June 2023

Former lawyer gets more than 3 years in prison in bankruptcy fraud scheme tied to collapse of Bridgeport bank

A former Chicago attorney was sentenced Tuesday to more than three years in prison for helping her brother hide hundreds of thousands of dollars in assets in bankruptcy proceedings tied to the collapse of a Bridgeport neighborhood bank.

Jan Kowalski, 59, pleaded guilty last year to concealing assets from a bankruptcy trustee, admitting she falsified documents and lied during testimony in bankruptcy proceedings for her brother, Robert, costing creditors about $357,000.

In sentencing Kowalski to 37 months behind bars, U.S. District Judge Virginia Kendall called her conduct “extremely serious,” particularly for an attorney who had taken an oath to uphold the law.

“It is the complete antithesis of what an attorney is supposed to be doing,” Kendall said. “People lose faith, and it really is the beginning of the destruction of our judicial process and the destruction of our democracy.”

Kowalski’s attorney, William Stanton, had asked for probation, saying she suffers from a lengthy list of physical and mental ailments, is the sole caretaker for her elderly mother, and has a son who has had his own difficulties.

Before she was sentenced, Kowalski, dressed in a hooded sweatshirt, stood at the lectern and lamented her situation but did not apologize

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June 30, 2023 by ATTORNEY

How rising water costs could drive this Michigan city to bankruptcy

HIGHLAND PARK, Mich. — Surrounded by some of the largest fresh bodies of water in the country, many Michigan cities still struggle to provide their residents with safe and affordable drinking water.

That irony is especially painful in Highland Park, Michigan, an enclave city surrounded by Detroit, may be facing bankruptcy over tens of millions of dollars in water bills — the costly aftermath of a financial crisis that left residents without a working water plant.

READ MORE: How segregation and neglect left Benton Harbor, Michigan with toxic water

Highland Park Mayor Glenda McDonald asked the city council to approve hiring an attorney to help prepare for its mediation in May over its water debt with the Great Lakes Water Authority (GLWA). When the council did not approve this request, the mayor declared a state of emergency and asked the state to approve an expedited bankruptcy to get their financial affairs in order.

“Highland Park’s annual water and sewer bills of $7,000,000, and growing, are almost as much as our total property tax collections of $9,000,000 per year,” McDonald said in a statement in April.

McDonald also said it is “unjust and unconscionable” for 2,000 households in Highland Park

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June 27, 2023 by ATTORNEY

Bankruptcy Expert Claims It May Be Your Only Option if Biden’s $20K Student Loan Forgiveness Plan Fails
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Shutterstock / Shutterstock

President Joe Biden’s plan to forgive up to $20,000 in federal student loan debt per borrower could soon reach endgame if the U.S. Supreme Court rules against the plan this month, as many predict. If the plan is struck down, at least one legal expert says bankruptcy might be the only option for many borrowers.

Student Loan Payments: Here’s the Official Date You Need To Start Paying Again
Learn: How To Build Your Savings From Scratch

The reason is simple: Many borrowers won’t have enough funds when federal student loan payments resume sometime this summer following a pause of more than three years.

About 20% of student loan borrowers have already defaulted on a loan, according to Jonathan Petts, CEO of Upsolve, a non-profit organization that helps individuals file bankruptcy without using a private attorney. The total amount already in default is more than $124 billion.

“This demonstrates a clear need for a plan to help borrowers facing challenges with paying off their debts,” Petts told GOBankingRates in an email.

He said the Biden forgiveness plan is “likely to be struck down” by the SCOTUS, which means both loan payments and interest will resume not too long

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June 26, 2023 by ATTORNEY

FTX bankruptcy ‘on track to be very expensive’ as fees top $200mn

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Lawyers, advisers and other professionals working on the FTX bankruptcy have racked up $200mn in fees as they attempt to restructure the “smouldering heap of wreckage” left behind by the cryptocurrency exchange’s collapse in November, an independent auditor found.

In a 47-page filing on Tuesday, a court-appointed fee examiner said she believed the amounts invoiced by hundreds of lawyers from firms including Sullivan & Cromwell and Quinn Emanuel Urquhart & Sullivan, alongside other financial and tax advisers, were not “wholly unreasonable”.

“FTX is hardly the first business organisation felled by a knave,” Katherine Stadler wrote, in an apparent reference to the company’s founder Sam Bankman-Fried, who was charged by federal prosecutors last December over his exchange’s spectacular implosion.

“What makes these cases extraordinary, however, is the largely unregulated financial system in which the debtors (and other similar financial technology companies) operate, combined with their global scope, the complete absence of corporate records, and the non-existence of even the most basic corporate governance,” she added.

Stadler’s report, which focused on the fees requested for the first 90

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June 25, 2023 by ATTORNEY

U.S. Supreme Court says bankruptcy law overrides tribal sovereignty

  • Justice Jackson ruled that bankruptcy law treats tribes the same as other governments
  • Tribe argued it was neither a “foreign” nor “domestic” government
  • Dispute centered on a tribe’s effort to collect an overdue $1,100 payday loan

NEW YORK (Reuters) – The U.S. Supreme Court ruled on Thursday that U.S. bankruptcy protections override a Native American tribe’s sovereign immunity, stopping the tribe’s effort to collect on an overdue payday loan taken out by one of its members who subsequently filed for bankruptcy.

In an 8-1 opinion written by Justice Ketanji Brown Jackson, the court ruled that U.S. bankruptcy law applies to all creditors and “abrogates the sovereign immunity of any and every government,” including tribes. Tribal governments are not entitled to an exception solely because the U.S. bankruptcy code does not specifically mention Indian tribes when describing how it applies to governments, Jackson wrote.

The Wisconsin-based Lac du Flambeau Band of Lake Superior Chippewa Indians had petitioned the Supreme Court after an appeals court rejected its effort to collect on a high-interest $1,100 payday loan extended to Brian Coughlin, a member of the tribe. Coughlin had borrowed the money from the tribe-owned business Lendgreen in 2019, but he filed for Chapter

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June 24, 2023 by ATTORNEY
June 2023
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