1. A mere eight days after it was formally incorporated as a business, Schaefer Salt Recovery Inc. (SSR) filed a petition under Chapter 11 of the bank ruptcy code. SSR’s only assets were mortgages on three properties on which foreclosure actions brought by Segal were pending in court. SSR’s vice president and attorney, Khoudary, advised Segal’s attorney that the foreclosure actions could not be enforced as a result of the filing. Presumably this was one of the reasons why Khoudary advised Segal’s attorney that “Segal was skunked.” Segal moved to dismiss the Chapter 11 petition for cause, arguing that the petition had been filed for the sole purpose of frustrating Segal’s efforts to conclude the pending foreclosure actions. Did SSR act in bad faith by filing the petition for bankruptcy, and will Segal be successful in foreclosing on the mortgages?
2. Jensen was involved in a motor vehicle accident with Boyer. Jensen brought suit against Boyer, alleging that her negligence caused the accident. Boyer then brought a countersuit against Jensen, claiming that it was actually Jensen’s negligence that caused the accident. Jensen subsequently filed for bankruptcy protection. The bankruptcy court issued a discharge, and Jensen filed a motion to dismiss Boyer’s lawsuit due to the bankruptcy discharge. Are lawsuit judgments discharged in a bankruptcy, and will Jensen be successful in having Boyer’s claim against him discharged?
3. Following months in which Chrysler experienced deepening losses and received billions in bailout funds from the federal government, the company, now referred to as Old Chrysler, filed a bankruptcy petition under Chapter 11. The filing unsuccessfully sought additional government bailout funds for a restructuring, but the bankruptcy court ultimately settled on a transaction in which most of Old Chrysler’s operating assets would be transferred to New Chrysler in exchange for $ 2 billion in cash and other consideration. In addition, Fiat, another automobile manufacturer, agreed to provide New Chrysler with certain fuel- efficient vehicle platforms, access to its worldwide distribution system, and new management that was experienced in turning around a failing auto company. Financing for the sale would come from the U. S. Troubled Asset Relief Program (TARP) and from Export Development Canada. The United Auto Workers union, the United States Treasury, and Export Development Canada would own the New Chrysler. Fiat, for its contributions, would immediately own 20 percent of the equity with rights to acquire more. Numerous groups appealed, seeking to stop the Chapter 11 bankruptcy from proceeding. Does it seem likely that the appeals court will support the settlement reached in the bankruptcy court?