Glass & Goldberg | Financing, Property & Bankruptcy Law

Under AB 3194, a recent bill signed into law by Governor Brown, builders should be able to more easily develop housing projects for low- and moderate-income households without interference from local governments. Another primary goal of the law is to make these types of housing projects more affordable for developers. Also, the bill’s legislative intent is for local governments to encourage urban infill rather than sprawling development into surrounding agricultural areas that may lack the infrastructure necessary for project completion.

Read more on AB 3194 Enacted To Facilitate Growth Of Low- And Moderate- Income Housing In California…

The California Residential Mortgage Lending Act (CRMLA) and the California Financing Law (CFLL), respectively in code sections Cal. Fin. Code §50501.5 and Cal. Fin. Code §22707.5, as well as the California Franchise Investment Law (CFIL) in Cal. Corporations Code §31406, empower the state’s Commissioner of Business Oversight to issue citations to offenders who violate the CFLL, CRMLA, and CFIL, or any rule or order issued pursuant to these California laws.

Read more on Commissioner Of Business Oversight May Issue Citations To Violators Of the CRMLA, CFLL, and CFIL…

Some interesting and trendsetting news from Japan’s bankruptcy courts surfaced at the end of the summer of 2018. Nobuaki Kobayashi, the trustee of a hacked Japanese cryptocurrency exchange’s bankruptcy estate, opened an online claims submission process for interested parties to recoup their losses. What made this a potentially trailblazing event, was that Kobayashi, as trustee, had the ability to make distributions in bitcoin and BCH (bitcoin cash), in lieu of paying the claims’ value in fiat currency. More than some would say this is a significant procedural achievement for creditors and is likely a harbinger of the future.

Read more on Japanese Bankruptcy Debtor Allowed To Make Distributions In Cryptocurrency (Bitcoin)…

The U.S. Bankruptcy Code (Title 11), under § 363, allows a Chapter 11 bankruptcy debtor, acting in the capacity of a debtor-in-possession, to sell assets at auction, thus giving the debtor more control in their ultimate disposition than in a Chapter 7 liquidation case where a trustee may sell or transfer assets without the participation of a debtor-in-possession.

Read more on Some Information About § 363 Sales In Bankruptcy Cases…

“Sears, America’s Store,” also known as Sears Holdings, after a 125-year run as one of America’s leading retailers, filed for bankruptcy protection October 15th after an extended number of years of barely remaining solvent. The company survived this long as a result of having billions of dollars of its CEO’s own money with which to maneuver financially. Eddie Lampert, the CEO of Sears for the past five years, will step down from his position as CEO, effective immediately, but will continue as Sears’ chairman of the board.

Read more on Sears Files For Chapter 11 Bankruptcy In October…

In the case, In re Fagerdala USA-Lompoc, Inc., 891 F.3d 848 (9th Cir. 2018), the Ninth Circuit affirmed a creditor’s ability to block a debtor’s “cramdown” by purchasing junior debt to protect its own claim. The court reversed the bankruptcy court’s decision to designate claims for bad faith pursuant to 11 U.S.C. § 1126(e). In doing so, the court thereby sanctioned the creditor’s motive of purchasing claims to block the Chapter 11 plan for the purpose of protecting a pre-existing claim. Thus, Fagerdala illustrates that, in bankruptcy proceedings, at least in the Ninth Circuit, creditors may purchase claims to protect their economic interests.

Read more on Ninth Circuit Affirms Creditors’ Ability to Block Cramdown by Purchasing Claims…

The Seventh Circuit Court of Appeals’ recent decision in Illinois Department of Revenue v. Hanmi Bank challenges the prevailing view that as a matter of law an underwater senior creditor always could retain the entire proceeds of a free-and-clear sale with junior creditors receiving nothing. The Seventh Circuit’s decision may allow junior creditors in future bankruptcy cases a recovery based on the theory that a free and clear sale under § 363 of the Bankruptcy Code (Title 11) creates a premium for those assets that a junior creditor may potentially be entitled to share.

Read more on Seventh Circuit Decision May Open Door To Junior Creditors’ Sharing In § 363 Sales…

As reported here recently, SB 1235 has been signed into law by Governor Brown. The legislature believes this new law will protect small business owners and empower more small businesses to succeed. Many of the bill’s supporters, including small business owners, believe the passing of this bill was critical not only to the economic health of California but to the entire nation as California becomes the first state to enact truth-in-lending laws that protect small business owners.

Read more on What Small Business Owners Hope SB 1235 Accomplishes…

Under legislation signed September 30, 2018, by Governor Brown, California will become the first jurisdiction in the United States to provide small business owners with the same protections that Truth-in-Lending laws have provided consumers for more than fifty years.

Read more on SB 1235 Passes: Governor Signs Nation’s First Truth-In-Lending Bill For Small Business Owners…