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Do I need a Chapter 7 Bankruptcy Attorney?

Author By Susan Cress BrowningPosted on

In the last year, our country has seen layoffs, shutdowns, job loss and shuttered businesses due to the pandemic. The government has provided some assistance by way of stimulus checks, increased unemployment payments, and moratoriums on evictions and foreclosures. This has temporarily eased concerns of those struggling financially and delayed their seeking legal advice for debt relief. It has served to stave off, what is anticipated to be, a flood of bankruptcy filings. Unfortunately, these are temporary solutions to a long-term problem.

As moratoriums end and stimulus checks are spent, debtors are searching for a resolution to their economic woes. This article provides basic information on Chapter 7 Bankruptcy as a possible solution. If you would like more information on consumer bankruptcy, please visit our law firm bankruptcy practice page at https://finneylawfirm.com/practice-areas/bankruptcy.

Types of bankruptcy filings

There are several types of bankruptcy a debtor can file: Chapter 7 (Liquidation), Chapter 9 (Municipalities), Chapter 11 (Business Reorganization), Chapter 12 (Family Farmers), Chapter 13 (Wage Earners), and Chapter 15 (Foreign debtors/ Courts . After almost two decades of being a chapter 7 Bankruptcy Attorney, the clear preference for clients is filing a chapter 7.  The reason for this is that chapter 7 is cheaper and quicker than other types of bankruptcy filings. However, it is not without its risks and downsides.

What is a Chapter 7 bankruptcy?

Chapter 7 is a “liquidation” bankruptcy. A bankruptcy trustee will examine your income, expenses, assets and debts. In order to qualify, you must be below a certain income level for your household size. If you are not below this threshold, the case may have to be converted to another chapter of bankruptcy. The trustee reviews the assets you own and what they are worth. After the trustee subtracts what you might owe to a secured creditor from the value of the asset, the balance is considered your equity.

State and/or Federal exemptions are available to protect certain necessary assets up to a certain dollar amount. These exemptions are applied to your equity in each asset.  If no equity remains after this calculation, then you are not at risk of the trustee liquidating that asset. If equity does exist after the calculation, the trustee can sell the asset and pay your creditors a percentage of what you owe to them. Most chapter 7 bankruptcy filings do not end in liquidation and are considered “no asset” cases. In the event assets may be liquidated a debtor must be prepared to lose the asset or look at other options such as Chapter 13.

Chapter 7 requirements

Before filing a bankruptcy case a debtor must take a credit counseling course. After the bankruptcy filing a debtor must take financial management course. If you seek the assistance of bankruptcy attorney, you will be tasked with gathering information and documents to assist the attorney in filling out the bankruptcy petition and schedules.  The petition and schedules will include information on all of your income, expenses, assets, and debts. After these documents have been reviewed with the debtor and attorney and filing fees have been paid, the petition will be filed with the bankruptcy court. A trustee will be appointed and a 341 Meeting of Creditors will be scheduled.

Chapter 7 procedures

Roughly six weeks after the filing of the case, the debtor will attend the 341 Meeting of Creditors (currently held telephonically). It is a short hearing where the trustee reviews your petition and clarifies its contents on the record. If you have retained counsel, they will attend this hearing with you. Creditors are allowed to attend this hearing and ask questions of the debtor regarding the debt or any collateral that secures the debt. Following this meeting, the creditors have 60 days to object to your discharge. If no objections are filed, the debtor will receive their discharge a few weeks later.

Chapter 7 outcome

Chapter 7 can discharge many forms of debt such as credit card, medical bills, debt from repossession, foreclosures, and payday loans to name a few. However, student loans, recent taxes and marital support or settlement debts cannot be discharged in a Chapter 7. It is possible to keep a car or home that you own if it is protected under the appropriate exemption and you are current on payments to the secured creditor.

Comparing Chapter 7 to Chapter 13 bankruptcy filings

In comparison to Chapter 7, Chapter 13 bankruptcy is a repayment plan over a period of three to five years. It is intended for debtors who have enough income that they can pay back a percentage of their debts over a period of time, who may have non-exempt assets they could lose in a Chapter 7 liquidation, or who may get some benefit in a Chapter 13 that they cannot get in a Chapter 7.

Conclusion

Filing a bankruptcy is not always the answer or the only answer in some situations, however, if you are seeking a fresh start by filing for bankruptcy, contact bankruptcy lawyer Susan Browning at (513) 797-2857 for a FREE consultation. Our firm boasts practicing lawyers in Cincinnati, Dayton, and Northern Kentucky who can guide you through the bankruptcy court process.

Chapter 11 Bankruptcy 101

Author By Susan Cress BrowningPosted on

Since the coronavirus pandemic began, our economy has seen a myriad of changes. Due to the shutdowns early on many businesses had to shutter their doors. Some were unable to reopen or continue business operations. The ones that could remain open are saddled with overwhelming debt including overdue mortgages and leases.

With foreclosure and eviction moratoriums coming to an end in many states, it is expected to see more businesses close up shop. However, there may be an answer in the form of bankruptcy.

What is Chapter 11 Bankruptcy?

