Happy Holidays and Warm Wishes for 2021
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This holiday season we wish you good health, hope, prosperity and success. Click to view in English, Spanish and Portuguese.
The International Women’s Insolvency and Restructuring Confederation (IWIRC) will have its first Hispanic chair come 1 January, as a Dutch firm hires from Loyens & Loeff, and Vinson & Elkins and Cooley promote in New York.
Leyza Blanco, a shareholder at Miami-based cross-border insolvency and asset recovery boutique Sequor Law, will become the first Hispanic chair of IWIRC’s board at the start of next year, after serving as vice-chair in 2020 under the outgoing chair, PwC partner Michelle Pickett in Ontario.
Blanco’s new vice-chair is Lowenstein Sandler counsel Jennifer Kimble in New York, who is currently IWIRC’s secretary. Kimble will be replaced in the secretary role by Boston-based Marjorie Kaufman of management consulting firm Getzler Henrich & Associates, who is currently finance director.
The current vice finance director, Karen Fellowes QC at Stikeman Elliott in Vancouver, will also now graduate into the directors’ role, while a new member of IWIRC’s executive board, Troutman Pepper partner Evelyn Meltzer in Wilmington, Delaware, will be appointed vice finance director.
Fellowes joined Stikeman Elliott in July from DLA Piper, and is a former winner of IWIRC’s Fetner Award, which is given each year to an outstanding international member.
Blanco – herself an IWIRC founders award-winner in 2019 – said she was “honoured” to have been named IWIRC’s next chair. “I will be a steward to the IWIRC mission and continue to make IWIRC accessible to everyone, increasing diversity and helping our worldwide members connect and forge productive relationships,” she said.
In an inaugural speech delivered on 15 December at a hybrid in-person and virtual event for IWIRC’s 2020 Rising Star Award – an honour presented to Sequor Law attorney Nyana Miller, who is the first Latin America regional chair on IWIRC’s international board – Blanco said the chaos of this pandemic year had actually delivered “a silver-lining” in the form of online events.
She jokingly thanked covid-19 for uncovering “this extra arrow in our quiver” and pledged to use virtual events to drive focus on inclusion, labelling them “an invaluable tool to help us in our mission – to connect women worldwide”.
Speaking to GRR, Blanco notes that the past three years have seen IWIRC add Brazil, Latin America and Korea networks to its ranks, and that it is her ambition to work on expanding the European network and developing new networks during her time as chair.
“Efforts are already in the works for the development of networks in New Zealand, Ireland, Dubai, South Africa and Pacific Northwest,” Blanco says.
“It is my hope that women from across the globe who are not already represented in an IWIRC network will have a network to join and participate with IWIRC in the promotion of women in the insolvency field worldwide,” she adds, noting that anyone interested in joining or forming a new IWIRC network is welcome to get in touch with her directly.
Blanco joined Sequor law in mid-2018 from GrayRobinson in Miami, alongside another shareholder, Fernando Menendez. She regularly works on international litigation and insolvency matters relating to the US and Latin America, especially Chapter 15 recognition cases.
In November, she asked the US Bankruptcy Court for the Southern District of Florida to recognise the most recent liquidator of Ukrainian bank PJSC Bank Finance and Credit, following a series of different appointments in the wake of the bank’s licence being revoked in 2015.
She is also the regular author of GRR’s asset recovery column.
by Cristina Vicens, Sequor Law, P.A., Miami, Florida
What emergency measures in insolvency or restructuring legislation has the United States adopted to help businesses cope with the economic crisis caused by the COVID-19 pandemic?
In March 2020, the U.S. Congress swiftly passed a series of stimulus packages to help stabilise the economy after COVID-19 forced many businesses to shut down and caused millions of Americans to become unemployed. The third (and latest) of these stimulus packages, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act; P.L. 116-136), was a US$2 trillion stimulus packages passed on 25 March 2020. The CARES Act directs financial assistance to individual tax payers, expands unemployment benefits to persons that normally would not have qualified for unemployment benefits, provides for federal grants, loans, and other assistance for small businesses and other businesses disproportionately affected by the COVID-19 pandemic, and establishes a US$150 billion Coronavirus Relief Fund to make payments to states, tribal governments, and local governments as they respond to the public health emergency.
