Author: SGR

About SGR

    When Debtor, Ms. Aleckna (“Aleckna”), filed for Chapter 13 bankruptcy relief, she had completed her university coursework but still owed California Coast University (“CCU”) $6,300 in tuition. While her bankruptcy was pending, Aleckna asked CCU to forward to her a copy of her transcript. CCU responded that they would only provide an “incomplete” transcript which did not include a graduation date, explaining that a “financial hold” had been placed on her account. CCU then filed a Complaint to Determine the Dischargeability of this Debt (“Complaint”) to which Aleckna filed a counterclaim against CCU. She argued that CCU had willfully violated the automatic stay (per 11 U.S.C. Section 362(k)) imposed as a result of the bankruptcy filing by refusing to give her a complete and certified transcript and by engaging in “collection actions” in trying to collect the unpaid tuition while her bankruptcy was pending. CCU then tried to withdraw its Complaint, but the Bankruptcy Court refused the request and held a trial regarding whether CCU’s actions were a willful violation of the automatic stay. The Court found in Aleckna’s favor concluding that CCU was attempting to collect a pre-petition debt during the pendency of the Chapter 13. The Bankruptcy Court held that Aleckna was entitled to receive her full transcript and failure to do so was akin to not supplying a transcript at all. They also, inter alia, awarded actual damages ($230.16) and attorneys fees ($100,000) because the CCU’s violation was “willful”.

    CCU appealed this ruling to the District Court, arguing that its violation could not have been “willful” under the Third Circuit’s decision in In re University Medical Center, 973 F.2d 1065 (3d Cir.1992) as the case law was “unsettled” as to the obligation to provide a complete transcript, which could have provided them with a limited defense to the claim of a “willful” violation. The District Court affirmed the Bankruptcy Court ruling, and CCU then appealed to the Third Circuit, which also affirmed.

    The Third Circuit held, in a precedential opinion (See In Re Aleckna (No. 20-1309, Sept. 9, 2021)), that University Medical remains good law and provides a mechanism by which one can challenge a finding of willfulness. The Court then found that CCU failed to show that the law regarding the transcript issue was “sufficiently unsettled” within the meaning of University Medical, and that CCU failed to establish a defense under this case law. Therefore, the violation of the stay was deemed to be willful. The Third Circuit was also very careful in pointing out that even a “good faith” defense by a creditor in that it did not believe its actions violated the automatic stay is not a defense to willfulness. Rather, willfulness is separate and distinct from good faith.

    CCU next argued that the District Court erred in awarding damages and attorneys fees because there was no affirmative injury in this case. Section 362(k)(1) provides that “an individual injured by any willful violation of a stay shall recover actual damages, including costs and attorneys fees, and, in appropriate circumstances, may recover punitive damages.” Herein, the Third Circuit concluded that the injuries for which Aleckna was compensated through the lower Court’s award were cognizable under Section 362. As stated above, Aleckna was awarded: (1) $230.16 for the time she took off from work to attend trial; (2) her litigation attorneys fees (for fees associated with attempts to get her transcript and the litigation costs); (3) three copies of her certified transcript containing a graduation date; (4) a diploma; and (5) the pre-litigation attorneys fees she incurred while attempting to obtain her complete transcript. Even if the financial harm to a student is arguably small, the Third Circuit held that her failure to receive a complete transcript without court intervention constituted a cognizable injury under Section 362. Furthermore, the fact that CCU did not provide a compelling explanation as to why the attorneys fees did not constitute a financial injury on their own was fatal to their argument. Finally, the Third Circuit observed that the automatic stay is designed to protect “both financial and non-financial interests”.

    Therefore, the Third Circuit held that the District Court did not err in concluding that Aleckna had been injured by the university’s violation and that the award of damages and attorneys fees was appropriate.

    To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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    Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected as one of the 500 Leading Plaintiff Employment and Civil Rights Lawyers by Lawdragon™ in its 2021 list of the nation’s best plaintiff employment and civil rights attorneys.

