Home / Archive by Category "Chapter 11"

Archives

Classes Of Claims In Ch. 11 Must Be Unique – Not Just Only For Plan Approval

An element of Ch. 11 is that through the Plan the sorting of creditor claims into a particular class, with other substantially similar claims is allowed.  A legitimate business purpose must be shown to warrant creation of a separate class of claims though.  If the Plan changes a claim holder’s legal or contract rights this is an impaired claim.  It’s permitted, to propose making up overdue payments to a secured creditor, without this becoming an impaired claim.  Each impaired claim class gets to vote on confirming the Plan.  Further, only one impaired class needs to vote in favor of the Plan, providing it “doesn’t discriminate unfairly, and that it’s fair and equitable”. In the bankruptcy of Christian Love Fellowship Ministries creditor ECCU objected to the…

IRS Penalties Still Apply When Business Is In Chapter 11

A Bankruptcy Appellate Panel of the 6th Circuit affirmed a Bankruptcy Court Order made regarding Southeast Waffles LLC.  This Debtor had sought to avoid and recover penalty payments made to the IRS. After the Ch. 11 Plan was confirmed, an appointed Liquidating Agent sold assets accordingly, as Debtor S.E. Waffles operated business as a debtor-in-possession.  Debtor S.E. Waffles had failed to file taxes and make proper payments to the IRS.  Eventually several payments were made, but the IRS applied these funds to penalties only, rather than toward tax amounts due.  The Debtor alleged fraudulent conveyances from that practice. The Debtor’s argument under a constructive fraud theory (from its perspective) that payments made to the IRS “were for less than reasonably equivalent value” was rejected by…

Business debtor can’t hire lawyer once Ch. 11 Trustee appointed

Moohaven Dairy LLC filed bankruptcy in the Eastern District of MI, Northern Division, requesting legal representation from Attorney Dale Cubitt. The primary secured creditor Bank of America was granted relief from automatic stay, which permitted them to get an Order against non-debtors in the County Circuit Court. Under 11 U.S.C. Sec. 327 the Bankruptcy Court found Attorney Cubitt ineligible to represent Debtor Moohaven. Following that the Court determined “this bankruptcy estate required the appointment of a Chapter 11 Trustee”, effectively removing Debtor’s ability to hire any counsel during the bankruptcy. Upon the Court’s denial of his appointment Attorney Cubitt was immediately stopped from representing Debtor, even to volunteer services.  Attorney Cubitt was otherwise not restricted from representing any other individuals in the local Circuit Court,…

I was raised to be an honest person and pay my debts. Won’t I be cheating my creditors if I file for Bankruptcy in Michigan?

Bankruptcy is not about cheating your creditors. Bankruptcy laws were enacted to help people facing financial difficulty. The public policy behind the Bankruptcy law is to allow you to get a “fresh start.” If you have any questions about Bankruptcy in Michigan, call Attorney Mike Shovan with the Bay Area Bankruptcy Clinic at (877) 233-9389. Michael J Shovan PLC is a debt relief agency and we help people file for bankruptcy under the laws of the United States Constitution, Article 1, Section 8. This post is for informational purposes only and is not intended to constitute legal advice. Any relationship with this firm will be established by a written agreement signed by both you and me. If you have read this far, you need to…

How do I know if filing Bankruptcy in Michigan is the right thing for me to do?

You want to carefully consider your options before you make a decision to file a Bankruptcy in Michigan. You will want to review the free reports that we provide and check out posts on our blog and watch some of the instructional videos. If you have any questions about Bankruptcy in Michigan, call Attorney Mike Shovan with the Bay Area Bankruptcy Clinic at (877) 233-9389. Michael J Shovan PLC is a debt relief agency and we help people file for bankruptcy under the laws of the United States Constitution, Article 1, Section 8. This post is for informational purposes only and is not intended to constitute legal advice. Any relationship with this firm will be established by a written agreement signed by both you and…

How do I pick a good lawyer for my Bankruptcy in Michigan?

The most important thing in dealing with any lawyer is there response time. Do they return your calls promptly – within 24 hours or by the end of the next business day. Or – do you have to call and beg for a response. At the Bay Area Bankruptcy Clinic, I promise to return your call or respond to your email or fax within one business day of your request. For example, if you call me on Monday, I will respond to you no later than the close of business on Tuesday. I have had to hire attorneys myself. I have written big checks to lawyers only to be “blown” off. It is frustrating and, quite frankly, it is not tolerable. I promise to stay…

1 2