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The Governmental Unit Exemption to the Automatic Bankruptcy Stay Extends to a Final Judgment for Attorneys’ Fees as a Sanction

February 4, 2013 Banking & Financial Services Industry Legal Blog, Governmental Entities Industry Legal Blog

In every bankruptcy action that is filed, a stay of any collection-type activities automatically comes into place for the duration of the pending action.  However, there are certain proceedings that are exempted from this automatic stay and allowed to proceed against the debtor during a pending bankruptcy action.  One such […]

Do you Have a Customer Entering Bankruptcy? Be Sure not to Violate the Automatic Stay

January 18, 2013 Banking & Financial Services Industry Legal Blog

Section 362 of Title 11 of the United States Code provides for the Automatic Stay in all bankruptcy proceedings, including Chapter 7, 11 and 13 filings. The Automatic Stay is invoked immediately upon a debtor filing for bankruptcy and once invoked it instantly halts all actions by creditors to collect on pre-bankruptcy debts.

A Creditor’s Perspective on Avoiding the Bankruptcy Code’s Automatic Stay

December 12, 2012 Banking & Financial Services Industry Legal Blog

By Hans Wahl, Esquire

The first consideration for creditors during bankruptcy proceedings is the Automatic Stay provision of the Bankruptcy Code. Section 362 of the United States Bankruptcy Code provides the provisions governing the Automatic Stay. The Automatic Stay works as an immediate “injunction” that halts all actions by creditors and potential creditors to collect on pre-bankruptcy debts from a debtor who has declared bankruptcy.

The Automatic Stay applies in all bankruptcy proceedings, including Chapters 7, 11 and 13, and this provision is invoked automatically and immediately upon the debtor filing for bankruptcy. The Automatic Stay is a benefit to debtors because once invoked it works to immediately stop all actions and proceedings to recover claims against the debtor. Conversely, it is a detriment to creditors as they can no longer continue with either collection efforts or legal action for their claims against the debtor.

However, there are exceptions to the Automatic Stay which provide relief to creditors. For creditors seeking to avoid the Automatic Stay, there are three subsections of Section 362, which can be invaluable if taken advantage of properly. These include §§§ 362(b), (d) & (f), which can be considered the creditor’s best allies within the Bankruptcy Code.

Termination of an LLC Member Upon Bankruptcy Filing

December 4, 2012 Banking & Financial Services Industry Legal Blog, Professional Services Industry Legal Blog

What happens to the rights of a member of a limited liability company when that member files bankruptcy?  In Florida, that member is automatically terminated from membership in the LLC and any remaining interests in the LLC become property of the bankruptcy Trustee.  But is it really that simple? Limited […]

Negating Defenses of Procedural Unconscionability in Loan Documents

August 14, 2012 Banking & Financial Services Industry Legal Blog, Professional Services Industry Legal Blog

Defaulted borrowers often attempt to argue that the waiver of defenses language included in loan documents is unconscionable and therefore unenforceable. However, for a contract to be held to be unenforceable under Florida law, the contract must be both procedurally and substantively unconscionable. See Golden v. Mobile Oil Corp., 882 F.2d 490, 493 (11th Cir. 1989); Gainesville Health Care Center v. Weston, 857 So. 2d 278, 284 (Fla. 1 st DCA 2003). If a contract is found to be either procedurally or substantively conscionable, then the contract is enforceable. See Eldridge v. Integrated Health Services, Inc., 805 So. 2d 982 (Fla. 2d DCA 2001)(emphasis added).

Why and What are Banks Prohibited From Disclosing Suspicious Activity Reports (SAR) of Fraud by Federal Law?

August 14, 2012 Banking & Financial Services Industry Legal Blog

By: Charles B. Jimerson, Esq.

In 1992, Congress passed the Annunzio-Wylie Anti-Money Laundering Act (the “Act”) which requires banks to report suspicious activities to the appropriate federal authorities. Cotton v. Privatebank and Trust Co., 235 P. Supp. 2d 809, 812 (N.D. Ill. 2002). The laudable goal of the requirements contained in the Act was to encourage banks to make such reports related to criminal activities. Id. In fact, the stated purpose of the Act is to:

require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism. 31 U.S.C § 5311.

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