    Epstein has been selected for this honor for the past four years, since the category was created in 2018. The 500 honorees are chosen in Lawdragon™’s research-driven, journalistic process that vets the views of peers and competitors, and recognizes large wins. Practitioners who were recognized have been securing positive results for workers for 10 years to more than 50 years.  Epstein was one of only 11 Philadelphia lawyers chosen for this nationwide distinction.

    Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

    Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

    He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™. He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

    In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

    Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

    Spector Gadon Rosen Vinci PC has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

    The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

    The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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    Adam A. Filbert has joined the team at Spector Gadon Rosen Vinci P.C. as a Law Clerk. He is the youngest addition to the SGRV family, attesting to his exceptional skills. His presence brings a breath of fresh air to the firm through his new ideas and perspectives on a variety of topics.

    Mr. Filbert has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

    Some of Mr. Filbert’s previous work experiences outside of SGRV include time spent as a Legal Intern for Chief Judge Juan R. Sanchez of the Eastern District of Pennsylvania, and as a Legal Intern with the Pennsylvania Attorney General Bureau of Consumer Protection, where he primarily worked on large multi-state litigation cases and investigations.

    Mr. Filbert was actively involved in many extra-curricular activities during his time as a law student, including his work with client intake for the SeniorLAW Center in Philadelphia. He also served on Drexel University’s Thomas R. Kline School of Law’s Cybersecurity group, as part of their writing group. In addition, he was a staff editor on Drexel’s Law Review, as well as legal editor for the Pennsylvania Nonprofit Corporations Act Treatise.

    Filbert will be focusing his practice primarily on Employment Law and Commercial litigation. He will be working closely with the esteemed Alan B. Epstein on a variety of projects.

    Mr. Filbert holds  a J.D., Cum Laude, from Drexel University’s Thomas R. Kline School of Law with a Concentration in Business and Entrepreneurship law, and a B.S. in Digital Communications with a Concentration in Business Technology.

    Filbert is an avid outdoorsman. In his free time, he enjoys hiking and exploring nature, in addition to playing lacrosse and cooking.

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    SGRV attorneys, staff, friends, and family gathered together on Friday, August 20 to celebrate everyone involved with the firm’s hard work and dedication. Steel Pier was the place to be on Friday as a seafood buffet tantalized taste buds and rides and activities brought out everyone’s inner child.

    The event was made possible by SGRV’s friendship and ongoing collaboration with Steel Pier as a valued client. This year’s event, returning after a year in hiatus during the 2020 lockdowns, was a welcome return to an annual tradition, and one of the most successful so far- with a new menu and large turnout. In addition to the festivities, a raffle was held, featuring a number of varied prizes, after which most attendees did not leave empty-handed.

    Friends, family, and loved ones came together to keep spirits high, and words from both SGRV Chairman Paul R. Rosen, and Shareholder and Director George M. Vinci Jr. set an optimistic tone for the future. Vinci expressed how, at the onset of the COVID-19 pandemic and lockdown, he was unsure how the firm would continue to grow and expand in the face of such circumstances. Regardless of these trials and tribulations, Vinci affirmed that SGRV had emerged stronger and more resilient than ever imagined.

    Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

    The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

    The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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    Spector Gadon Rosen Vinci helped sponsor a fun day of golf and giving at the Inaugural Annual Ali Spears Charity Golf Tournament. The event took place on Friday, August 20, 2021 at the Westchase Golf Club in Tampa, Florida.

    Activities abounded throughout the day: putting and hole-in-one contests, prizes, raffles, a silent auction, and much more helped attract a large and enthusiastic crowd to enjoy a day to help support a worthy cause.

    The Ali Spears Foundation is a 501(c)(3) non-profit charitable organization. Their mission is to help families dealing with pediatric cancer overcome hardship, empower the community by raising awareness for pediatric cancer, and help find a cure for pediatric cancer by donating funds to research.

    The foundation takes part in a variety of fundraising activities included but not limited to an Annual New Year’s Day golf cart parade, farmers market sales, and other fundraising activities organized and facilitated by teens.

    The major beneficiaries of the Ali Spears foundation are hospitalized children who receive gifts and toys, as well as funding for pediatric cancer research at Johns Hopkins All Children’s Hospital, with more beneficiaries to come in the future.

    Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

    The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

    The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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    Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected to the 28th Edition of The Best Lawyers in America© list for the year 2022. Epstein was selected regarding his professional excellence in individual employment law and labor and employment litigation.

    As the oldest and most respected peer review publication in the legal profession, recognition in Best Lawyers is widely regarded by both clients and legal professionals as a significant honor. For over forty years, Best Lawyers has gained a reputation as a truly unbiased source of legal referrals. Epstein was chosen for this honor following an exhaustive peer review process in which the nation’s leading lawyers confidentially evaluate their professional peers.

    Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

    Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

    He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who.  He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™.   He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

    In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

    Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

    Spector Gadon Rosen Vinci PC has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

    The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

    The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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    Bankers and SBA staffers may soon have that hangover, of their own making. I am speaking, of course, about the Paycheck Protection Program debt hangover – 11.7 million loans created to be forgiven. Everyone knows that forgiveness is hard – hard to request, and, often, even harder to grant – especially when big money is involved. But who could have imagined the challenges of walking away from $400 billion in bank debt?

    (Actually, the total amount began as $800 billion, before loans already wiped off the books.)

    To try to chip away at that mountain of, literally, debt, the Small Business Administration recently created its “direct forgiveness” portal (https://dfussbaforgiveness.zendesk.com/hc/en-us), for loans under $150,000.00 – over 90% of all PPP loans. That sheer volume has, reportedly, delayed completion of bank forgiveness approvals – 11.7 million separate applications must be filed, reviewed and processed.

    To try to break the backlog, the Small Business Administration recently created a new portal (open on August 4, 2021) for “direct” forgiveness by the SBA, rather than by the bank lender. To avoid the appearance of cutting into lender/borrower relationships, the SBA quickly clarified that it will not take “over the forgiveness decision responsibility from the lender.”

    Instead, according to the SBA, “Lenders retain responsibility for making the loan forgiveness decision. SBA is simply providing a proven, user-friendly platform on which borrowers may submit their forgiveness applications and lenders will submit their forgiveness decisions to SBA.”

    If so, why go to the expense of reinventing the loan forgiveness wheel – and adding a new step to what has been a convoluted process?

    Lenders must also choose to “opt in” to the portal, presumably to avoid the cost of creating their own review process – a procedure lenders already do every day, for all loans. Veterans of the PPP scramble in 2020 may also question the characterization of the SBA software as “proven.” Moreover, many lenders may have already incurred costs to build their own forgiveness software. In fact, the 60-day deadline for lenders to process forgiveness applications, and constantly changing program rules (including predictions of expedited procedures), may even have led some lenders to delay the start of processing of their own forgiveness applications.

    Why incur unrecoverable costs today, that may be avoidable tomorrow, under the next attempt at simplification? Whatever the reason, many lenders have already declined to participate in the SBA’s direct forgiveness procedure, in favor of their own portals. From a lender perspective, direct forgiveness also eliminates a major incentive to participate in the PPP program – new customer relationships. A bank can’t promote its fee-based services if the customer deals only with the SBA, rather than with a bank relationship officer. Keeping the forgiveness process “in-house,” in contrast, preserves that relationship-building opportunity, in the context of a success experience for the PPP borrower (loan forgiveness).

    Lenders must also monitor the new SBA portal for information about the loan status. Without affirmative SBA reporting of loan status, however, bank auditors and compliance officers must regularly check the forgiveness portal before issuing routine financial statements or reports – a lender headache, especially for smaller PPP loans with little or no margin to recover monitoring and forgiveness expenses. If those loans were marginally profitable before this direct forgiveness program, how much more so will they be with these additional expenses? Regardless whose software is used, of course it will work, seamlessly – doesn’t all software perform as intended, out of the box? Perhaps the banks that have “opted out” of the SBA portal don’t want to risk their reputation with borrowers on the quality of the SBA’s new software code (or the SBA’s “real time” quality control of it).

    SBA Associate Administrator Patrick Kelley well stated what may be bank lenders’ frustration:

    Give it over to the government and get your life back. All of us want to be done with forgiveness — borrowers, lenders, government — by the fall, across the board. So this is the final push that will hopefully put PPP in the rearview mirror for the borrowers, for the lenders and for the agency.

