Wednesday, January 12, 2022

The Truth About Bankruptcy: Debunking Five Common Myths, by Ethan D. Ganc, Esq.

Myth # 1: A company that files for bankruptcy is going out of business.

The fact that a company has filed for bankruptcy protection does not mean it is necessarily going out of business or ceasing operations. In fact, companies that just need some breathing space but have the prospect of rehabilitation can file for protection under Chapter 11, which is a reorganization proceeding. In very broad terms, Chapter 11 enables companies to continue their operations, address their outstanding debt, shed burdensome leases and other contracts, and reemerge at the end of the bankruptcy process. Alternatively, some companies use the Chapter 11 process to sell their assets as a going concern, which enables the buyer to continue to operate the same business under new ownership.  

 

Myth # 2: The best way to deal with a failed business is to file for Chapter 7.


In contrast to Chapter 11, Chapter 7 is a liquidation proceeding where the company that files for bankruptcy protection ceases operations. Chapter 7 may be an appropriate option for a business that has significant assets available for liquidation; however, Chapter 7 is rarely a good choice for a failed business that has few or no assets of value. Unlike an individual, a business that files for Chapter 7 does not receive a discharge (forgiveness) of its debts. More importantly, particularly for a closely held business, filing for Chapter 7 may result in unwanted scrutiny by the bankruptcy trustee (a third party appointed to marshal and liquidate assets) of the business owners’ compensation and other financial transactions with the company, which could result in an attempt by the trustee to recover payments made by the company to the business owners prior to the bankruptcy filing.

 

Myth # 3: A business or individual must be insolvent (i.e., its debts must exceed its liabilities) in order to be eligible to file for bankruptcy.


There is no requirement in any section of the Bankruptcy Code that a debtor (the company or individual that files for bankruptcy) be insolvent. In fact, it is not infrequently the case that debtors, both corporate and individual, have assets that exceed their liabilities. Businesses may have assets that exceed liabilities but may still benefit from filing for bankruptcy because it allows them to restructure certain debts and shed burdensome lease obligations and other contracts while continuing to operate as a going concern. As explained in the next section, because individuals who file for bankruptcy can exempt certain property from the reach of creditors, those individuals may have assets that exceed their liabilities but still be able to discharge certain debts by means of a bankruptcy filing.

 

Myth # 4: An individual who files for bankruptcy will lose all of his/her assets.


Both state and federal laws protect certain assets from the reach of creditors. These assets are called exempt assets. A few limited examples of exempt assets include federally qualified retirement accounts like 401(k)s, most ordinary household goods and furniture, some amount of equity in a home (this varies from state to state and under federal law), and some amount of equity in a car (this also varies). Exemptions allow a person to file for bankruptcy protection and still discharge his/her debts while keeping the exempt property.

 

Myth # 5: Personal income taxes are never dischargeable by an individual debtor in bankruptcy.


While personal income taxes of newer vintage are not discharged (forgiven) in bankruptcy, some income taxes that are older may be dischargeable. Generally speaking, if a specific tax return was last due more than three years before the bankruptcy filing, the return was filed more than two years before the filing, and there are no additional assessments relating to that tax year that occurred less than 240 days before the filing, the taxes for that year may be dischargeable.

 

If you have any questions about these or any other legal matters, please do not hesitate to contact TLA past-president, Ethan Ganc, Esq.

Ethan Ganc maintains a practice in New York City, where he serves clients in the areas of bankruptcy/creditors rights, business law, and commercial litigation, among others. Ethan was president of the TLA from 2014 to 2018, vice president from 2012 to 2014, and served on its board of directors from 2010 to 2017.

Thursday, January 6, 2022

TLA Opt-In 2022 Directory Is Updated!

TLA's Opt-In 2022 Directory now has 225 members!  Up by 75 new members since last year!

This directory of Tufts Lawyers is a great opportunity for referrals and collaboration.  We have a diverse group of TLA members from various practice areas and regions.  

Visit the TLA Opt-In 2022 Directory and, if you are not on it, please feel free to join.  Thanks to TLA Member, Dan Valentine for putting the directory together from the google form.  Here is a sample from the start of the directory:

If you want to learn more about the TLA, please contact me.

Tom Dunn, A00, TLA President
Pierce Atwood LLP
rtdunn@PierceAtwood.com

Wednesday, December 22, 2021

Lessons Learned from Law School: A Welcome to the Tufts Lawyers Association (TLA) Law Student Group (January 26, 2022 8-9PM ET)

Join us for an event that will feature a panel of Tufts alumni in the legal profession. Our panelists will explore their most interesting experiences, successes, mistakes, and lessons learned from their time in law school as part of a conversational and interactive platform.

