SU_MBA5005_WK3_Berry_Henry

docx

School

Walden University *

*We aren’t endorsed by this school

Course

5005

Subject

Law

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by ToniaR4

Running head: BANKRUPTCY 1 Week 5 Project: Georgia Bankruptcy Laws MBA 5005: Law and Ethics for Managers Henry Berry November 27, 2023

GEORGIA BANKRUPTCY 2 Georgia Bankruptcy Literature Review The one thing that all people, small businesses, and giant enterprises have in common is bankruptcy. Since separate laws may apply to people and large and small enterprises, as well as because financial difficulties can affect everyone, bankruptcy laws can be complicated. A common instrument used by both individuals and companies to get rid of potential debt and start over with a clean credit record is bankruptcy. Nonetheless, there are differences between business liquidation and personal bankruptcy, including distinct components and regulations. (Nolo, n.d) Individuals typically file either: Chapter 7 or 13  Bankruptcy under Chapter 7 addresses debtors who refuse to pay back debt they have accrued. Low-wage workers are entitled to this component, which results in a liquidation waiver of qualifying responsibilities.  Individuals who have income sufficient to pay off their obligations under a payment agreement would file for bankruptcy under Chapter 13. This section's goal is to help those who, due to liquidation, find themselves in a different financial situation or who are struggling to make ends meet but are not in dire straits. Corporations and Businesses file either: Chapter 7 or 11  Chapter 7 - Chapter 7 filing is also available to organizations, but the outcome is the element's dissolution as opposed to its rearrangement.  Chapter 11: Restructuring or substituting capital to meet Section 11 duties is advised for organizations such as alliances. There is virtually always a restructuring following a

GEORGIA BANKRUPTCY 3 Chapter 11 recording. Although loan managers may also offer alterations once a specific period has passed, borrowers may initially make their own arrangements. To adopt whatever deal is favored, the banks must cast a vote. Note: Although Chapter 11 bankruptcy is an option, most people choose Chapters 7 or 13, as Chapter 11 is more complicated. One of the biggest distinctions between entity and company liquidation is the methods test. To find out if they qualify for a Chapter 7 or Chapter 13 recording, individuals must attend one; however, businesses are exempt from doing so for a Chapter 11 recording. Leonard (2004). The organization may also end the leasing arrangement if doing so will benefit both parties financially. As for personal debt, such as college loans or other debts unaffected by bad debts, people are powerless. Leonard (2004) Account holders did not agree with the 1898 Bankruptcy Act when it was passed, but after it was put into effect, vested parties changed, opinions about the rationale behind chapter 11 law changed, and groups with different ideologies took positions on liquidation that led to the development of well-disposed indebted persons insolvency laws in the US. Hansen (2005). When chapter 11 legislation is examined, the results are more in line with the data than the widely accepted theory that the well-disposed liquidation legislation for debtors was the outcome of a political compromise in 1898. Hansen (2005) The laws pertaining to bankruptcy are always separated into three parts. First, it creates a general framework for settling all of the insolvent element's debts, regardless of when they become due. (White, 2011) It also provides standards for allocating the funds and earnings that are used to reimburse lenders. Third, the laws pertaining to bankruptcy create penalties meant to deter debtors from going into default and from looking for outside funding. (White, 2011) In order to assess whether and when chapter 11 law encourages borrowers and loan officers to act in

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

GEORGIA BANKRUPTCY 4 a way that benefits them financially, this study looks at the law. It also considers how to change the liquidation regulations to increase the amount of money produced (White, 2011). The audit shows that insolvency legislation has a range of financial destinations given the diverse implications of the legislation. A subset of these objectives is contrasted for individuals vs. organizations in Chapter 11 (White, 2011). Scholarly Article # 1: Is Bankruptcy the Best Way to Handle Your Debt Issues? Chapters 7 and 13 of Bankruptcy are covered in this article. It clarifies what bankruptcy is, who is eligible to file, and answers key queries that a filer might have, like:  Will it wipe out debts?  Can you keep the house?  How hard is it to file? It also covers chapters 11 and 12, provides a check list, and lists possible resources. Scholarly Article # 2: The Limited Lifespan of the Bankruptcy Estate: Managing Consumer and Small Business Reorganizations This article states that "Congress made debt adjustment bankruptcy available to small businesses in 2019, marking the largest expansion of debt adjustment bankruptcies since the Bankruptcy Code was enacted" (Seymour, 2020). The primary doctrinal dispute amongst the courts is about the life expectancy of the insolvent home. The requested property is covered by the planned stay and is under judicial monitoring. (Seymour, 2020) The home end theory, a liquidation bequest concept brought about by debtors' transitional insolvencies, is defended in this article. This hypothesis states that the chapter 11 bequest has a finite lifespan. This idea states that the chapter 11 bequest has a limited lifespan. (2020, Seymour). Moreover, the early