Specifically, with regard to insolvency or restructuring legislation adopted to help businesses cope with the economic crisis, the CARES Act provides for several amendments to the U.S. Bankruptcy Code. First, it increases the debt ceiling for businesses to be eligible to file under the small business provisions of Chapter 11 of the Bankruptcy Code from US$2,725,625 to US$ 7,500,000. The Small Business Reorganisation Act (“SBRA”), which took effect on 19 February 2020, just a few weeks before the national shutdown, provides a streamlined path through Chapter 11 for small business debtors. This increased threshold will potentially allow more businesses with access to the SBRA to survive. After one year, however, the debt ceiling increase reverts to US$2,725,625. Second, for a period of one year, the CARES Act amends the definition of “income” under Chapters 7 and 13 to exclude COVID-19 related payments from the federal government. Third, applicable to individuals rather than businesses, it clarifies that the calculation of disposable income under Chapter 13 does not include COVID-19 related payments; and, lastly, permits individuals and families in Chapter 13 proceedings to seek payment plan modifications in response to COVID-19 related financial hardship, including extending payments for up to seven years after their initial payment was due.
In addition, the CARES Act provides the authority to the Administrator of the U.S. Small Business Administration (“SBA”) to make loans under the Paycheck Protection Program (“PPP”) through the commercial banking market. The PPP is designed to provide a direct incentive for small businesses to keep their employees on the payroll and allows loans to be forgiven if all employees of a business are kept on the payroll for eight weeks and the loan proceeds are used for payroll, rent, mortgage interest, or utilities. While the CARES Act does not prohibit PPP loans or grants to be provided to Chapter 11 debtors, the SBA has taken the position that it does, creating uncertainty for companies operating under Chapter 11 protection and leading to litigation. [See Perspectives on COVID-19 Relief Funding and the Reopening of America, ABI Journal, July 2020, at 8.]
Further, small business owners are able to apply for Economic Injury Disaster Loans (“EIDL”) and receive an advance of up to US$10,000, designed to provide economic relief to businesses that are experiencing a temporary loss of revenue. Relevantly, the loan advance does not have to be repaid and recipients do not have to be approved for the loan in order to receive the Emergency Measures in Insolvency Legislation in Response to the COVID-19 Crisis AIJA Insolvency Commission 2020 68 advance. Contrary to the PPP loans, the SBA administers the EIDL program directly and not through the commercial banking market.
Click here to read the full summary (page 67).
By Amanda E. Finley, Miami
The European Union implemented the General Data Protection Regulation (GDPR), and it became effective on 25 May 2018.1 The GDPR enforces privacy requirements to protect EU citizens.2 “The GDPR applies to the processing of ‘personal data,’ which is defined as any information related to an ‘identified or identifiable natural person,’” who can be directly or indirectly identified by the data produced.3 The GDPR purports to have extraterritorial effect by applying “regardless whether the processing takes place in the EU or elsewhere.”4 The GDPR allows imposition of penalties and sanctions that “significantly increase[d] the maximum fine to €20 million, or 4% of annual worldwide turnover, whichever is greater.”5 Further, “[t]he GDPR provides an individual with access to the courts to seek a judicial remedy” in addition to any administrative remedy.6 Essentially, any production of documents that contain information about EU citizens could cause serious consequences and large fines for a GDPR violation.
The early cases in the United States suggest that the GDPR may have a profound impact on discovery in the United States. The GDPR may provide for targets subject to the jurisdiction of courts in the United States to object to discovery with the purpose (or possibly under the guise) of protecting EU citizens’ privacy. Defendants may object to production as a whole, request significant redaction of the discovery, request a strict confidentiality agreement, request to produce anonymized data that does not identify any EU citizen, or any combination thereof. There is limited case law on the implications of the GDPR on U.S. discovery because it is a relatively new regulation. So far, U.S. courts have taken divergent approaches on how to address and resolve objections to discovery based on the GDPR. Overall, it appears that most courts are allowing production of the discovery in some form, over a defendant’s GDPR objection.
