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Articles by Steven A. Roach
Michigan Bankruptcy Exemptions Set to Rise Nearly 11% Effective April 1, 2026 | JD Supra
A bankruptcy debtor in Michigan may choose whether to use the exemptions provided under either federal or state law to “exempt” out a certain amount of property from the bankruptcy estate and use it for a fresh start. Every three years on April 1, the dollar amounts in the federal Bankruptcy Code are adjusted to account for inflation. The federal dollar amounts last were increased on April 1, 2025, and are not slated for another increase until April 2028.
'Void' Judgments Are Not Void After All | JD Supra
Supreme Court decisions regarding bankruptcy cases usually affect only bankruptcy litigation, but the recent decision in Coney Island Auto Parts Unlimited, Inc. vs. Burton[1] alters the landscape for all federal litigation. Previously, the Supreme Court declared that “A void judgment is a legal nullity.”[2] A leading Federal civil procedure treatise states that “there is no time limit on an attack on a judgment as void.”[3] Neither remains true any longer.
Bankruptcy Dollar Amounts Set to Rise Significantly on April 1, 2025 | JD Supra
Every three years on April 1, the dollar amounts in the Bankruptcy Code are adjusted to account for inflation. The April 1, 2025, increase will be approximately 13.2%, even larger than the nearly 11% increase three years ago. Bankruptcy Code section 104 requires the Judicial Conference of the United States to publish the changes at least a month before they take effect.
In Purdue Pharma, Supreme Court Rules That Nonconsensual Releases Are A Nonstarter | JD Supra
On June 27, 2024, the United States Supreme Court issued its long-awaited opinion in Harrington v. Purdue Pharma L.P., holding that the Bankruptcy Code does not permit nonconsensual releases of nondebtors. As a refresher, Purdue marketed OxyContin as a less addictive opioid because of its novel time release formula. Purdue realized billions of dollars in profits from this drug. As the effects of OxyContin became apparent, however, thousands of lawsuits were filed.
Debt Limits to Qualify for Subchapter V and Chapter 13 Revert to Prior Lower Levels | JD Supra
In March, Miller Canfield noted that the previously expanded debt limits for bankruptcy cases under the Small Business Reorganization Act ("SBRA," a.k.a. "Subchapter V") and under chapter 13 were set to revert on June 21, 2024. In April, Senator Dick Durbin (Ill.) introduced a short bill, the 2024 Bankruptcy Threshold Adjustment Extension Act ("Extension Act," S.4150), which proposed to extend the debt limits for another two years.
Debt Limit to Qualify for Subchapter V and Chapter 13 Set to Revert This Summer | JD Supra
In 2022, Congress passed the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”), raising the debt limits for bankruptcy cases under the Small Business Reorganization Act (“SBRA,” a.k.a. “Subchapter V”) and under chapter 13. This made more debtors eligible for relief under these provisions of the Bankruptcy Code. Congress made the increases temporary, however. They will revert to lower values in a few months unless Congress extends them or makes them permanent.
Fifth Circuit Continues Bankruptcy Sale Protections After Supreme Court MOAC Opinion | JD Supra
On April 26, 2023, Miller Canfield alerted readers to the Supreme Court opinion in MOAC Mall Holdings, LLC v. Transform Holdco, LLC. The MOAC decision may affect property sales in bankruptcy cases because it could weaken the protection provided by Bankruptcy Code section 363(m). Fortunately, a recent Fifth Circuit decision [1] may help put some of those concerns to rest. Section 363(m) of the Bankruptcy Code protects people who buy or lease property from a bankruptcy estate.
Protecting Your Investment from Costly Building Code Violations Following Galvan Ruling | JD Supra
In a breach of warranty deed claim, the Michigan Supreme Court ruled in favor of the sellers of a condominium unit and unanimously decided on July 12, 2023, in Galvan v Poon that a building code...
Supreme Court Rules That Property Tax Foreclosures Can Violate the “Takings Clause” of the U.S. Constitution | JD Supra
On May 25, 2023, the United States Supreme Court issued its decision in Tyler v. Hennepin County, Minnesota,[1] holding that a state tax foreclosure violates the “Takings Clause” of the U.S. Constitution when it “provides no opportunity for the taxpayer to recover the excess value” beyond the amount of taxes owed. This is an important win for taxpayers nationwide.
