Boyd student Janine Lee recently authored an article, titled “The Individual Chapter 11 ‘Double Whammy’ Conundrum,” for the January issue of the American Bankruptcy Institute Journal.
The article, which examines the Ice House America LLC v. Cardin case regarding pre-petition property of individual debtors in Chapter 11 cases, reads, “The ‘double whammy’ discussed by the Sixth Circuit presents quite a conundrum for the individual chapter 11 debtor. A strict application of the absolute priority rule to individual chapter 11 debtors (the ‘narrow view’) could result in a debtor’s surrender of both pre-petition property and future earnings to creditors in order to confirm a non-consensual plan. Under those circumstances, confirmation of such a plan seems almost – if not entirely – impossible. Alternatively, the conclusion that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 abrogated the absolute priority rule as to individual debtors may result in providing such debtors with a realistic opportunity to reorganize and successfully exit bankruptcy, just as a chapter 13 debtor can do.”
Lee is a 2016 Boyd School of Law J.D. candidate and a senior paralegal at The Schwartz Law Firm Inc. in Las Vegas.