Bankruptcy

1
Lecture 10

• Bankruptcy
• (Chapter 37)

2
Bankruptcy

• Federal Law
• Kinds of Btcy Proceedings

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Kinds of Btcy Proceedings

• Chapter 7 - Liquidation
• Chapter 11 - Reorganization
• Chapter 13 Payment Plans/Consumer Debt
  Adjustment Plans

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How Btcy is Declared

• Declaration of Voluntary Btcy
• Declaration of Involuntary Btcy
• Automatic Stay
• If the Creditors are Wrong Rights of Debtor in
  Involuntary Btcy

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Declaration of Involuntary Btcy

• Eligibility
• Number and Claims of Petitioning Creditors
• Grounds for Relief for Involuntary Case

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Administration of Btcy Estate

• Order of Relief
• List of Creditors
• Trustee in Btcy
• The Bankrupts Estate
• Voidable Transfers
• Proof of Claim
• Priority of Claims

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Voidable Transfers

• Insolvent Debtors
• Preferential Transfers

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Debtors Duties and Exemptions
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Discharge in Btcy

• Denial of Discharge
• Individuals discharge
• Partnerships and Corporations - dissolve

10
Ch 7 Case Problem 1

• In re Green Oaks
• Facts
• 10 creditors
• 2 unsecured (Apple -15K Baker - 4K)
• Advise
• Can Green Oaks file a voluntary Ch 7 petition?
• Who can file an involuntary Ch 7 petition?
• If involuntary petition, would court order relief?

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Ch 7 Case Problem 2

• In re Shane
• Facts
• Land, Car (1K), Furniture (2K), Cash (500)
• 1K earnings, 10K inheritance on June 1
• Advise
• What are powers/functions of btcy trustee (T)?
• Who selects T?
• To what property does T aquire rights?
• What property belongs to Shane?

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Ch 7 Case Problem 3

• In re Tarco Inc.
• Assets Building, 10K cash
• Creditors
• First Bank - 50K secured by building
• Bud - 500 deposit consumer goods not recv
• Trustee - 6K fees
• Tina - 1K wages prior to btcy
• Fuller - 5K unsecured goods sold
• Rights of creditors?

13
Reorganization Plans - Ch 11

• No trustee debtor in possession and
  creditors committee
• Contents of the Plan
• Confirmation of the Plan

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Ch 11 Case Problem

• In re Ark Co.
• Facts
• 10 unsecured creditors
• Long-term, executory real estate lease
• Advise
• Can Plan reject lease?
• Can Plan with equal payments pay off some debt
  and partially pay other debts?
• Is confirmed Plan binding on Creditors?

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Payment Plans Ch 13

• Contents of the Plan
• Confirmation of the Plan
• Discharge of the Debtor

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Meet Jason.
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Ch 13 Case Problem

• In re Jason
• Plan
• 90 Trustees fees
• 80 unsecured creditors (inc. city water Co.)
• Advise
• Can city refuse to register Js car if water bill
  not paid in full?
• Does J remain liable for debts not paid in full?

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The End

• Thank you for being a wonderful class!
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