Photo of Robert E. Kaelin

Bob Kaelin represents clients in the areas of commercial litigation and bankruptcy. His commercial litigation practice centers on collection work, such as foreclosures, replevin actions and actions pursuant to the Connecticut Prejudgment Remedy Statute, and business disputes, contract actions, franchise agreement claims, Uniform Commercial Code actions and claims for tortious interference with business. Bob has tried bench and jury trials in both federal and state court, and has represented clients in arbitration and mediation.

In chapter 11 bankruptcy cases, it is not uncommon for secured parties/lenders to provide a “carve-out” for various professional fees.  Frequently there may be a “carve-out” for “all chapter 11 professionals” or the “carve-out” may be broken out in different amounts for the debtor’s professionals as opposed to, for example, Creditors’ Committee professionals.  These “carve-outs” can often be in a Cash Collateral Order (assuming the debtor is using the secured party’s collateral) or in a DIP Order (debtor-in-possession financing). So what does a carve-out mean?

Continue Reading So What Does a Bankruptcy Carve-Out Clause Really Mean? Delaware Bankruptcy Court Concludes It is Not a Cap on Fees After All

The United States Court of Appeals for the Second Circuit issued a decision today in the case of OneWest Bank, N.A. v. Robert W. Melina, No. 15-3063 (2d Cir. June 29, 2016) holding that a national bank is a citizen only of the state in which its main office is located, as stated in the bank’s articles of association.

Continue Reading U. S. Court of Appeals 2nd Circuit Decision: National Bank is a Citizen Only of the State in Which its Main Office is Located

So you are chugging along with a foreclosure action (either on real and/or personal property) only to be stopped in your tracks by the borrower filing a voluntary Chapter 7 bankruptcy petition.  The usual, immediate thought is – “better contact our bankruptcy counsel to obtain relief from the automatic stay.”  Well, perhaps, or perhaps you might want to contact the Chapter 7 Trustee first (either directly or through your bankruptcy counsel).  Why?  Maybe the Chapter 7 Trustee would be interested in liquidating that collateral for you though the bankruptcy system.

Continue Reading When and How Can a Chapter 7 Bankruptcy Trustee Liquidate Your Collateral?

Necessary Steps in the Collection Process

Collecting money owed to you or your company can be frustrating. This video series given by Alena Gfeller and Bob Kaelin of Murtha Cullina highlights the collection process in Connecticut.

Continue Reading [Video] Connecticut Collections Part 3: How to get paid if you are owed money?

What is a Connecticut Pre-judgment Remedy (“PJR”)

Collecting money owed to you or your company can be frustrating. This video series given by Alena Gfeller and Bob Kaelin of Murtha Cullina highlights the collection process in Connecticut.

Continue Reading [Video] Connecticut Collections Part 2: How to get paid if you are owed money?

Pre and Post-Judgment Collection Specifics

Collecting money owed to you or your company can be frustrating. This video series given by Alena Gfeller and Bob Kaelin of Murtha Cullina highlights the collection process in Connecticut.

Continue Reading [Video] Connecticut Collections Part 1: How to get paid if you are owed money?

For secured lenders, a consumer debtor’s chapter 13 bankruptcy filing can be a mixed bag.

A chapter 13 bankruptcy petition often is utilized by a consumer debtor to avoid a foreclosure by allowing a debtor time (usually three or five years) to catch up on mortgage payment arrears.  In the ideal situation, where real property is not underwater, chapter 13 allows a secured lender to recoup a debtor’s delinquent payments over time and avoid costly foreclosure procedures. On the other hand, if the secured real estate is underwater (or the debtor otherwise does not wish to retain the property), the Bankruptcy Code allows a debtor to “surrender” the property to the secured lender.  Until relatively recently, “surrender” meant merely allowing the secured lender to exercise its rights with respect to the property in accordance with its ordinary and customary practice under state law (usually by foreclosure, deed in lieu of foreclosure or short sale).

Recently, however, there has been a trend in some jurisdictions whereby secured lenders might end up being forced to accept title to underwater real estate without any say in the matter (i.e., over its own objection).

The Bankruptcy Court for the District of Massachusetts is now split as to whether a chapter 13 debtor can force a secured lender to accept underwater real estate over the lender’s objection. Indeed, two bankruptcy judges in the District of Massachusetts recently issued opinions on the exact same day (March 4, 2016) reaching the exact opposite conclusions as to this issue, a possible signal that these judges want this practice to be reviewed by a higher court.  See In re Brown  (finding that a chapter 13 plan may provide that title to real estate vests in the secured lender despite lender’s objection); In re Tossi  (finding that a plan that vests title in a lender over the lender’s objection is not permissible).

Continue Reading The District of Massachusetts Calls for Review of Practice of “Surrendering” Underwater Property

It always starts so easy.  Borrower comes in and wants to borrow money.  Lenders want some form of collateral to secure (potentially) a loan and the Borrower happily agrees to provide, or pledge, collateral to secure a loan.  Common examples are the Borrower pledging inventory, equipment or receivables (assuming of course there is no real estate to lien with a mortgage).  Lender, either internally, or with outside counsel, prepares the necessary security agreement to document the pledge of collateral.  This is generally the description of a secured transaction.

While there is generally a happy relationship between the Borrower and the Lender, and therefore no issues, problems frequently arise, however, when the Borrower goes bankrupt.  

In bankruptcy, the Lender is now faced with having to deal with either a Chapter 7 Trustee or a Creditors’ Committee in a Chapter 11.  Whether it is a Chapter 7 Trustee or a Creditors’ Committee, one of their first tasks is reviewing the loan documents and seeing if there is a way to challenge the effectiveness of the security arrangement.

Continue Reading Dot Your “I”s and Cross your “T”s: When It Comes to Perfecting Your Security Interest