GEORGIA BANKRUPTCY 5 closure of the liquidation home exudes tact, as if it were the standard. Within the jurisdiction, property can be protected, albeit there are limitations on this ability. Before land can be owned inside the jurisdiction, its presence must be substantially justified by chapter 11 law. (2020, Seymour). Scholarly Article # 3: Extreme municipal fiscal stress and austerity? A case study of fiscal reform after Chapter 9 bankruptcy A kind of insolvency known as Chapter 9 bankruptcy impacts entire regions, including cities, municipalities, provinces, and school districts. While negotiating a plan to alter their responsibilities, Section 9-recording areas obtain insurance from lessees. (Nitz, 2017) Detroit became the largest city in US history to file for bankruptcy when it filed for part 9 bankruptcy in 2013 (Nitz, 2017). In the US, national and state governments have shifted spending issues to the local level as part of post-recession urban redevelopment, and localities have responded with a range of reforms. Although these changes have often been referred to as "gravity" (Davidson, 2019), some have suggested that urban reactions to economic pressure have generally been "serious." (Davidson, 2019) Because of this, opinions in the US vary on how much depression is a natural tendency following a recession. According to Davidson (2019), Vallejo filed for Chapter 9 bankruptcy following the financial crisis in 2008. (Davidson, 2019). The city is a prime candidate for melancholy rehabilitation because it experienced excessive spending issues both during and after its bankruptcy. (Davidson, 2019) Research, however, shows that Vallejo implemented a variety of post-insolvency measures that are not statistically typical in terms of severity or realism, including cost-controlling, income-raising,

GEORGIA BANKRUPTCY 6 hazard management, and participatory planning. (Davidson, 2019) In general, the paper examines the philosophical and political elements that influenced Vallejo's post-recession recovery and how the city's primary financial worries have prevented the city from realizing its objectives. (Davidson, 2019) Cases: Period Homes, LTD. v. Wallick, 2002 In 1991, Wallick filed for Chapter 11 insolvency processes; this was immediately converted to a section 7 out of 1995. To trade Wallick's riches and distribute them to his banks, a trustee was chosen. Wallick informed the trustee indiscreetly about the breach of the contract guarantee against Period Homes, but he never updated his schedule of resources to include the case in Chapter 7 insolvency. (Wallick v. Period Homes, LTD., 2002) In November 1995, Wallick sold the property that served as the initial focus of the Period Homes deal for $730,000 to a third party. After a year, the trustee concluded Wallick's Chapter 7 liquidation litigation. After being eventually disbursed to Wallick, the insolvency bequest had more than $61,000. (Wallick v. Period Homes, LTD., 2002) Wallick therefore brought a breach of contract case against Period Homes. In a move for summary judgment, Period Homes said that the litigation was precluded by the civil estoppel clause because Wallick had neglected to amend his Chapter 11 schedule of resources to reflect the breach of contract commitment. The preliminary court gave Period Homes a negative verdict in the foundation. (Wallick v. Period Homes, LTD., 2002) Periodic Holmes initially prevailed in the dispute, claiming that Walliick had neglected to modify his bankruptcy filing under "the doctrine of judicial estoppel" (Period Homes, LTD. v. Wallick, 2002). The Court of Appeals overturned this decision on the grounds that Wallick had no justification—legal or otherwise— for changing his Chapter 11 timetable of services, and so, judicial estoppel was not appropriate.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

