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Asset protection is an important issue for individuals that are defendants in litigation or in financial distress. Parties that are contemplating bankruptcy ponder how to protect their assets from their creditors. Asset protection and pre-bankruptcy planning occurs when a party contemplating filing for bankruptcy converts non-exempt assets into exempt assets. An exempt asset is an asset that is protected by either a state or federal exemption statute that excludes particular assets from being subject to execution by a bankruptcy trustee or creditor. An exempt asset is not available for distribution to a debtor’s creditors, and the particular asset is retained by the debtor. This article examines asset protection and pre-bankruptcy planning and its impact on a debtor’s discharge through Bankruptcy Code §727(a)(2)(A). Courts, pursuant to Bankruptcy Code §727(a)(2)(A), have denied debtors discharges when there were factual findings that a debtor’s pre-bankruptcy planning constituted a transfer of a debtor’s assets within one year of the filing of the debtor’s Chapter 7 case with the intent to hinder, delay, or defraud his or her creditors. E.g., Norwest Bank Nebraska, N.A. v. Tveten, 848 F.2d 871 (8th Cir. 1988).
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By Hugh McDonald and Deborah Kovsky-Apap
The COVID-19 pandemic is already leaving its mark on the bankruptcy asset sale landscape. Despite the uncertainty — or even because of it — bankruptcy should still be viewed as a useful tool to effectuate the acquisition of assets. The current situation and anticipated distress across many industries presents opportunities for purchasers to acquire assets on favorable terms.
By Joseph H. Lemkin
With Uncertainty As to When the Pandemic Will Ease, Bankruptcy Courts Do Not Seem to Be a Panacea Leading to Successful Reorganizations or Orderly Liquidations for Troubled Companies
The impact of COVID-19 on efforts of businesses to reorganize or even orderly liquidate in bankruptcy has been swift and devastating
By Samantha Stokes
Law firms have always counted on bankruptcy as a countercyclical practice in hard times. Now, those that prepared when the economy was booming may be about to get their reward.
By Rudolph J. Di Massa Jr. and Drew S. McGehrin
The ruling in In re Jarvis that the grant of a security interest to a corporate lender will not necessarily “spread” that security interest to the lender’s affiliates underscores the need for precision and care in the drafting of loan documents, particularly with respect to the granting language contained in security agreements.