U.S. Courts’ Historical Response to Discovery Objections Based on Foreign Privacy Statutes or Secrecy Laws
Historically, U.S. courts have been unwilling to allow a foreign privacy statute to preclude the production of responsive documents that were otherwise discoverable in U.S. litigation. As the Supreme Court stated, “[i]t is well settled that such statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute.”7 The Court further noted that the French “blocking statute” was “originally ‘inspired to impede enforcement of United States antitrust laws,’ and that it did not appear to have been strictly enforced in France,” which further undercut U.S. courts’ interest in enforcing that foreign privacy statute over the American interest of full disclosure in discovery.8 Prior and subsequent courts similarly ruled that foreign privacy statutes are not dispositive on production of discovery in U.S. cases, although the statutes may be relevant to the issue of whether sanctions should be imposed for failure to comply with U.S. discovery orders.9 Likewise, U.S. courts deemed foreign bank secrecy laws insufficient to preclude discovery in U.S. litigation.10 Therefore, generally, courts in the United States overwhelmingly have held that full disclosure in discovery outweighs any interest in enforcing foreign privacy or secrecy laws.
A Chronological Review of U.S. Courts’ Approaches to GDPR Discovery Disputes and Other Foreign Privacy Statutes
On 5 October 2018, the first published ruling on GDPR in U.S. litigation involved a defendant, Microsoft, raising a GDPR objection to discovery based on the undue burden and cost of producing the discovery due to “the alleged tension with GDPR.”11 The court did not significantly analyze the GDPR issue, but stated that “the court [wa]s not persuaded by Microsoft’s arguments concerning undue burden” and required the production of documents.12
On 17 December 2018, the first substantive ruling by a U.S. court to address an objection to discovery based on GDPR was in the context of a 28 U.S.C. § 1782 application to obtain discovery for use in a foreign proceeding.13 The court “grant[ed] the application with respect to documents held by foreign custodians only to the extent that the Applicants (1) assume the costs of the document production, including the costs of compliance with the GDPR or other applicable European data privacy laws and (2) indemnify Respondents against any potential breaches of European data privacy laws.”14 Although the court granted production of the documents over the GDPR objection, this ruling has serious adverse consequences for parties seeking discovery in U.S. litigation if the GDPR is implicated because it required unknown and potentially multimillion-dollar indemnification liability on the party receiving the documents.
The approach in Hansainvest of requiring indemnification of the discovery target “against any potential breaches of European data privacy laws” is a serious deterrent to any party seeking discovery.15 It would be unusual and highly unlikely that any party would knowingly accept such an open-ended and potentially large financial risk given the large fines for a GDPR violation. If courts routinely adopted this approach, it would have a significant chilling effect on U.S. discovery when the GDPR is implicated. Hansainvest is the only U.S. court, thus far, to rule that indemnification of any GDPR liability is a condition precedent to production of the documents. In later rulings, U.S. courts have taken less drastic approaches to GDPR objections to discovery.
Click here to read the full article in the Spring 2020 International Law Quarterly (page 16) and the Business Law Section.
Stanardsville, VA – December 3, 2020 – The International Women’s Insolvency and Restructuring Confederation (IWIRC), the premier international, networking, and professional growth organization for women in the restructuring and insolvency industry, recently announced its 2021 Board of Directors. Carrianne Basler (AlixPartners, Chicago), Past Chair and Chair of the 2021 Nomination Committee announced that “This year’s process highlighted the incredible breadth of talent in our membership and their fervent dedication to IWIRC worldwide. We are delighted to present the composition of this new Board that will be leading this organization in 2021”.
The complete list of directors can be found at this link.
Leyza Blanco (Sequor Law, Miami) will be the first Hispanic Chair of the Board of Directors. Blanco stated, “I am honored to have been named IWIRC’s next chair. I will be a steward to the IWIRC mission and continue to make IWIRC accessible to everyone, increasing diversity and helping our worldwide members connect and forge productive relationships.”
The other officers include Jennifer Kimble (Lowenstein Sandler, New York), Vice-Chair; Marjorie Kaufman (Getzler Henrich & Associates LLC, Boston), Secretary; Karen Fellowes (Stikeman Elliott, Vancouver) Finance Director; Michelle Pickett (PwC Canada, Toronto ) Immediate Past Chair. New to the Executive Board is Evelyn Meltzer (Troutman Pepper Hamilton Sanders LLP) as Vice Finance Director. “I believe strongly in IWIRC’s mission to connect and promote women in the insolvency and restructuring profession and look forward to continuing to advance this important work in my new role with the Executive Board in 2021 and beyond,” said Meltzer.