GEORGIA BANKRUPTCY 7 (Wallick v. Period Homes, LTD., 2002) Only in specific situations, such as a Chapter 13 liquidation process, could a borrower under Chapters 7 or 11 modify his timeline of capital to reflect property acquired after the case started. [See "Any interest in property that the estate acquires after the commencement of the case," 11 U.S.C. § 541(a)(7)]. In re CITY OF DETROIT, MICHIGAN, Debtor. 2013 The evidence before the Court establishes that, notwithstanding the fact that the City of Detroit has experienced declining population, business, and incomes for a long period, the City of Detroit has experienced declining population, business, and incomes. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) This has resulted in a deteriorating framework, irrational acquisition, rising crime rates, spreading curse, and a decline in personal pleasure. The city no longer has the resources to provide its residents with the basic police, fire, and emergency medical services that they require for their safety and well-being. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) “The City estimates its debt to be $18,000,000,000. This consists of $11,900,000,000 in unsecured debt and $6,400,000,000 in secured debt. It has more than 100,000 creditors” (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013). Between 1972 and 2007, the city lost around 80% of its assembling foundations and 78% of its retail foundations. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) The number of jobs in Detroit has decreased from 735,104 in 1970 to 346,545 in 2012. In June 2000, the unemployment rate in Detroit was 6.3 percent; in June 2010, it was 23.4 percent; and in June 2012, it was 18.3 percent. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) The number of employed Detroit residents decreased from roughly 353,000 in 2000 to 279,960 in 2012. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) The Court inferred that the City of Detroit might be a borrower under section 9 of the liquidation law under 11 U.S.C. 109(c). As required by 11 U.S.C. 921, the Court will immediately file a request for 191*191 assistance (d). (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) The Court reminds all parties involved that this qualifying guarantee is just a basic issue in this bankruptcy proceeding. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) The ultimate goal of the city is

GEORGIA BANKRUPTCY 8 confirmation of a transformation plan. It has said on the record that it intends to complete that levelheaded with all deliberate speed and to publish its arrangement in a timely manner. Similarly, the Court strongly encourages the parties to begin negotiating, or, if they have already begun, to continue negotiating, with the goal of reaching an amicable agreement. (In re CITY OF DETROIT, MICHIGAN, Debtor., 2013) Bankruptcy Summary One of the main goals of the government insolvency laws enacted by Congress is to provide indebted people with a monetary "fresh beginning" from their debts. (US Courts, n.d.) In a 1934 decision, the Supreme Court stated the following regarding the reason for the liquidation law: (US Courts, n.d.) “It gives to the honest but unfortunate debtor a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt” (US Courts, n.d.). The United States Constitution's Article I, Section 8 authorizes Congress to pass "uniform Laws in the Matter of Bankruptcies." (US Courts, n.d.) Congress passed the "Insolvency Code" in 1978 as a result of this power transfer. Since its inception, the Bankruptcy Code, which is included in Title 11 of the United States Code, has been changed several times. (US Courts, n.d.) All chapter 11 matters are governed by this standard government statute. (US Courts, n.d.) The Federal Rules of Bankruptcy Procedure (also known as the and nearby guidelines of every insolvency court govern the procedural aspects of the chapter 11 engagement. (US Courts, n.d.) The Bankruptcy Rules include a number of tried and tested structures that can be used in chapter 11 cases. The Bankruptcy Code and Bankruptcy Rules provide forth the official legal techniques for dealing with people's and organizations' debt problems. (US Courts, n.d.) The United States liquidation judge, a judicial officer of the United States area court, has dynamic authority over government insolvency proceedings. (US Courts, n.d.) Any aspect of a chapter 11 case, such as qualification to document or whether a borrower should receive a release of obligations, can be decided by the liquidation court. (US Courts, n.d.) Despite the fact that a substantial portion of the chapter 11 engagement is authoritative, it is guided away from the town hall. (US Courts, n.d.) This

GEORGIA BANKRUPTCY 9 authoritative engagement is done by a trustee who is assigned to direct the case in instances under sections 7, 12, or 13, and occasionally in part 11 situations. (US Courts, n.d.) References Leonard, R. (2004). Bankruptcy: Is It the Right Solution to Your Debt Problems? Vol. 2nd ed. Nolo. Nolo (n.d.) The Differences Between Personal and Corporate Bankruptcy Retrieved from https://www.thebankruptcysite.org/resources/bankruptcy/filing- bankruptcy/thedifferences-between-personal-corporate-bankruptcy/

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

GEORGIA BANKRUPTCY 10 Seymour, J. M. (2020). The Limited Lifespan of the Bankruptcy Estate: Managing Consumer and Small Business Reorganizations. Emory Bankruptcy Developments Journal, 37(1), 1–63.

SU_MBA5005_WK3_Berry_Henry

Related Documents