Commercial Banking, Collections, and Bankruptcy

The Unsecured Creditors Committee of Sparrer Sausage, Inc. v. Jason’s Foods Inc.

Federal 7th Circuit Court
The Unsecured Creditors Committee of Sparrer Sausage, Inc. v. Jason’s Foods Inc.
Civil Court
Bankruptcy
Citation
Case Number: 
No. 15-2356
Decision Date: 
June 10, 2016
Federal District: 
N.D. Ill., E. Div.
Holding: 
Reversed and remanded

In Chapter 11 bankruptcy proceeding, Bankruptcy Ct. erred in finding that certain preferential payments made by debtor to creditor did not qualify for exception under 11 USC 547(c)(2) as payments made in ordinary course of business. While Bankruptcy Ct found that debtor had generally paid invoices to creditor within 16 to 28 days, and thus payments made prior to after said period did not qualify for said exception, Bankruptcy Ct. erred in finding that payments made more than 6 days before and after 22-day average period for payment of invoices did not qualify for said exception, where instant 16-to-28 day baseline range encompassed just 64% of invoices paid during relevant historical period. As such, only two payments, made 37 and 38 days after invoice was issued, were beyond properly calculated baseline range, and thus only such payments were subject to preference liability. However, creditor was subject to no liability, where record showed that after it had received said preference payments, it advanced debtor additional unsecured credit that had remained unpaid.

House Bill 4715

Topic: 
FOIA

(Bryant, R-Mt. Vernon; Radogno, R-Lemont) provides that a requester that files an action seeking to enforce a binding opinion will have a rebuttable presumption that the public body willfully and intentionally failed to comply with this Act if: the attorney general issues a binding opinion under § 9.5 and the public body does not file for administrative review nor comply with it within 35 days after the binding opinion is served on the public body. This presumption may be rebutted by the public body showing that it is making a good-faith effort to comply with the binding opinion, but the compliance was not possible within the 35-day time frame. This section applies to binding opinions of the attorney general requested or issued on or after January 1, 2017.

It also allows the court to impose an additional penalty of up to $1,000 for each day the violation continues if: the public body fails to comply with the court’s order after 30 days; the court’s order is not appealed or stayed; and the court does not grant the public body additional time to comply with a court order to disclose public records. Changes apply to actions filed on or after January 1, 2017.

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Senate Bill 2845

Topic: 
Supplementary proceedings

(Silverstein, D-Chicago; Lang, D-Skokie) makes the following changes to supplementary proceedings: (1) Clarifies that a petition to revive a judgment must served and an order entered for a judgment to be revived. (2) Requires the amount of the bond to be posted after an entry of an order of prejudgment attachment against the property of a debtor who may conceal property or flee the state. (3) Makes taxable as court costs of all charges relating to the electronic filing of cases and pleadings. (4) Under current law, a court must vacate a judgment and dismiss the action when a release or full satisfaction for judgment is filed by the prevailing party. This provides that a judge may do so. (5) Eliminates the sheriff’s levy sale of corporate stock as superseded by the Uninform Commercial Code or a citation to discover assets statute. Passed both chambers. 

 

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House Bill 4648

Topic: 
Fiduciary access to digital assets

(Welch, D-Westchester; Connelly, R-Lisle) creates the Revised Uniform Fiduciary Access to Digital Assets Act (2015). This is a big bill for transactional and estate-planning lawyers, and it has an immediate effective date so that it becomes law if and when the Governor signs it. House Bill 4648 provides procedures and requirements for the access and control by guardians, executors, agents, and other fiduciaries of the digital assets of persons who are deceased, under a legal disability, or subject to the terms of a trust. Passed both chambers

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Senate Bill 3162

Topic: 
E-business filing fee

(Harmon, D-Oak Park; Cassidy, D-Chicago) requires circuit court clerks to collect a $9 “e-business” fee against all civil litigants. Exempts motions for change of venue and appeals from administrative agencies. After January 1, 2022 the law-library filing fee of $21 is reduced to $20 and the children's waiting room fee of $10 is reduced to $8. After January 1, 2022 the ceiling that the county board may not exceed for a civil filing fee is reduced by $6 for all counties. Passed both chambers. 

