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Bankruptcy Litigation
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Flashcards
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The Meeting of Creditors (341 Meeting)
The meeting of creditors, also known as the 341 meeting, is a mandatory meeting where the debtor is questioned under oath by creditors, the trustee, and the U.S. Trustee.
Valuation Disputes
Valuation disputes in bankruptcy involve disagreements over the worth of assets, which can affect distributions to creditors, plan confirmation, and lien stripping.
Objection to Claims
Objections to claims are formal disputes lodged against the validity or amount of a creditor's claim within the bankruptcy case.
Executory Contracts and Unexpired Leases
Executory contracts and unexpired leases are agreements that include unperformed obligations on both sides, which the bankruptcy trustee can assume or reject.
Adversary Proceedings
Adversary proceedings are lawsuits related to the bankruptcy case, initiated by filing a complaint in the bankruptcy court.
Preference Actions
Preference actions are lawsuits filed by the bankruptcy trustee to recover payments made to creditors before bankruptcy that unfairly favor one creditor over another.
Discharge Injunction
A discharge injunction is a permanent order issued at the conclusion of a bankruptcy case that prohibits creditors from attempting to collect discharged debts from the debtor.
Non-dischargeable Debts
Certain debts like alimony, child support, certain taxes, and debts from fraud cannot be discharged in bankruptcy, remaining the responsibility of the debtor post-bankruptcy.
Reorganization Plan Confirmation
Confirmation is the bankruptcy court's approval of a debtor's plan of reorganization, which must meet specific requirements under the Bankruptcy Code.
Fraudulent Transfer Actions
Fraudulent transfer actions are suits to reverse transactions made by the debtor that were meant to defraud creditors or that transferred assets for less than their value.
Contested Matter vs. Adversary Proceeding
A contested matter involves disputes in an existing bankruptcy case handled through motions, while an adversary proceeding is a separate lawsuit within the case.
Sale of Assets in Bankruptcy
The trustee or debtor in possession can sell assets free and clear of liens and interests with court approval, to pay off creditors similarly to liquidation in Chapter 7.
Turnover Actions
Turnover actions are proceedings to recover property or the value thereof that the bankruptcy estate has the right to, from entities holding it when the bankruptcy petition is filed.
Bankruptcy Appeal Process
The bankruptcy appeal process allows parties to challenge bankruptcy court decisions, first through the district court or bankruptcy appellate panel, and potentially up to the Supreme Court.
Role of the Bankruptcy Court in Litigation
Bankruptcy courts primarily handle litigation related to a debtor's insolvency proceedings, including disputes between the debtor and creditors, and within creditor classes.
Substantive Consolidation
Substantive consolidation is a doctrine where a court can treat the assets and liabilities of separate but related entities as a single entity for the purposes of a bankruptcy case.
Equitable Subordination
Equitable subordination is a legal remedy that changes the priority of a creditor's claim in bankruptcy, typically due to misconduct or unfair conduct.
Proof of Claim in Bankruptcy
A proof of claim is a written statement filed by a creditor to assert their right to receive a distribution from the bankruptcy estate.
Lien Stripping
Lien stripping is a process in bankruptcy that can remove junior liens from an asset, such as a home, when there is not enough equity to cover the lien's claim after senior liens are paid.
The Automatic Stay
The automatic stay is an injunction that stops most lawsuits, foreclosures, and collection activities against the debtor the moment a bankruptcy petition is filed.
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