Fifty Ways to Leave Your Debtor: Lesser-Known Remedies for Jilted Creditors
by: Bruce S. Nathan
Lowenstein Sandler PC; New York
Setoff is based on the notion that if one or both parties is owed money, he or she should be able to avoid having to pay his or her debt prior to collecting his or her claim. The right of setoff is an efficient method for settling debts where the parties can reduce their obligations to each other by setting off one claim against another. The Bankruptcy Code does not grant setoff rights per se; state law governs the creditor’s right of setoff. See Citizens Bank v. Strumpf, 516 U.S. 16 (1995). Section 553 of the Code acknowledges that a creditor has the right of setoff under state law and merely preserves setoff rights. Section 553 also establishes limits on a creditor’s ability to exercise its setoff rights.
Read the full article. (Materials from the 2007 Annual Spring Meeting)
Minutes from the 2007 Annual Spring Meeting
The joint meeting of the Unsecured Trade Creditors Committee and the Young & New Members Committee was held on Saturday, April 14, 2007, at 4:00 p.m. The UTCC initially held a brief business meeting to discuss the development of a task force to review and summarize UCC Article 2 remedies available to unsecured creditors, as well as other potential remedies, such as state law lien/trust fund remedies and common law remedies such as setoff and recoupment. Anyone interested in becoming a part of this “Remedies Task Force” should contact Co-Chair Deborah Thorne. Also discussed in the business portion of the meeting was the committee’s ongoing projects. The committee will meet for lunch on Dec. 6 at noon during the 2007 Winter Leadership Conference to network and discuss ongoing projects. Finally, the outgoing co-chairs, Bruce Nathan and Doug Fox, were thanked for their valuable service over the years, and the incoming co-chairs, Jean Robertson and Val Venable, were introduced.
In addition, Debbie Thorne, Bruce Nathan and Brian Shaw led an informal discussion concerning lesser-known remedies for unsecured creditors. Issues such as setoff and recoupment, statutory and common law liens, joint check agreements and various UCC Article 2 remedies were discussed.