Michigan Tax Foreclosures in Bankruptcy - An Auction and a Right to Claim Surplus Proceeds Insulates Against Challenge as a Fraudulent Transfer | JD Supra
In January, Miller Canfield reported on Lowry v. Southfield Neighborhood Revitalization Initiative (In re Lowry)[1], an opinion from the Sixth Circuit Court of Appeals. Lowry held that a taxpayer in bankruptcy could challenge a Michigan tax foreclosure sale under federal bankruptcy fraudulent transfer law. The property at issue in Lowry was allegedly worth far more than the unpaid taxes. The taxing authority acquired the property for the taxes owed and had effectively retained the surplus.
What Do You Do If a Debtor Defaults on Its Confirmed Bankruptcy Plan? | JD Supra
A recent opinion from the Michigan Court of Appeals explained that when a debtor defaults under a confirmed chapter 11 bankruptcy plan, a creditor can enforce its rights in state court, and perhaps also in the bankruptcy court. In City of Southfield v Shefa, LLC,[1] a debtor that owned a hotel filed for bankruptcy under chapter 11 of the Bankruptcy Code in 2015. The bankruptcy court confirmed the debtor’s plan in 2016. The plan imposed a number of obligations on the debtor.
Michigan Tax Foreclosures May Be Avoidable in Bankruptcy | JD Supra
A recent opinion from the Sixth Circuit Court of Appeals has opened a new door for a taxpayer to challenge a Michigan tax foreclosure sale. The opinion held that the challenge could proceed where the property value was alleged to be substantially more than the unpaid taxes and the taxing authority effectively retained the equity of the property. The circumstances in Lowry v. Southfield Neighborhood Revitalization Initiative (In re Lowry)[1] were fairly typical.
Michigan Court of Appeals Upholds Taxpayer Recovery of Excess Tax Foreclosure Proceeds, Bars Multi-County Class Actions | JD Supra
Key Takeaways The Michigan Court of Appeals rejected an effort to allow class action recovery of excess proceeds from the sale of tax foreclosed properties. The Court ruled that the Michigan Supreme Court's 2020 decision in Rafaeli v Oakland County applied retroactively and that the subsequent legislative fix from December 2020 applied prospectively only. Under the new law, an owner must file a notice with the county by the July 1 immediately following the effective date of the foreclosure.
SBA's Guidance on Requests to Honor SBA's Guaranty of PPP Loan | JD Supra
The SBA recently issued its Procedural Notice on when a lender may request the SBA to honor its guaranty of a PPP loan. The PPP loan program has been in place for over a year and has provided billions of dollars of assistance to small businesses all over the United States. It is not surprising that some PPP borrowers have encountered continued financial difficulty, in some instances resulting in bankruptcy, dissolution, shutting their doors, or discovery of fraud-related issues.
SBA's Guidance on Requests to Honor SBA's Guaranty of PPP Loan
The SBA recently issued its Procedural Notice on when a lender may request the SBA to honor its guaranty of a PPP loan. The PPP loan program has been in place for over a year and has provided billions of dollars of assistance to small businesses all over the United States. It is not surprising that some PPP borrowers have encountered continued financial difficulty, in some instances resulting in bankruptcy, dissolution, shutting their doors, or discovery of fraud-related issues.
Commitment Fees Might Constitute Interest Under Michigan Law | JD Supra
Lenders often include fees in loan transactions in addition to an interest rate. Typically such fees are not considered interest, as they compensate the lender for various services or commitments provided under the loan agreements. However, a court might disregard the commitment fee label when determining whether a loan has a usurious interest rate.
Michigan Court of Appeals Holds That Development Agreement Obligations are Extinguished in Tax Foreclosure | JD Supra
The Michigan Court of Appeals recently held that assessments on a property under a development agreement between a city and the property's former owner did not survive a tax foreclosure and therefore were not liens against the property in the hands of the party that purchased it at tax auction. On April 22, 2021, the Michigan Court of Appeals decided Petersen Financial, LLC v. City of Kentwood and Kent County Treasurer, docket no. 350208, 2021 WL 1582835 (unpublished).
