M2 - Bankruptcy Part 2

What is the acronym to describe the debts that survive bankruptcy?

WAFTED

What are the two types of ammunition creditors have to prevent debtors from a chapter 7?

• Objections to Discharge

• Non-dischargeable debts

What events will prevent the debtor from receiving any discharge?

• Debtor is not an individual

• Fraudulent transfers or concealment of property

• Unjustifiably failed to keep books and records

• Prior discharge within 8 years

What are the debts not discharged for an individual (WAFTED)? Under chapters 11 and 7 bankruptcy

Wilfull and malicious injury

Alimony

Fraud/fines owed to govt

Taxes

Educational loans

Debts undisclosed in the bankruptcy petition

When may a debtor reaffirm debts it does not want discharged in bankruptcy?

BEFORE the granting of the discharge

Does chapter 7 require a trustee?

Yes

What are the three categories of claimants in chapter 7 and what order must they be paid in?

1. Secured Claimants

2. Priority Claimants

3. General creditors who filed their claims on time

What is the acronym to describe the ranking order of the priority claimants?

SAG WEG CTI

SAG

Support Obligations

Administrative Expenses of bankruptcy

Gap claims accrued in ordinary course of business after an involuntary bankruptcy

WEG

Wage claims of employees for sums earned within 180 days of bankruptcy (up to 15,150)

Employee benefits owed (up to whatever is left of the 15,150

Grain farmers/fishermen up to 7,475

CTI

Consumer deposits

Tax Claims

Injury Claims (personal) arising from DUIs

Creditor’s committee in Chapter 11

Committee of unsecured creditors, consisting of willing persons holding the seven largest unsecured claims against the debtor

Equity Security Holder’s Committee

The seven largest holders of the equity securities

When can the debtor file a reorganization plan under chapter 11?

Within the first 120 days after the order for relief, when there is no

When may other interested parties (creditors) file a reorganization plan in chapter 11?

• A trustee has been appointed

• Debtor has not filed a plan within 120 days

• Debtor has filed a plan but not obtained the acceptance of every impaired class

When is a class of impaired claims deemed accepted?

• accepted by creditors holding at least 2/3 in amount and more than ½ in number of the allowed claims

When will the court confirm the plan?

• Accepted by all impaired classes

• Providing for payment in full for priority administrative expenses

• Plan is feasible

Cram down

• plan can be confirmed even if it is not accepted by all impaired classes

• plan fair and equitable with respect to any dissenting impaired classes

Who commences a chapter 15 ancillary case?

a foreign representative

What are the two categories of foreign proceedings in a chapter 15 case?

1. Foreign main proceeding

2. Foreign non-main proceeding

What happens upon the recognition of a foreign main proceeding?

Automatic stay and other provisions of the bankruptcy code take effect in the United States

The powers of a foreign representative in a Chapter 15 Bankruptcy

• Authorized to operate the debtor’s business

• Seek additional relief from the bankruptcy court

• Bring a full-blown (as opposed to ancillary) case under chapters 11 and 7

• Participate in a pending US insolvency case

Who does chapter 15 prohibit discrimination against?

Foreign creditors

Under Chapter 15, who must be notified about a US Bankruptcy

Foreign creditors