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Court Holds That Deposits Would Be Hypothetical
A bankruptcy trustee may recover for the bankruptcy estate so-called “preferential transfers” – certain payments made by the debtor within 90 days before the commencement of a bankruptcy case. To prevail, the trustee must show (among other things) that the creditor received a greater amount as a result of the transfer in question than such creditor would have received in a hypothetical liquidation under Chapter 7, had the challenged transfer not occurred.
This test, set out in Section 547(b)(5) of the Bankruptcy Code, is referred to as the “greater amount” test. In Schoenmann v. Bank of the West (In re Tenderloin Health), 849 F.3d 1231 (9th Cir. 2017), the U.S. Court of Appeals for the Ninth Circuit considered whether a bankruptcy court may account for hypothetical preference actions within a hypothetical Chapter 7 liquidation when determining whether a debt payment made by a debtor to its secured lender meets the “greater amount” test, such that it could be avoided by the trustee. Answering in the affirmative, the court held that bankruptcy courts may permissibly engage in such “hypotheticals within hypotheticals” so long as the inquiry is factually warranted and is supported by appropriate evidence, and provided further that the hypothetical action would not contravene any other provision of the Bankruptcy Code.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
Risks of “Baseball Arbitration” in Resolving Real Estate Disputes
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.
Disconnect Between In-House and Outside Counsel
'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.