Michigan Court of Appeals Holds That Development Agreement Obligations are Extinguished in Tax Foreclosure | Lexology
The Michigan Court of Appeals recently held that assessments on a property under a development agreement between a city and the property's former owner did not survive a tax foreclosure and therefore were not liens against the property in the hands of the party that purchased it at tax auction. On April 22, 2021, the Michigan Court of Appeals decided Petersen Financial, LLC v. City of Kentwood and Kent County Treasurer, docket no. 350208, 2021 WL 1582835 (unpublished).
The Impact of the Bankruptcy Relief Act and Other Recent Bankruptcy Code Changes | JD Supra
Bankruptcy law has seen many changes in 2020 and 2021. Some of these were enacted in response to COVID, but many other changes were included in the Bankruptcy Code before the pandemic. This article highlights some of these changes and their impact on the rights of lenders, trade creditors, suppliers, landlords, tenants, and debtors.
The Impact of the Bankruptcy Relief Act and Other Recent Bankruptcy Code Changes
April 02, 2021 West Virginia Legislative Brief for 4/2/21 by: L. Gil White The Trend Continues: Illinois Again Enacts New Significant Employment... by: Howard L. Mocerf and Michael D. Karpeles Factory Mutual’s “Contamination” Exclusion Is Ambiguous; May Not... by: Michael S. Levine The Impact of the Bankruptcy Relief Act and Other Recent Bankruptcy... by: Steven A. Roach and Ronald A. Spinner Arizona COVID-19 Update: Pandemic Liability Shield Legislation Awaits... by: Nonnie L. Shivers and Aaron S.
Congress Permits SBA to Make PPP Loans to Debtors in Bankruptcy, SBA Says "No" | JD Supra
In June and December of 2020, Miller Canfield reported that the Fifth and Eleventh Circuits had held that the Small Business Administration ("SBA") may exclude debtors in bankruptcy from consideration for Paycheck Protection Program ("PPP") loans, albeit for differing reasons. The recent Consolidated Appropriations Act, 2021 ("CAA"), signed into law on December 27, 2020, could have changed that.
Eleventh Circuit Joins Fifth in Holding that the SBA May Deny Paycheck Protection Program Loans to Debtors in Bankruptcy | JD Supra
In June of 2020, Miller Canfield reported that the Fifth Circuit held that a Texas bankruptcy court had exceeded its authority when it ordered the SBA Administrator to make a Paycheck Protection Program (PPP) loan available to a debtor in bankruptcy. We added at the time that "whether other circuits follow the Fifth's lead remains to be seen." Now, the Eleventh Circuit has agreed with the Fifth, issuing a comprehensive opinion to explain its reasoning.
Michigan’s Receivership Act: No Longer Just for Commercial Real Estate
October 30, 2020 Hydro Newsletter - Volume 7, Issue 11 by: Sharon White and Rachael L. Lipinski ICO Fines Marriott International £18.4 Million for Security Breach by: Hunton Andrews Kurth’s Privacy and Cybersecurity Undue Burden! Another Court Denies Motion to Compel Burdensome... by: Brent Owen Corporate America’s Diversity Goals Under Scrutiny by: John M. Bryson II SEC and CFTC Chairman Issue Joint Letter Regarding CFTC Orders... by: Michael T. Foley and Laura N.
Practice Pointer: Review Your Loan File Now to Avoid Problems Later | JD Supra
When a loan becomes distressed, it is essential for the secured lender to conduct a file review to determine if there are any deficiencies that need to be addressed. If deficiencies are not addressed, the lender’s collateral position might be jeopardized, and the lender may well encounter obstacles enforcing the loan.
Michigan’s Receivership Act: No Longer Just for Commercial Real Estate | JD Supra
The Uniform Commercial Real Estate Receivership Act (“UCRERA”), adopted by Michigan in 2018, originally applied only to receiverships over commercial real estate. An amendment effective October 15, 2020, shortens the name of the Act to the “Receivership Act” and makes the Act applicable generally to commercial and industrial (“C&I”) loans that have no real estate collateral. This article summarizes some of the changes and the interplay between receivership and bankruptcy.
