Tag Archives: Bankruptcy law

Average Joe SCOTUS: Rodriguez v. Federal Deposit Insurance Corp.

So, this shitty ass bank, United Western Bancorp, Inc. (UWBI) had several subsidiaries, including United Western Bank. They apparently sucked at what they did, because they were losing money like they stored it in a toilet that just kept getting flushed.

Anyway, when you own several companies as a parent company, you can file one big ass tax form each year for the parent company instead of a bunch of little forms for each of your subsidiaries, so that’s what these assholes did.

Well, one of their branches United Western Bank (UWB) lost so much damn money, they qualified for a $4,000,000 tax refund. So the parent UWBI was like, “gimme that money, bitches.” Rodriguez, they’re Chapter 7 attorney, and the petitioner here, filed one big ass return for all of UWBI, claiming the losses of UWB, and getting that big ass refund as a result.

However, the FDIC had closed down UWB (the subsidiary), and took them into receivership because they were the shittiest bank that ever banked.  Now UWBI (the parent) was told that the FDIC was taking UWBI’s refund, because they argued it went to UWB since they were the source of the loss, and therefore the FDIC would use that money to pay its debtors.

But UWBI was like, “Fuck you, you government pricks. We need that money.” So one court agreed, another court didn’t, as is usual. And eventually, these assholes found their way to SCOTUS.

In 1973, the courts had ruled on a previous case where they decided that a refund of this nature, absent any other agreement, belonged to the parent company. They call this the Bob Richards rule, because that’s the case it was named after in 1973.

But the FDIC is arguing that they did have an agreement between the subsidiary and the parent, and therefore the Bob Richards rule does not apply.

You can read about the case and hear oral arguments here.

Also, a pretty detailed analysis here and here.

So SCOTUS is now being asked whether state law or federal law determine who gets a tax refund. Because state law would mean Rodriguez wins. SCOTUS being keen on state’s rights determined that the state can and should handle this shit, and unanimously decided for Rodriguez, telling the FDIC to go eat a bag of dicks.

Average Joe SCOTUS: Ritzen Group Inc. v. Jackson Masonry LLC.

Ritzen Group was trying to buy a piece of property from these deadbeats at Jackson Masonry. But then at the last moment, Jackson sent over some bullshit paperwork that caused Ritzen to have to pull out of the deal. Jackson was shit at their finances, and ended up filing for bankruptcy. So clearly, they were trying to pull something over on Ritzen in selling the property.

So Ritzen sued Jackson for breech of contract, but then Jackson was like, “Oh you’re gonna sue us asshole? We’ll sue you!” And so they did—claiming Ritzen entered into the deal when they didn’t have the money to actually buy the property, and thus were themselves in breech of contract.

So then the deadbeats at Jackson, having filed for bankruptcy, sought protection from Ritzen’s lawsuit, which is what bankruptcy does, among other things. But Ritzen filed a motion to lift the protection against Jackson, and were denied. So Ritzen sued the bankruptcy estate, and they ruled in favor of Jackson, saying that Ritzen’s failure to secure financing for the property was the breech of contract, not Jackson’s bullshit paperwork.

So Ritzen, having been fucked every step of the way, appealed yet again in district court, both appeals were denied. One denied because the courts said Ritzen didn’t appeal in time. The other, they just didn’t think Ritzen proved it’s argument worth a shit.

So now we’re at SCOTUS trying to figure out if the denial of relief for Ritzen are considered a final order, which affects how long Ritzen had to file its appeal. Because there’s steps in the process, and in order to file appeal, you first have to have a final order, otherwise you’re appealing before it’s been decided.

Unanimous decision for Jackson. Once a bankruptcy court has denied relief to the creditor, it is a final decision and therefore open for appeals, which means Jackson waited too damn long.

Average Joe SCOTUS: Taggart v. Lorenzen

Holy fuck! This case has more twists and turns than a Hillary Clinton campaign position.

So this dude Taggart, (The petitioner here) owned 25% of a real estate company. But Taggart sucked with money and investing, was feeling kinda broke, and decided to sell his share to his attorney to get himself some scratch.

However, Terry Emmert and Keith Jehnke also owned 25% each, and they were represented by a Stuart Brown, who was then represented by Shelley Lorenzen (The respondent in the case). My head already fucking hurts from this shit.

Anyway, Emmert and Jehnke thought Taggart selling to his attorney instead of them, was a total dick move, and sued his ass. They won, and Taggart was booted from his own fucking company, with the shares being sold to Emmert and Jehnke. The courts also ruled that Emmert and Jehnke’s attorney could sue for attorney’s fees, so of course he totally did.

Taggart was all like, “Fuck you, I’m filing for bankruptcy.” Which means, his creditors are supposed to go to the bankruptcy proceedings if they want money from him. After that, it’s Hands-Fucking-Off. That’s why it’s called bankruptcy “protection.”

Anyway, this deadbeat Taggart was awarded his bankruptcy, but Brown, the attorney for the two assholes who were trying to squeeze blood from a turnip, decided to sue Taggart anyway, for legal fees, as mentioned earlier, after he got his bankruptcy. Their argument was that Taggart had “returned to the fray” and therefore didn’t deserve protection.

So now Taggart is suing Brown (Lorenzen) for contempt saying, “Hey, those motherfuckers knew I was in bankruptcy, and came after me for money anyway. But Brown (Lorenzen) were like, we thought it was Saul Goodman (Slang for “It’s all good, man”). We didn’t know we couldn’t come after him. We thought he “returned to the fray.”

So 97 different fucking courts weighed in on this shit before it finally got to SCOTUS who were asked to decide if someone in bankruptcy protection can sue someone who comes after them after the bankruptcy, if they thought in good faith, it was OK to sue for that.

SCOTUS unanimously thought Lorenzen, Brown, Emmert, and Jehnke were the bigger assholes in all of this. They fucking knew better, and did it anyway. Judgement for Taggart.

Average Joe SCOTUS – Mission Product Holdings Inc. v. Tempnology LLC.

These people at Tempnology made some clothing and shit meant for people doing physical activities, that helped keep the wearer cooler. Not cooler like Chuck Norris, but cooler like the other side of the pillow.

Mission Product agreed to sell their product, so they had rights to the sell the product, deploy the technology in their own products, and to use Tempnology’s trademarks, logos, and shit.

Tempnology however sucked at business, and ran up operating costs to the point where they had to file bankruptcy. As a result, they sought to rescind their contract with Mission because of the financial strain that contract put on them. Basically, they wanted more money than the contract entitled them to.

Mission was like, “WTF, man? We have a deal, bitch!”

Tempnology was like, “Bankruptcy, motherfucker. Have you heard of it? Fuck you, and your contract too!”

Mission was then like, “Your inability to run your god damn company doesn’t mean that we should lose money, not being able to exploit the contract we have with you. You gave your word, douchebag!”

I assume Mission were using Tempnology’s technology in their own products where Tempnology wasn’t making much money off of it, because they weren’t making it themselves. But I’m guessing, so don’t quote me on that shit.

We all know bankruptcy puts a hold on debtors, but it also allows for the potential rejection of what the case referred to as executory contracts, which are basically contracts still in effect and not completed (or fully executed).

SCOTUS didn’t feel sorry for Tempnology at all, though. They were luck, “Screw your bankruptcy. Mission can keep exploiting your technology because you all had an agreement. You don’t get to reject that agreement entirely because you hired a shitty accountant or something.”

Judgement for Mission Holding 8:1. Gorsuch dissented, not even seeing how Mission was being unfairly damaged here. Maybe the other eight can explain it to him.

Read about the case or hear oral arguments here.