Do the ends justify the means test? House-passed bill designed to reduce Ch. 7 filings by consumers is not the best means of increasing their payments to creditors

Article Abstract:

HR 3150, the bankruptcy reform bill passed by the House of Representatives, bars access to Chapter 7 to many debtors with the future income to pay creditors, and to obtain discharges, these debtors would have to file repayment plans under Chapter 13. Supporters of this bill argue that the former system allows individual debtors to avoid taking enough personal responsibility for their financial problems, and the bill is backed by the consumer credit and lending industries. The bill adopts "means testing" for Chapter 7, which has never been part of the Bankruptcy Code. The bill will not prevent abusive bankruptcy filings.

Bankruptcy law

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Delaware looks at creditors, liability

Article Abstract:

Important judicial and legislative developments in Delaware's corporate law were made during 1992. The issue in Geyer v Ingersoll Publications Co concerned fiduciary duties of directors to creditors after corporate bankruptcy. The court denied Ingersoll's motion to dismiss, holding that he was being charged with liability as the alter ego of the corporation. The Delaware Limited Liability Company Act was signed into law on July 22, 1992 and creates a new business entity by combining the limited liability of the corporation with the partnership's preferential tax treatment.

Corporate directors, Corporation law, Corporate reorganizations

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Single-asset filings can snare secured creditors: creditors who fail to act early in a single-asset bankruptcy may be left with devalued property

Article Abstract:

The 1994 Bankruptcy Reform Act did not protect creditors from filings by debtors with a single secured asset, but it does leave options for creditors that move early and aggressively to stave off a stay. One way is to prove the unsecured deficiency claim controls the unsecured creditors' class, and another is simply to purchase the other creditors' claims at a discount, thus forestalling confirmation of a plan. Another way is to show that the property cannot ever generate enough income to pay the loan.

Valuation, Real property, Real estate appraisal, Bankruptcy estates

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