Michelle Pickett, outgoing Chair shared, “One of IWIRC’s missions is to provide opportunities for members to develop their leadership skills. Well, I certainly got that opportunity in 2020. Being chair of IWIRC in 2020, during a global pandemic, was a once-in-a-lifetime experience. It’s an experience I will fondly remember and certainly not soon forget. It was a growth opportunity for members of the executive, the board, and our administrative director. We all had to think differently about how we delivered value and supported members around the globe during these uncertain times. I finish my year as Chair knowing that IWIRC will be in very capable hands with Leyza Blanco as Chair in 2021. Leyza is a trailblazer and is well suited to lead IWIRC out of the pandemic and into new opportunities to Inspire, Inform and Connect our members worldwide.”
IWIRC is committed to the connection, promotion and success of women in insolvency and restructuring worldwide. For more than 25 years, across the board room, courtroom and the continents, our diverse relationships make IWIRC the premier organization for women in the restructuring and insolvency professions. IWIRC networks are located in Asia, Europe, North America and South America. We welcome the development of new networks in these or new regions. Be Inspired. Be Informed. Be Connected. For more information, please contact Administrative Director, Shari Bedker at, firstname.lastname@example.org or visit the website of IWIRC.
Click here to read the original article on the IWIRC website.
Authored By: Daniel M. Coyle – Sequor Law
Asset Recovery and Judgment Satisfaction demands access to broad remedies and creative thinking. A Judgment Creditors’ efforts to enforce a judgment may be stymied by property exemptions, wage-garnishment exemptions, trusts, multi-member LLCs, and/or because the Judgment Debtor’s property is held by a tenancy-by-the-entireties (if this manner of holding property is recognized in the state). Judgment Creditors and their counsel should look to other assets that are available, such as claims (also called choses in action) held by Judgment Debtors against others.
Black’s Law Dictionary (rev. 4th Ed. 1968) defines a chose in action as: A personal right not reduced into possession, but recoverable by a suit at law . . . A right to receive or recover a debt, demand, or damages on a cause of action ex contract or for a tort or omission of a duty
In Florida, for instance, a Judgment Creditor may reach such property via Florida’s Proceedings Supplementary statute, Fla. Stat. §56.29. Subsection (6) of that statute provides that “a court may order any property of the judgment debtor, not exempt from execution, or any property, debt, or other obligation due to the judgment debtor, in the hands of or under the control of any person subject to the Notice to Appear, to be levied upon and applied toward the satisfaction of the judgment debt.” Thus, if a Judgment Debtor has sued a third party, the Judgment Creditor may seize the claim under Fla. Stat. § 56.29. Myd Marine Distrib., Inc. v. Int’l Paint Ltd., 201 So. 3d 843, 845 (Fla. 4th DCA 2016). See also Gen. Guar. Ins. Co. of Fla. v. DaCosta, 190 So. 2d 211, 213–14 (Fla. 3d DCA 1966) (decided under predecessor statute). Other states also permit Judgment Creditors to execute and levy upon these types of assets. See, e.g., Holt v. Stollenwerck, 56 So. 912, 913 (Ala. 1911); Wittenauer v. Kaelin, 15 S.W.2d 461, 462-63 (Ky. Ct. App. 1929); Rucks-Brandt Const. Corp. v. Silver, 151 P.2d 399, 400 (Okla. 1944); Lynn v. Int’l Bhd. of Firemen & Oilers, 90 S.E.2d 204, 206 (S.C. 1955); Maranatha Faith Ctr., Inc. v. Colonial Tr. Co., 904 So. 2d 1004, 1010 (Miss. 2004); Reynolds v. Tufenkjian, 136 Nev. Adv. Op. 19 (2020). Once the Judgment Creditor seizes or attaches the claim, the Judgment Creditor now becomes the plaintiff, or potential plaintiff, as if the claim had been voluntarily assigned to it. The Judgment Creditor thus has full discretion in how to manage litigation of the claim, including full settlement discretion, but also must fund litigation of the claim.