    Will we soon have to do it all over again, if a portal is created for larger PPP loans? Or for the required lender verification of borrower revenue loss eligibility for Second Draw PPP loans? To continue the “hangover” metaphor, perhaps the new portal is just the proverbial “hair of the dog” – let’s just get the PPP loans off society’s books, and let banks return to “real” loans.

    To discuss this or other issues involving the Paycheck Protection Program, please contact Stanley P. Jaskiewicz or the SGRV Corporate Group at 215-241-8866.

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    SGRV attorney Stanley P. Jaskiewicz has been appointed to serve on the American Bar Association’s Voice of Experience Board for the 2021-22 bar year.

    Voice of Experience (VOE) is the Senior Lawyers Division’s monthly e-newsletter. Each issue covers a broad range of topic areas, such as lifestyle, physical and mental health, financial well-being, practice management, technology, and more.

    Jaskiewicz’s appointment arose from a response he sent regarding a request for an article to be featured in Experience, the official publication of the ABA Senior Lawyers Division.

    The magazine’s main audience is senior attorneys specializing in any area of law. It publishes articles on topics of interest for these lawyers, along with those related to business planning and management, politics, history, culture, travel, health, and the arts. Each article offers practical advice to lawyers later in their careers or those who’ve retired or are semi-retired.

    Jaskiewicz’s submission will be featured in Experience’s October/November 2021 issue, focusing on the legal profession and lawyers post pandemic. The article will address what has changed in the profession, and how senior lawyers have been personally shaped by the experience.

    In addition to his appointment, Jaskiewicz was invited to participate in the ABA’s collection of 10 open committees.

    As a Member in the Corporate Law Department, Stanley P. Jaskiewicz assists and advises privately-held and family-held businesses on a wide range of legal matters, including contracts law, secured lending and negotiated acquisitions, Internet and technology law, business matters arising in the practice of medicine, corporate governance, intellectual property, regulatory counseling, fine arts law and foreign law. Mr. Jaskiewicz was elected by his peers as a Pennsylvania Super Lawyer for 16 consecutive years, 2006 through 2021, in the practice areas of Corporate/Securities Law, Closely Held Businesses and Mergers and Acquisitions. He has also received an AV Preeminent rating by Martindale-Hubbell, the highest rating.

    Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

    The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

    The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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    Judge Poslusny of the Bankruptcy Court for the District of New Jersey recently issued an opinion wherein he held that a Debtor may cure post-petition arrears in a modified Chapter 13 Plan as long as all other provisions of the Bankruptcy Code are met. Consistent with Section 1325, the Court held that the Amended Chapter 13 Plan was feasible and that the Debtor was able to make her newly proposed payments within the modified Chapter 13 Plan.
     
    Briefly, Debtor’s original Chapter 13 Plan was confirmed and she was making timely payments thereunder. Debtor was paying her pre-petition mortgage arrears within the Plan and post-petition mortgage payments outside of the Plan.  She then defaulted on her post-petition mortgage payments and the Lender filed a motion for relief from the automatic stay, which the parties resolved. Thereafter, Debtor again defaulted on her mortgage payments and a certification of default was filed by the Lender seeking relief from the stay provisions of 11 USC Section 363. That too was resolved. Upon the third post-confirmation default, the Lender again proceeded to seek relief. It should be noted that the defaults were mainly caused by Debtor’s husband’s unemployment and the economic ramifications of this circumstance on the family and related COVID-19 hurdles. Debtor filed a response to Lender’s relief motion incorporating these circumstances and asserted that she intended to make not only her pre-petition but also post-petition mortgage payments under a Modified Chapter 13 Plan seeking to incorporate the post-petition mortgage arrears in the Plan and extend the length of the Plan to 73 months.
     
    The Court addressed whether the requirements of Sections 1322(b)(5), 1325 and 1329(a) of the Bankruptcy Code were met. The Court, noting a split in the Circuits on this issue, found that Section 1322 allows for the curing post-petition arrears within a Plan. Further, the Court considered the terms of the CARES Act of 2020, which allows debtors who experience a “material hardship due, directly or indirectly” from COVID-19 to extend the length of a Chapter 13 Plan to up to 84 months. Here, Debtor met her burden to show her financial hardship and that the requested increase to a total of 73 months for the plan payments was within the purview of the CARES Act and was reasonable. In so finding, the Court determined that the Amended Chapter 13 Plan complied with the requirements of good faith, feasibility and reasonableness. Therefore, the Court confirmed the modified Chapter 13 Plan and denied the Lender’s motion for relief from the stay.
     
