injunctive relief.Id. The same reasoning applies here. The district court entered a valid charging order, requiring “any distribution to which Hughes would otherwise be entitled in respect of her membership interest in M. G. & Sons” to go to satisfy Pearcy and Thomas’s judgment. See Tex. Bus. Orgs. Code Ann. § 101.112(a)–(b). Then the district court added injunctive relief as a means of enforcing its judgment, just as in M.W.M. The district court did not abuseits discretion in fashioning reliefas it did.Opinion, pp. 5-7.  The Court did find that it was an error to grant relief against the LLC, since it was not a party to the action. However, it found that it was proper to require the judgment debtor, as sole owner of the LLC, to seek court permission before alienating the assets of the LLC.Implications for Owners of LL CsUnder the Fifth Circuit's opinion, creditors cannot directly access property owned by a limited liability company to satisfy debts of a judgment debtor. However, at the same time, those assets are not fully immunized. They remain safe while they are within the protective shield of the LLC. However, a court may prevent a judgment debtor from circumventing the charging order remedy. The injunctive language should be part of a collection lawyer's toolkit. In one of the James Bond movies, Bond is fighting with a Russian agent over a piece of top secret equipment when it goes sailing off a cliff. Bond says words to the effect of "That's detente for you. I don't have it and you don't have it." Bond's words effectively describe the effect of a charging order on an LLC. The judgment creditor can't access the LLC assets but neither can the judgment debtor. There are other ways that a single member LLC may be vulnerable as well. Tex.Civ.Prac. & Rem. Code Sec. 31.002(f) allows a court to appoint a receiver over the judgment debtor's non-exempt assets. Could a receiver be authorized to dissolve a single-member LLC and get at the asset that way? That is a much closer question than the one addressed here by the Fifth Circuit, but it is certainly a risk. This risk can be minimized by forming multi-member LL Cs. It can be further limited by including language in the LLC's governing documents that a member subject to a charging order or under the control of a receiver, may not vote on certain critical issues, such as disposing of assets. Part of the reason that the injunctive language in this case worked was that the LLC had a single member so that enjoining the owner effectively bound the LLC. This would not be the case if the LLC had multiple members. As a caveat, this might not be true if the second member of the LLC was married to the judgment debtor since the spouse's LLC interest would likely be community property.  

Bustle reports that actor Andrew Garfield claims bankruptcy was one of the best things that has ever happened to his family. His roles in The Social Network and The Amazing Spiderman brought Garfield fame and success, but his family had not always been so financially fortunate. Garfield looks back on those finacial struggles and views them in a somewhat positive light because he and his family were fortunate enough to learn important life lessons came from those struggles. When Garfield was about 12 years old, his father became bankrupt. Garfield claims it was the best thing to happen to their family because his father “…realized all the people he loved were still there… his wife, his kids, his friends, himself. He was brought to his knees and totally humbled, and then he started doing more of what he was called to do.” His father then went on to do what he loved: he became a swimming coach at a local club in Surrey, England. Seeing what his father went through taught Garfield a very valuable life lesson. “My main goal in this life is to cultivate and rub up against the people, the places, the projects, the practices — that’s alliteration there with the p’s — that make me feel most alive”. Seeing his father burdened financially and come out of it a happier person is what gave Garfield his drive to take up passion projects. This passion he accumulated displays in his successful career. In his 15+ year long career, Garfield has obtained hundreds of nominations including two Academy Award Nominations and has won several awards including a Golden Globe award & Tony Award. Garfield & his family are proof that some people just need a second chance. .fusion-button.button-1 {border-radius:2px;}Read The Full Article.fusion-body .fusion-builder-column-0{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-0 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:1138px) {.fusion-body .fusion-builder-column-0{width:100% !important;}.fusion-builder-column-0 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:900px) {.fusion-body .fusion-builder-column-0{width:100% !important;}.fusion-builder-column-0 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-1{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;} The post Andrew Garfield Claims Bankruptcy Was The “Best Thing” That Happened To His Family appeared first on Allmand Law Firm, PLLC.

Bustle reports that actor Andrew Garfield claims bankruptcy was one of the best things that has ever happened to his family. His roles in The Social Network and The Amazing Spiderman brought Garfield fame and success, but his family had not always been so financially fortunate. Garfield looks back on those finacial struggles and views them in a somewhat positive light because he and his family were fortunate enough to learn important life lessons came from those struggles. When Garfield was about 12 years old, his father became bankrupt. Garfield claims it was the best thing to happen to their family because his father “…realized all the people he loved were still there… his wife, his kids, his friends, himself. He was brought to his knees and totally humbled, and then he started doing more of what he was called to do.” His father then went on to do what he loved: he became a swimming coach at a local club in Surrey, England. Seeing what his father went through taught Garfield a very valuable life lesson. “My main goal in this life is to cultivate and rub up against the people, the places, the projects, the practices — that’s alliteration there with the p’s — that make me feel most alive”. Seeing his father burdened financially and come out of it a happier person is what gave Garfield his drive to take up passion projects. This passion he accumulated displays in his successful career. In his 15+ year long career, Garfield has obtained hundreds of nominations including two Academy Award Nominations and has won several awards including a Golden Globe award & Tony Award. Garfield & his family are proof that some people just need a second chance. The post Andrew Garfield Claims Bankruptcy Was The “Best Thing” That Happened To His Family appeared first on Allmand Law Firm, PLLC.