However, in Florida, a Judgment Creditor may not levy and execute on a claim under section 56.29 if the claim is one for a “personal” tort or the claim is not assignable. Shaughnessy v. Klein, 687 So. 2d 43 (Fla. 2d DCA 1997). Personal torts are those claims that are personal to the plaintiff and that the plaintiff cannot assign, due to the personal relationship of the claim to the victim. Such torts include, but are not limited to, assault and battery, fraud, medical malpractice, (most) legal malpractice, intentional infliction of emotional distress, slander, and malicious prosecution. Forgione v. Dennis Pirtle Agency, Inc., 93 F.3d 758, 760 (11th Cir. 1996), certified question accepted, 689 So. 2d 1069 (Fla. 1997), and certified question answered, 701 So. 2d 557 (Fla. 1997); 21 C.J.S. Creditors’ Suits s 29. YOUR RECOVERY IS MINE: ENFORCEMENT OF JUDGMENTS VIA A JUDGMENT DEBTOR’S CLAIMS AGAINST THIRD PARTIES. ThoughtLeaders4 Fire Magazine • ISSUE 3 44 Other courts also recognize the same limitation. See, e.g., Certified Grocers of California, Ltd v. San Gabriel Valley Bank, 197 Cal. Rptr. 710, 715 (Ct. App. 1983); Blackmore v. Dunster, 274 P.3d 748, 752 (Mont. 2012); Reynolds v. Tufenkjian, 136 Nev. Adv. Op. 19 (2020).
While a Judgment Creditor may not levy and execute upon these types of claims, a Judgment Creditor may use proceedings supplementary to request the Court to craft alternative relief: awarding the Judgment Creditor an equitable lien on the Judgment Debtor’s potential recovery. Although section 56.29 does not contain a specific provision addressing a Judgment Creditor’s right to an equitable lien on a Judgment Debtor’s claim, 56.29(6) states: The court may enter any orders, judgments, or writs required to carry out the purpose of this section, …”.
Cases in Florida have already determined that a judgment creditor may obtain an equitable lien on a Judgment Debtor’s homestead property. Zureikat v. Shaibani, 944 So. 2d 1019, 1022 (Fla. 5th DCA 2006); Whigham v. Muehl, 511 So. 2d 717, 718 (Fla. 1st DCA 1987). Moreover, the case law interpreting section 56.29 states that Proceedings Supplementary “are equitable in nature and should be liberally construed” to provide the broadest relief to the creditor. Ferguson v. State Exchange Bank, 264 So.2d 867, 868 (Fla. 1st DCA 1972); Regent Bank v. Woodcox, 636 So.2d 885, 886 (Fla. 4th DCA 1994). Trial courts also have discretion in crafting appropriate relief for the benefit of the creditor. Myd Marine Distrib., Inc. v. Int’l Paint Ltd., 201 So. 3d 843, 844 (Fla. 4th DCA 2016). Thus a Judgment Creditor’s argument for an equitable lien on the proceeds of a lawsuit for a personal tort stands on solid ground. Other states have recognized similar concepts. See, e.g., Blackmore v. Dunster, 274 P.3d 748, 752 (Mont. 2012) (“Blackmore could petition the court to assign to Blackmore any proceeds from Dunster’s tort action in satisfaction of the judgment debt.”).
Once the Court awards the equitable lien, similarly to an attorney’s charging lien, the Judgment Creditor must file the lien in the docket of the Judgment Debtor’s lawsuit to provide notice to the Court presiding over the Judgment Debtor’s lawsuit as well as the third party of the Judgment Creditor’s interest in the potential recovery. In contrast to the Judgment Creditor’s seizure of the claim, the filing of an equitable lien leaves the management of the claim, including the discretion on settlement decisions, with the Judgment Debtor. The Judgment Debtor also retains the obligation to fund the litigation. A potential drawback is that these factors, combined with the fact that some, most or all of the recovery will flow to the Judgment Creditor may result in the Judgment Debtor losing interest in pursuing the claim, and/or abandoning it entirely.
A potential alternative to the equitable lien would be to monitor the lawsuit, and to timely serve a writ of garnishment upon the third party after the verdict. However, this has the drawback of increased administrative costs due to the need to constantly monitor proceedings, the need to coordinate with a potentially a third party who has nothing to gain by such cooperation and whose interests are still adverse to the Judgment Creditor and the need to time the writ of garnishment (with potential service requirement issues as the writ must be served on the third party, not its attorney in the case).
Sequor Law is a Miami-based international law firm representing financial institutions, sovereign governments and state owned enterprises, public and non-public companies, insolvency practitioners and individual clients in the areas of asset recovery, financial fraud, insolvency and financial services litigation.
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