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Limiting ‘preference’ liability exposure in bankruptcy

Joe Foster

As the saying goes, what goes up, must come down. After years of robust growth, the U.S. economy appears to be hitting a rough patch. In the coming months, it is likely that some businesses will not survive the challenges that lie ahead, and will be forced to file bankruptcy.

As bankruptcy attorneys, we find that one of the most difficult issues to explain to a client is receipt of a demand letter from a bankruptcy trustee seeking return of payments from a customer received months or years before. To add insult to injury, the customer, now a debtor in bankruptcy, often still owes the client. In addition, the letter typically includes a threat that if the payment is not returned, the trustee will file a lawsuit.

This claim by the trustee is referred to as a “preference” action. The intent of the law is to prohibit insolvent companies from playing favorites or preferring a particular vendor over another. Preference claims force the so-called “preferred” vendor to return the payment so that all general creditors can enjoy equality of treatment.

A preference claim is, unfortunately, very simple to bring and very easy to prove. To successfully assert the

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What NYC’s Pay Transparency Law and Its Delayed Implementation Mean

​Despite delays and uncertainty about its implementation, one thing is for certain about New York City’s new pay transparency law: A lot of lawyers are going to get paid exploring it and its fluid, dynamic nature.

Earlier this year, the city enacted a law that requires employers to list the salary range in any job advertisement. Then, just as the law was about to go into effect in May, the city delayed its implementation to November with new amendments. This delay was implemented in part to allow both advocates of the law and those with concerns to continue discussing how this law can work in practice. 

The reason? The original version of the law left some terms undefined—including key ones for a law like this, such as “advertising” and “salary”—and the law was unclear on how hourly workers would be affected.

The May amendment signed by Mayor Eric Adams clarifies a few issues. There is now no financial penalty for a first violation if the employer resolves it within 30 days. And the law now specifically applies only to jobs that are performed at least in part within the city.

It’s likely that the mayor will sign another amendment

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‘Tennessee Justice Bus’ to bring legal advice to rural communities

NASHVILLE, Tenn. (WTVF) — The Tennessee Supreme Court has a new program to bring legal help to rural and disadvantaged communities through the Tennessee Justice Bus.

The bus is filled with computers, a printer, internet access, video displays, and other office supplies.

Lawyers and volunteers will be able to provide on-the-spot access to legal help and meet Tennesseans where they are to address the technology gap many rural and disadvantaged citizens face.

Access to Justice has been one of the Tennessee Supreme Court’s top priorities.

They said contrary to popular belief, people are not guaranteed access to an attorney when they encounter civil legal issues.

People who can’t afford an attorney are left to handle a variety of legal issues on their own like evictions, child custody, debt and credit issues, and unfair labor practices.

The bus will help fill the gap.

The Tennessee Justice Bus will officially launch Monday morning in downtown Nashville.

The Tennessee Justice Bus will travel the state to provide pop-up legal services where needed. These legal clinics and community events are commonly held in conjunction with legal aid providers, churches, nonprofit organizations and public service providers

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Wave of homeowners forced to use Citizens Insurance

WEST PALM BEACH, Fla. — Homeowners in Florida are signing up for Citizens Property Insurance Corporation at a frantic pace as hurricane season begins and the state’s insurance crisis seems to deepen.

Citizens Property Insurance Corporation is currently writing policies at a frantic rate, approaching 900,000 in Florida.

It’s an issue that can have consequences for all Floridians.

Insurance agent Robert Norberg of Arden Insurance in Lantana is among the growing list who is using Citizens Insurance.

Robert Norberg, Arden Insurance, June 9, 2022

WPTV

Robert Norberg discusses the influx of people using Citizens Insurance in Florida.

“I will be in Citizens along with the rest of the folks,” Norberg said.

RELATED: Citizens Insurance cites growing underwriting losses

There are plenty of folks using Citizens Insurance — more than 887,000 by the latest count. This number is growing and growing.

“Currently Citizens, I believe, is taking over 30,000 policies a month,” Norberg said. “The more people in Citizens, the worse it can be for the Florida economy and Florida consumers.”

What’s driving this is mostly canceled policies and suddenly insolvent companies cutting homeowners loose right at the start of hurricane season.

The latest company — Southern Fidelity — failed to meet financial requirements and is now endangering

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Angelos’ sons engage in legal battle over law firm, Orioles management

Mike Elias, center, the Baltimore Orioles’ executive vice president and general manager, poses for a photograph with Orioles ownership representative Louis Angelos, left, and executive vice president John Angelos on Nov. 19, 2018, in Baltimore. The two Angelos brothers are locked in a legal battle over control of their father’s law firm and the baseball team. (AP Photo/Patrick Semansky)

A bitter battle between brothers over the future of their storied and ailing father’s Baltimore law firm will be waged in a Baltimore County courtroom as Louis Angelos filed suit Thursday against John Angelos seeking a judicial order that he not interfere with The Law Offices of Peter G. Angelos PC.

In the complaint, Louis also alleges that John has wrongfully assumed unilateral control over the Baltimore Orioles, which Peter Angelos owns, and is seeking a Baltimore County Circuit Court judge’s order to rein in John.

Louis’ requests for the two court orders are based on his allegation that John’s actions regarding the firm and baseball team have violated his fiduciary obligations of loyalty, good faith and honest as a co-trustee with Louis of their father’s revocable trust.

An aide to John, who is the Orioles chief executive officer, said Friday

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