![]() ![]() 4, 2018), Bankruptcy Judge Martin Glenn held that parents’ tuition payments for their minor children did not constitute fraudulent transfers. Oberlin College (In re Sterman), 18-01015 (Bankr. In a recent decision from the Bankruptcy Court for the Southern District of New York, Geltzer v. However, there is still much to be resolved in this developing body of case law. ![]() New York and Connecticut have taken similar approaches in deciding the issue. In the last few months, we have reported on several decisions relating to whether a parent’s school tuition payments for an adult child constitute constructively fraudulent transfers. Read the full opinion here.īy Michael L. Moskowitz and and Melissa A. Chief Judge Morris determined that, based on the Brunner test, a debtor with a gross annual income of $37,500 could discharge over $220,000 of student loan debt. In a recent decision from the Southern District of New York Bankruptcy Court, Chief Judge Cecilia Morris analyzed the treatment of student loan debt in bankruptcy under the “undue hardship” exception of section 523(a)(8) of the Bankruptcy Code. To this end, we have analyzed how federal courts have interpreted section 523(a)(8) of the Bankruptcy Code, which prohibits bankruptcy courts from discharging most student loan debt “unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents.” 11 U.S.C. ![]() We have previously reported on the judicial treatment of student loan dischargeability in bankruptcy. As a result, the client was obliged to liquidate its few hard assets (the client’s business value was primarily tied to business relationships) and collect accounts receivable with a new goal of filing a liquidating plan under chapter 11.īy: Michael L. Unfortunately, as Client’s business continued to lose customers and profitability fell, the Client was forced to renegotiate the sale price to an exponentially lower number and, ultimately, the Purchaser withdrew its offer entirely. When the bankruptcy was filed, it was anticipated the business would be sold to a previously-located purchaser (“Purchaser”) with whom Client had been negotiating for several months. While production and other operating costs had steadily increased, sales had significantly decreased leaving the business unprofitable. Due to a downturn in the industry, Client was forced to close its doors after more than 150 years of operating its family-owned business. Weltman & Moskowitz, LLP was retained by one of the few remaining dairies located in New York State to file a chapter 11 bankruptcy petition (“Debtor” or “Client”). ![]() In simple terms, the Jay Alix Protocol provides that debtors should retain restructuring professionals pursuant to section 363 2 of the Bankruptcy Code, while applying the relevant disclosure and conflict provisions of section 327(a).īy Michael L. Moskowitz and Adrienne Woods 1 As a result of this inconsistency, and settlements between restructuring firm Jay Alix and Associates and the Office of the United States Trustee regarding the firm’s retention, the Jay Alix Protocol was established and has been widely followed since. As such, the Bankruptcy Code did not specifically address their retention which, on the surface, appears to fly in the face of section 327’s disinterested standard. When the Bankruptcy Code initially was developed, the role of chief restructuring officer did not exist. Alix Protocol was originally developed to reconcile the dual nature of chief restructuring officers as both officers of the debtor – and thus insiders – and professionals providing bankruptcy restructuring services to the debtor’s estate. In re McDermott Int’l Inc., 20-30336 (Bankr. A Houston Bankruptcy Judge’s recent decision brings into question the need for – and efficacy of – the longstanding Jay Alix Protocol. ![]()
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