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PSI Resources, LLC v. MB Financial Bank

PSI Resources, LLC v. MB Financial Bank
Illinois Appellate Court
Civil Court
Uniform Commercial Code
Citation
Case Number: 
2016 IL App (1st) 152204
Decision Date: 
Friday, May 27, 2016
District: 
1st Dist.
Division/County: 
Cook Co., 5th Div.
Holding: 
Affirmed.
Justice: 
GORDON

Plaintiff filed breach of contract action against Defendant bank. Court properly dismissed suit as time-barred under 3-year statute of limitations in Section 4-111 of UCC. Ten-year period of statute of limitation for written contracts does not apply as it would not further purposes of UCC or promote commercial finality and certainty. Three-year limitations period applies as claim involved banking transactions involving negotiable instruments, an  area of law specifically regulated by UCC.Discovery rule does not apply, as monthly account statements provided by Defendant provided sufficient information for Plaintiff to be put on notice that wrongful conduct had occurred.(REYES and LAMPKIN, concurring.)

Walker v. Trailer Transit, Inc.

Federal 7th Circuit Court
Walker v. Trailer Transit, Inc.
Civil Court
Contract
Citation
Case Number: 
No. 15-1482
Decision Date: 
June 1, 2016
Federal District: 
S.D. Ind., Indianapolis Div.
Holding: 
Affirmed

Dist. Ct. did not err in entering judgment in favor of defendant-trucking company in class action by plaintiffs-truck drivers, alleging that defendant breached contract, which called for payment of 71% of gross revenue that defendant received from customers for use of plaintiffs' trucking equipment, where defendant failed to pay plaintiffs 71% of net revenue that defendant received for “special services” billed to its customers. Instant contract failed to contain any provision calling for payment of 71% of net revenue for anything, and “special services” was item that was expressly excluded from calculation of what was owed to plaintiffs. Ct. rejected plaintiff’s argument that instant exclusion contemplated only those special services that defendant provided to customers at cost.

House Bill 4715

Topic: 
FOIA

(Bryant, R-Mt. Vernon; Radogno, R-Lemont) allows a person denied access to public records to file an action to enforce a binding opinion issued under section 9.5 of this Act.

It allows the court to impose an additional penalty of up to $1,000 for each day the violation continues if: the public body fails to comply with the court’s order after 30 days; the court’s order is not appealed or stayed; and the court does not grant the public body additional time to comply with a court order to disclose public records. Changes apply to actions filed on or after January 1, 2016.

A requester that files an action seeking to enforce a binding opinion will have a rebuttable presumption that the public body willfully and intentionally failed to comply with this Act if: the attorney general issues a binding opinion under section 9.5; the public body does not file for administrative review within 35 days after the binding opinion is served on the public body; and the public body does not comply with the binding opinion within 35 days after it is served on the public body.

This presumption may be rebutted by the public body showing that it is making a good-faith effort to comply with the binding opinion, but the compliance was not possible within the 35-day time frame.  This section applies to binding opinions of the attorney general requested or issued on or after January 1, 2016.

It has passed the Senate and back in the House for concurrence of Senate amendments. 

 

 

 

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St. John v. Cach, LLC

Federal 7th Circuit Court
St. John v. Cach, LLC
Civil Court
Fair Debt Collection Practices Act
Citation
Case Number: 
Nos. 14-2760 et al. Cons.
Decision Date: 
May 19, 2016
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiffs’ complaints alleging that defendants-debt collectors violated section 1692e(5) of FDCPA, which prohibits debt collectors from threatening to take action that they do not intend to take in course of collecting debt, where defendants filed collection lawsuits that were later voluntarily dismissed without prejudice prior to going to trial. Although plaintiffs argued that conduct of defendants indicted that they never intended to proceed to trial, and thus violated section 1692e(5), plaintiffs had failed to allege that defendants did not intend to proceed to trial at time when they filed underlying collection actions. Moreover, because mere filing of collection actions does not include implicit declaration that defendants intended to advance action all way through to trial, plaintiffs failed to show that defendants ever threatened to take collection actions to trial. Also, debt collectors are free to engage in customary cost benefit analysis when considering how far to advance litigation.