Bankruptcy & Restructuring

Represented a lender taking possession of equipment and inventory as security for a defaulted loan.  Immediately before the lender could take possession of the security, the borrower filed a Chapter 11 bankruptcy that appeared to have been filed only for purposes of delay and not for purposes of a legitimate reorganization.  By promptly filing a motion with the court and obtaining an order for the motion to be heard on shortened time, we were able to obtain an order dismissing the bankruptcy only 19 days after borrower filed the bankruptcy petition.

Debtor filed Chapter 13 bankruptcy in 2012.  Debtor was significantly behind on his first mortgage and he had a second mortgage on the property in the amount of greater than $200,000.  The property value at the time of filing was below the total amount of the first mortgage.  We filed a ‘lien strip’ motion which allowed the second mortgage to be discharged as an unsecured debt after the five year plan payments were made.  In late 2017 we began the process of filing to value the second lien at $0 and discharge the debt.  We obtained the order removing the second lien and the debtor remained current on his first mortgage.  The property value recovered fully, but the debtor was able to remove over $200,000 in his second mortgage through the chapter 13 bankruptcy.

Successfully removed a judgment lien clouding title on a debtor’s property where the debtor was over 65 and only source of income was social security.  Judgment was obtained against debtor in 2005 arising out of a past due credit card bill.  Over the years the judgment was renewed and creditors would not agree to a settlement or payment plan.  Debtor filed chapter 7 bankruptcy and we filed the motion to avoid the judgment against the property by successfully arguing the judgment lien impaired debtor’s homestead exemption rights to the equity in the property.  The motion was granted and the debt was discharged as unsecured debt.  The debtor was able to sell his property free and clear of the lien.

Under bankruptcy law, payments received by creditors within 90 days prior to the bankruptcy filing are presumed to be a “preference” and are subject to claw back by the bankruptcy trustee.  For example, in one matter, the bankruptcy trustee sought to recover approximately $80,000 in payments received by the client within 90 days before the bankruptcy filing.  We were able to demonstrate that the some of the payments were not preferential payments and that other payments were otherwise exempt from the claw back.  The matter was resolved without a trial.