Strategies to Reduce the Impact of the New SBA Procedural Notice on the Rights of a Secured Lender | JD Supra
In the SBA Procedural Notice dated October 2, 2020 (the “Approval Notice”), the Small Business Administration (“SBA”) has issued mandates that may impact the ability of a recipient of a Paycheck Protection Program (“PPP”) loan to raise capital, to transfer ownership, to sell assets, or to liquidate. While the Approval Notice is strikingly broad in scope, there are ways of reducing, if not eliminating, its effect on these types of transactions.
Practice Pointer: Words Matter | JD Supra
In prior practice pointers, we discussed how a statute of frauds provides protection for financial institutions and how a prenegotiation agreement also can provide protection. Do these mean that you can write or say whatever you want, without concern? The short answer is no. If litigation occurs in a workout, which happens every now and then, or if a borrower elects to file bankruptcy, the borrower can use that court proceeding to conduct discovery.
Practice Pointer: Should Lenders Use Pre-Negotiation Agreements? | JD Supra
Some states feature statutes of frauds that protect lenders, but not all such statutes of frauds protect all lenders, and some offer more protection than others. Just as critically, many people now communicate predominantly via email and other electronic media that might satisfy certain statutes of frauds. To reduce these risks, some lenders prefer to enter into pre-negotiation agreements with their borrowers and guarantors.
Practice Pointer: When Should You Send Default and Demand Letters? | JD Supra
In a prior practice pointer, we discussed the importance of reservation of rights letters. However, there are times when a lender will want to start enforcing one or more rights or remedies. In all or almost all jurisdictions in the United States, a lender is required to provide a written notice of default to the borrower and guarantors, and to make a written demand for payment, before exercising any rights or remedies.
Practice Pointer: Does a Bank Need to Send a Reservation of Rights Letter? | JD Supra
In an earlier e-alert, we discussed the statute of frauds for financial institutions, and the need for a signed writing. Does the statute of frauds render a reservation of rights letter a meaningless piece of paper that will only cause upset in the lender/borrower relationship? We think not.
Practice Pointer: When is an Agreement Enforceable Against a Bank? | JD Supra
The short answer is that an agreement is enforceable against a bank when the agreement is in writing and signed by the bank. But, the answer really depends on the jurisdiction involved. Many states have enacted special statutes of frauds to protect banks. These statutes require the existence of a written agreement signed by a bank before suit can be brought against the bank. These statutes exist in many states, including California, Illinois, Indiana, Michigan, Ohio and Texas.
Don’t Let the Signs Fool You, The Courts Are Open and Rendering Justice | JD Supra
Many of the state and federal courthouses in Michigan, Illinois, Indiana and Ohio are not open to attorneys or to other members of the public, with some exceptions. While the signs may say “Closed, Do Not Enter;” the courts are anything but closed. Rather, the courts are providing the judicial relief needed by creditors and others. In Michigan, the state courts have implemented a phased approach to the reopening of the courthouses.
Michigan Governor Updates Reopening and Workplace Safety Executive Orders | JD Supra
On July 29, 2020, Michigan Gov. Gretchen Whitmer signed Executive Orders 2020-160 and 2020-161. EO 2020-160 reaffirms many of the prior restrictions while tightening some, and permits the opening of casinos and racetracks, effective Aug. 5. EO 2020-161 is an amended version of EO 2020-145 and adds provisions relating to safety protocols for casinos and racetracks upon reopening.
Fifth Circuit Holds that SBA May Deny Paycheck Protection Program Loans to Debtors in Bankruptcy | JD Supra
The Fifth Circuit has waded into the debate on whether the SBA must make Paycheck Protection Program ("PPP") loans available to debtors in bankruptcy, clearly answering "No." The PPP, a central component of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), allows eligible small businesses to obtain guaranteed loans to pay certain expenses, such as payroll costs, rent, and utilities.
Courts Are to Remain Open Under Michigan's Shelter In Place Order | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
COVID-19: Practical Impacts of “Shelter in Place” and Limitations on Foreclosures and Evictions | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Courts Are to Remain Open Under Michigan's Shelter In Place Order | Lexology
On March 23, 2020, Michigan joined the growing ranks of states issuing shelter in place orders, designed to slow the spread of COVID-19. Michigan, like other states, recognizes exceptions to this mandate for essential services, and the Governor’s order expressly acknowledges that the Courts have the power to discharge their duties and may remain open. Courts have, however, limited in-person access and changed many of their procedures.
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