    I highly recommend reading this opinion (In Re Catherine E. Smith, BKY. Case No. 18-2383 – docket # 59) for the Court’s thoughtful analysis of this issue.

    To discuss this and other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin at 215-241-8926 or lbaskin@sgrvlaw.com.

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    Despite our progress on reducing infections and deaths from COVID-19, we still seem stuck with one aspect of the Pandemic: ever changing rules. (I wrote about 2020’s challenges at https://www.sgrvlaw.com/the-paycheck-protection-program-what-a-long-strange-trip-its-been/.)

    In today’s race to “get back to normal”, however, businesses again face the same frenetic pace of change – but now at the same time as they try to recover from the shutdown. In recent days, businesses and nonprofits had to digest new rules for schools (https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/index.html), employee safety (Federal Register :: Occupational Exposure to COVID-19; Emergency Temporary Standard), and, of course, the ever-changing mask mandates (Pennsylvania’s universal mask mandate lifts Monday, but businesses can still require them – Philadelphia Business Journal (bizjournals.com)), all in real time – and the list could go on.

    Businesses must also balance whether it is worth trying to get any of the massive amount of relief money that is still available (Small-business COVID-19 stimulus funds: What’s still available? (inquirer.com)), against the risk of criminal prosecution if the funds may later be deemed not “necessary”, with 20 – 20 hindsight.

    (That choice just became easier with the Small Business Administration’s abandonment of its “loan necessity” questionnaire.  SBA officially drops PPP Loan Necessity Questionnaire requirement – Journal of Accountancy)

    But all this talk about “normal” seems more than a bit surreal. After all, the virus is still here.  It is even surging in some parts of the country. People are still getting sick – and dying. Businesses must still devote time to try to keep up with all the rule changes. If all those burdens were not enough, PPP loan forgiveness deadlines are looming, albeit with promises of even easier procedures. SBA preps new PPP loan forgiveness portal for small businesses – Philadelphia Business Journal (bizjournals.com)

    Unlike in 2020, however, at a personal level we now have safe and effective vaccines to protect us – for those who choose to be vaccinated. Some are skeptical about their safety, and prefer to “wait and see” – or even to risk avoiding vaccination totally.  Moreover, many are not yet eligible for a shot.  Children, in particular, and those with compromised immunity (such as transplant recipients) remain at risk. (The tests leading to the vaccines’ approval did not include children, although trials are ongoing.)

    From an even broader perspective, there are not enough doses for much of the world. Calls for booster shots seem like first world privilege (https://en.wikipedia.org/wiki/First_World_privilege) to those who are still waiting for their first or second shot. And the vaccinated in the first world should care about this – quite a lot, actually. The virus doesn’t care where a potential victim lives.  A mutation in an unvaccinated person in Africa or South America could lead to an infection in the US or Europe that mutates to bypass the vaccines’ protection.

    In short, according to Yale infectious disease physician Dr. Jaimie Meyer:

    Even though we very much want this pandemic to be over … the fact that some people, including children, aren’t vaccinated means we’re still vulnerable. … While it might be exhausting to continue to take precautions, especially for unvaccinated kids, that becomes increasingly important.

    Looking ahead, therefore, businesses’ desire to be done with virus and virus precautions, and get back to business – will not simply “make it so”, despite all our progress so far (with apologies to Captain Jean-Luc Picard). Although skipping protections – eating out without a mask, or attending a concert – may be less risky today than it was in 2020, business compliance costs and burdens have not gone away.

    In the face of that reality, perhaps Nirvana’s “Feels Like Teen Spirit” offers a better soundtrack for 2021 than my high school anthem in the title of this alert: “I feel stupid and contagious.”

    Copyright 2021 Stanley P. Jaskiewicz, Esquire

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