Supreme Court nominee Judge Ketanji Brown Jackson has played a variety of roles in her legal career. She has been a public defender, an attorney in private practice, a member of the U.S. Sentencing Commission, a U.S. District Judge and a Court of Appeals Judge. Unfortunately, these jobs have given her scant exposure to bankruptcy law.Below I will explore all three of her bankruptcy related opinions (out of a total of about 600). A Small Exposure to Bankruptcy She had two slight opinions in an appeal dealing with father and son debtors in Washington, D.C. and Tennessee with overlapping property interests. In the case, she was faced with rather mundane requests for a stay pending appeal and to supplement the record. In the Washington, D.C. case, the father claimed a homestead exemption and the bankruptcy judge overruled an objection to the exemption. In the Tennessee case, the trustee sought to sell whatever interest the estate might have in the D.C. property. The creditors sought a stay pending appeal in the appeal of the exemption appeal on the theory that the appeal of the D.C. order could affect proceedings in the Tennessee bankruptcy court. The appellants first filed their motion in the District Court. Faced with an order to show cause why they had not sought relief in the bankruptcy court first, they withdrew their motion and re-filed it in the bankruptcy court. The bankruptcy court denied the motion on the basis that the order being appealed could not have any possible effect on the estate being administered in Tennessee. Judge Ketanji Brown Jackson wisely adopted the Bankruptcy Judge's reasoning and denied the motion when filed in her court for the second time. Brekelmans v. Salas (In re Salas), 2019 U.S. Dist. LEXIS 111597 (D.D.C. 2019). This insignificant case shows that Judge Jackson is familiar with the Bankruptcy Rules and has the good sense to defer to a bankruptcy judge. In the same appeal, the appellants sought to supplement the record with statements made by the father and son debtors after the date of the order being appealed. In the alternative, they sought to remand the case to the bankruptcy court for further proceedings. Judge Jackson explained that the record could not be supplemented with evidence that could not have been available to the bankruptcy court in the first place. She treated the alternative request to remand the case as a request to voluntarily dismiss the appeal, which she granted. Salas v. Salas (In re Brekelmans), 2020 U.S. Dist. LEXIS 1582 (D.D.C. 2020).  This second opinion showed good common sense even if the issues were not earthshaking. Judge Jackson also showed remarkable patience in this opinion and the prior one with litigants did not seem to grasp basic concepts.  In another case, Judge Jackson considered whether a plaintiff who had failed to list certain FDCPA claims in his schedules had standing to pursue them in Judge Jackson's court. Dalley v. Mitchell Rubenstein & Assocs., 172 F.Supp. 3d (D.D.C. 2016).  The defendant moved to dismiss, arguing that the plaintiff lacked standing and that the claims were barred by judicial estoppel. The debtor argued that he had exempted the claims under the wild card exemption and that they were also exempt as claims for personal injury. Judge Jackson concluded that upon filing the bankruptcy case that the claims had vested in the bankruptcy estate and that the trustee had not abandoned them.  She also rejected the exemption argument. First, she noted that the FDCPA case did not allege bodily injury and therefore could not fit within that exemption. She also concluded that a debtor who makes a wild card exemption has an interest in the proceeds of litigation but not the ability to pursue the claim itself. This case demonstrates that Judge Jackson has some familiarity with consumer bankruptcy concepts.A Respected Judge Having exhausted Judge Jackson's bankruptcy jurisprudence, I could end here but will add a bit more. A LEXIS search turns up 681 opinions with her name. These include her many opinions as a U.S. District Judge. There are also opinions where she was an advocate during her time as a public defender and an attorney with Morrison & Foerster. There are also a handful of opinions in which she was one of a large group of judges named as defendants. The final category are opinions in which other judges praise her work. The Fifth Circuit found her "excellent opinion" to be persuasive in Forrest General Hospital v. Azar, 926 F.3d 221 (5th Cir. 2019).  