Bankruptcy Pt. 2 Flashcards
T/F: creditors often want to prevent debtors from receiving a Chapter 7 discharge
True; the code provides two kinds of ammo for such claims: objections to discharge and nondischargeable debts
the following will prevent a debtor from receiving any discharge:
debtor is not an individual (only individuals can receive discharge under Chapter 7; entities seeking relief under Chapter 7 are usually dissolved at the conclusion of the case, so their debts are wiped out)
fraudulent transfers or concealment of property (applies to the year before or after the petition was filed)
unjustifiably failed to keep books and records
prior discharge within 8 years
What are the 6 nondischargeable debts?
willful and malicious injury, alimony, fraud, taxes, educational loans, and debts undisclosed in the bankruptcy petition (WAFTED)
T/F: a debtor may not want a particular debt discharged in bankruptcy
True; this is to keep good relations with that creditor
What are the 3 categories of claimants and what order are they paid in?
secured claimants, priority claimants (first-priority, second-priority, etc.), and general creditors who filed their claims on time
if there is not sufficient money to pay all creditors at a particular level, the creditors share pro rata
What is the list of priority claimants (and they are paid in this order)?
support obligations to spouses and children
expenses of the bankruptcy administration
claims that accrue in the ordinary course of business
wage claims of employees for sums earned within 180 days of bankruptcy, up to $15,150
sums owed for employee benefits up to whatever of the $15,150 above is left
claims of grain farmers and fishermen up to $7,475
consumer deposits up to $3,350
tax claims
personal injury claims arising from intoxicated driving
Features of reorganization cases under Chapter 11
a committee of unsecured creditors is appointed, usually consisting of willing persons holding the seven largest unsecured claims against the debtor
remember that Chapter 11 generally does not involve a trustee unless appointed by the courts
a Chapter 11 plan must classify all claims, describe the treatment to be afforded each impaired class, treat each claimant within a particular class identically, and establish ways to implement the plan
What is a cram down?
this occurs when a plan is confirmed by the court even when it is not accepted by all impaired classes; only one impaired class has to accept it and the court finds that the plan is not unfairly discriminatory and is fair and equitable with respect to any dissenting impaired classes
Features of a Chapter 15 (ancillary and other cross-border cases) case
the foreign representative is authorized to operate the debtor’s business; once recognized, a foreign representative may seek additional relief from the bankruptcy court and is authorized to bring a full-blown (as opposed to ancillary) bankruptcy case under Chapters 7 or 11; the foreign representative may participate in a pending U.S. insolvency case and may intervene in any other U.S. case in which the debtor is a party
Chapter 15 prohibits discrimination against foreign creditors except certain foreign government and tax claims which may be governed as a treaty
under Chapter 15, U.S. courts and trustees must cooperate to the maximum extent possible with foreign courts and foreign representatives
