Saturday, July 18, 2015
Recent Bankruptcy News: Rapper 50 Cent (nee Curtis Jackson) files Chapter 11 after a $5 million dollar judgment for posting a rival's girlfriend's sex tape online in 2009 and making derogatory comments about it in a voice-over. However, the bankruptcy judge ordered that the punitive damages portion of the trial is going to continue. This could be a problem for 50 Cent because malicious and willful injuries might not be dischargeable in bankruptcy. Mr. Cent claims he owes $28 million in debts. He may have to change his motto from "Get Rich or Die Trying" to "Get Rich or File Chapter 11." Chase Bank was sanctioned in the credit card robo-signing scandal for questionable and invalid debt data sold to third party collectors. Among other punishments, Chase must pay $50 million in refunds and stop selling some debts. U.S. Supreme Court releases its decision in Bank of America v. Caulkett. You still can strip unsecured second liens, but must use Chapter 13 - not Chapter 7. Some lawyers and a few judges believed that strip-off could be done in Chapter 7, but the statutes seemed pretty clear. The real issue is whether creditors will start challenging strip-offs in Chapter 13. Senators are advocating for a bill to allow Puerto Rico to file for bankruptcy to reorganize its debts.