In Wall v. Reliance Standard Life Insurance Co., 2022 U.S. Dist. LEXIS 34744 (D.D.C. 2022) and Da'Vage v. D.C. Housing Authority, 2022 U.S. Dist. LEXIS 16215 (D.D.C. 2022), her former colleagues in the District Court for Washington, D.C. cited her opinions in support of their reasoning. In reading through her opinions, I could find only a handful of instances in which her decisions were reversed. A Sampling of Judge Jackson's Opinions (That Probably Won't Be Mentioned At Her Confirmation Hearing) When Judge Jackson appears for her confirmation hearing, she will no doubt be condemned as an activist in judge's robes. However, her actual record is much more complex. Her most well-known opinion is probably Committee on the Judiciary v. McGahn, 415 F.Supp. 3d 148 (D.D.C. 2019), aff'd in part, rev'd in part, 2020 U.S. App. LEXIS 38298 (D.C. Cir. 2020)(en banc). In this case, former White House counsel Don McGahn asserted absolute immunity from being compelled to give testimony before the House Judiciary Committee, an assertion Judge Jackson rejected. In her massive opinion, she stated:Stated simply, the primary takeaway from the past 250 years of recorded American history is that Presidents are not kings. This means that they do not have subjects, bound by loyalty or blood, whose destiny they are entitled to control. Rather, in this land of liberty, it is indisputable that current and former employees of the White House work for the People of the United States, and that they take an oath to protect and defend the Constitution of the United States. 415 F.Supp. 3d at 213. On appeal, the en banc Court affirmed her holding that the Judiciary Committee had standing to seek to enforce its subpoena but remanded for further consideration of McGahn's challenges. While the McGahn opinion was unfavorable to the power of the Executive Branch, she had plenty of opinions where she deferred to Executive power. In Sierra Club v. United States Corps of Engineers, 990 F. Supp. 2d 9 (D.D.C. 2013), she refused to enjoin construction of a pipeline. Her opinion was later cited as authority to deny injunctive relief against construction of the XL Keystone Pipeline. In Las Americas Immigrant Advocacy Center v. Wolf, 507 F. Supp. 3d 1 (D.D.C. 2020), she ruled for the Department of Homeland Security on a case involving where persons seeking asylum would be housed prior to a credible fear review.  In Campaign for Accountability v. United States Department of Justice, 486 F.Supp. 3d 424 (D.D.C. 2020), she found that most of the Office of Legal Counsel opinions sought by an advocacy group were not subject to mandatory disclosure. In Prince v. Kobach, 2020 U.S. Dist. LEXIS 215880 (D.D.C. 2020), she found that a voter lacked standing to bring claims related to the election of Donald Trump.In another interesting opinion which cannot be interpreted on a strictly liberal-conservative spectrum, she implemented the First Step Act to reduce the sentence of a veteran suffering from PTSD who had an enhanced risk of exposure to Covid-19 from 41 months to time served. United States v. Johnson, 464 F.Supp. 3d 22 (D.D.C. 2020).  Some of her most entertaining opinions involved pro se litigants. In Brailich v. Fox News Network, Ltd.,2020 U.S. Dist. LEXIS 217943 (D.D.C. 2020), a litigant accused Fox News of directing hate speech toward him. Judge Jackson found that the complaint was "so broad and so vague that the pleading does not give the defendants fair notice of the claims asserted against them." In Clark v. Peru Republic, 2020 U.S. Dist. LEXIS 225310 (D.D.C. 2020), she found that a 133-page complaint failed to met Rule 8(a)'s requirement of a short and plain statement. "A complaint such as this this is excessively long, rambling, disjointed, incoherent, or full of irrelevant and confusing material will patently fail Rule 8(a)'s standard." In Naillieux v. Chain of Command, 2020 U.S. Dist. LEXIS 215882 (D.D.C. 2020), she found that "what factual contentions are identifiable are baseless and wholly incredible." In Kirkland v. Barr, 2020 U.S. Dist. LEXIS 215878 (D.D.C. 2020), she rejected a mandamus petition which "seeks to involve the federal government, through U.S. Attorney General William Barr, in paternity proceedings in Kansas courts."  What these short opinions show is that while much of her work involved dry and technical interpretation of federal statutes and regulations, she can wield a sharp pen at times. Finally, for those who are wondering, her name comes from Ketanji Onyika, which her parents were told means "lovely one." 

 CBS News (link below) has an article about impact of Omicron virus on restaurants. https://www.cbsnews.com/amp/news/restaurants-closing-2022-without-aid-restaurant-revitalization-fund/#appAt Shenwick & Associates we have been working with many restaurants whose business has been impacted by Omicron and the guarantors of those leases. Jim Shenwick 212 541 6224 jshenwick@gmail.com

Bankruptcy cases frequently have transfers of the bankruptcy estate’s property through court- approved sales.[2] Sometimes those sales are challenged.[3] Often those challenges are overruled.[4] Sometimes the order approving the sale is appealed… The post Do Bankruptcy Settlements (Fed.R.Bankr.P. 9019) On Appeal Get The Same Protections (11 U.S.C. § 363(m)) As Bankruptcy Sales (11 U.S.C. § 363(b)) On Appeal? [1] appeared first on Wayne Greenwald, P.C..

 Harold Israel, Esq.  at Levenfeld Pearlstein, LLC is reporting that the Sub V Bankruptcy Debt limits, which had been temporarily increased to $7,500,000.00, are posed to be made permanent.The article can be found at https://lnkd.in/dYQ BsF EyA detailed article about Subchapter V bankruptcy can be found at our blog at:https://lnkd.in/ewxRU2T