This virtual event will be open to Tufts alumni in law school, current Tufts students, and any other alumni who wish to take part in a great chance to connect with current Tufts law students and other Tufts alumni!

The Law Student Group of the Tufts Lawyers Association is honored to welcome the following featured panelists:

· Newton Portorreal, A16, Judicial Law Clerk, U.S. Court of Appeals for the Third Circuit 

· Graham Rogers, A10, Associate, Gunderson Dettmer

· Jiabin Zhang, A16, Associate, Fragomen



REGISTER HERE

If you missed our Tufts Judicial Series with Hon. R. Guy Cole, Jr. -- watch it here!

Thursday, December 2, 2021

Recap of Tufts Lawyers Series Event with Judge R. Guy Cole, by Tom Dunn, TLA President

Serving as a champion of justice, mentorship, and collegiality are themes that resonated from the discussion Steve Wermiel and I had with Judge Cole on December 1, 2021 during the 6th Tufts Judicial Series event.  

He explained the importance of his upbringing in Birmingham, Alabama, living in a neighborhood that experienced bombings and other injustice.  He explained that Martin Luther King, Jr. would routinely stay at a house a few doors down when he was in town and how those years through his first year at Tufts (1968) challenged him and the country as a whole to pursue justice and equality.  

Having family members in the medical industry, Judge Cole aimed at a pre-med degree at Tufts, but then decided to gravitate more towards the law.  From his time at Tufts through law school and his professional practice at the largest law firm in Columbus, Ohio (the firm's first African American partner), working at the Department of Justice, his service as a Bankruptcy Judge, and finally his 26-year tenure on the 6th Circuit, Judge Cole stated that his has always had a desire for public service.  

Judge Cole explained his accomplishments in enhancing and fostering collegiality as the Chief Judge of the 6th Circuit often through simple things as getting the Judges together prior to en banc arguments, at retreats or other functions.   He explained the deliberations process between panel members and the process by which the opinions are developed.  He expressed his views on creating awareness about judicial appointments, the role of politics in judicial appointments, and the independence of the judiciary.

He explained that his 100+ law clerks are more than just mentees, they are like his kids in many ways.  He stays in touch with them throughout their careers and finds that the clerkship relationships is one of the most rewarding aspects of his job.  

As far as advice for the next generation of Tufts Lawyers, Judge Cole emphasized patience.  He said that you don't need to have your whole career mapped out and then stick to it.  You may have bosses or jobs that don't work and that is normal.  Continue to do your best and achieve your goals.  

Thanks Judge Cole for spending time with us.  It was a great discussion and we were so honored to have you join us.  

 ***

R. Thomas Dunn is the head of the construction group and the partner in charge of the Providence, Rhode Island office of Pierce Atwood, LLP.  He practices construction law and commercial/business litigation in Rhode Island and Massachusetts.  Tom is the President of the Tufts Lawyers Association.  If you want to learn more about the TLA, please contact Tom at rtdunn@PierceAtwood.com.

Recording Available for Jumbo Lawyers Around the World: Practicing Abroad as an American Lawyer

Did you ever wonder what it was like to practice law abroad?  If that is your career goal, or if you want to hear from top-notch Tufts Alumni Attorneys practicing outside of the United States, watch this TLA program from October 26, 2021.  

Many thanks to TLA Member, Daniel Mandell, for coordinating this program and all of our fabulous speakers shown below:



For more information about TLA, please contact TLA President, Tom Dunn at rtdunn@PierceAtwood.com.  

Monday, November 29, 2021

Tufts Judicial Series Event -- Hon. R. Guy Cole, A72, US Circuit Judge of the United States Court of Appeals, 6th Circuit

We are honored and excited that our last Tufts Judicial Series of 2021 will feature Judge Ransey Guy Cole Jr. on Wednesday, December 1, 2021.  

REGISTER HERE

Judge Cole was nominated by President Clinton and unanimously confirmed by the U.S. Senate in 1995 to a judgeship on the United State Court of Appeals for the Sixth Circuit, which hears all federal appeals from the States of Ohio, Michigan, Kentucky, and Tennessee. In August 2014, Judge Cole assumed the role of Chief Judge for the Sixth Circuit—becoming the first African American to hold that position since the court’s formation in 1869-until April 2021. During his twenty-six years on the appellate bench, Judge Cole has authored hundreds of legal opinions, including landmark decisions on civil rights, criminal procedure, and the scope of the First Amendment, among others.  Judge Cole lives in Columbus, Ohio with his family.

The program will be a "fireside chat" with Judge Cole led by Judge Cole's classmate, Stephen Wermiel, A72 (Professor at American University) and Tom Dunn, A00 (Pierce Atwood LLP and TLA President). We will also have some time for general discussion and networking at the conclusion of the program.