The Bankruptcy Code allows debtors, whether as individuals or a business, to file a Chapter 11 case to reorganize their debts. Chapter 11 is mostly known as a solution for business debtors. However, it can also be a remedy for individual debtors who have income too high to file a Chapter 7 and are who are above the debt limits for filing a Chapter 13 bankruptcy.

There are several types of Chapter 11 cases including the typical Chapter 11, Small Business Chapter 11, the new Small Business Reorganization Act Chapter 11 (SubChapter V) and a single-asset Chapter 11.

This article will focus on the standard Chapter 11 case.

Filing the Petition

A Chapter 11 bankruptcy case begins with the filing of a bankruptcy petition. This petition will include a listing of the debtor’s secured and unsecured debts, unexpired leases and contracts, income, and expenses, as well as a listing of the debtor’s assets.

This bankruptcy filing creates an automatic stay to protect the debtor from collection by secured and unsecured creditors. Creditors can request relief from stay from the court if cause exists to do so. A hearing will be held to determine whether the request for relief from stay will be granted.

Once the Chapter 11 debtor files the petition they are known as a debtor in possession. The debtor in possession will maintain control and possession of assets and continue operations while under the watchful eye of the United States Trustee and the Bankruptcy Court. At the outset of the case the debtor must close open bank accounts, opening new ones for the bankruptcy process, as well as procure insurance for assets of the estate. The debtor must provide monthly operating reports for the business.  The debtor in possession has many responsibilities similar to that of a trustee including objecting to creditor claims and pursuing preference and fraudulent transfer actions.

A Chapter 11 trustee is not appointed unless there is a cause to do so, such as debtor misconduct or inability to perform the duties of a debtor in possession.

The United States Trustee has an active role in the Chapter 11 process to ensure the debtor in possession performs their duties properly. A fee is paid to the US Trustee quarterly based on distributions to creditors. In addition, the US Trustee nominates a creditor committee to assist in oversight of the debtor in possession and the plan.

A meeting of creditors will be held with the debtor, US Trustee and creditors that choose to participate.  This allows the debtor an opportunity to explain the plan and gives the US Trustee and creditors an opportunity to question the debtor about the petition and plan.

Disclosure Statement and Chapter 11 Plan

Following the filing of the bankruptcy petition, the debtor will file a disclosure statement. The disclosure statement gives the court and creditors background information about the debtor and its business operations, such as income and expenses, debts, and information about debtor’s business model. It is meant to persuade the creditors that the proposed plan will be manageable based on the anticipated future operations of the debtor’s business.

The disclosure statement must provide adequate information for the creditor to develop an informed opinion about the viability of the debtor’s plan. The court must approve the statement.

Once the disclosure statement is approved, a Chapter 11 plan will be filed. The Chapter 11 plan will inform the court and the creditors how the debtor is proposing to classify and treat the creditors’ claims.  Some of the permissive provisions that may be part of the plan include spreading out the terms of repayment, and in many cases much longer than the five years allowed in Chapter 13 cases. Loans can be re-amortized at a lower interest rate, stripped off, or may be crammed down to the value of the secured property (except for residential property that is debtor’s primary residence).

A debtor has the exclusive right to file a plan in the first 120 days after the petition. This period may be extended with approval of the court. At the end of this exclusivity period, competing plans can be submitted by creditors. Creditors must also provide disclosure and submit ballots to creditors.

The plan must be served on the US Trustee, SEC, and any creditors who request a copy along with ballots in an attempt to encourage acceptance of the plan. The debtor has 180 days after filing to gain acceptance of the plan. This time frame may also be extended by the court.

If the debtor changes the amount or terms of a debt owed to a creditor, these creditors are considered “impaired” and may vote on whether they approve of the plan.

Modifications may be made to the plan at any time prior to confirmation. Any previously consenting creditor is deemed to accept the modified plan if no objection is raised.

Voting and Confirmation

For a creditor to vote on the plan, their claim must be scheduled by the debtor or a proof of claim must be filed by the creditor. This same process applies to any equity security holder of the debtor except that a proof of interest is filed by the holder.

Only impaired classes may vote on the plan. An impaired class is one that is not being paid pursuant to original contract terms. Impaired classes do not include administrative claims or priority claims.

A class is deemed to have accepted the plan if more than half of the claimholders accept the plan and the accepting creditors make up at least two-thirds of the total claim dollar amount in that class. At least one impaired class must accept the plan for the plan to be confirmed.

A confirmation hearing will be held by the bankruptcy court to determine if the plan will be confirmed. The court must determine if the plan was proposed in good faith, is feasible, is not likely to result in liquidation and satisfies all other bankruptcy code requirements. The court will take up any objections to confirmation of the plan at the confirmation hearing.

Discharge, Administration, and Final Decree

A discharge in Chapter 11 operates very differently than in Chapter 7 and 13. Confirmation of the plan alters the relationship between creditors and debtor. It places debtor in the position of replacing the old contract obligations owed to creditors with new contract obligations. A discharge is generally received after confirmation unless the debtor is an individual. An individual debtor must complete payments before receiving a discharge. In addition, as is the case in Chapter 7, some debts under the code are non-dischargeable.

Modifications may be made to a plan after confirmation but must meet the guidelines under the bankruptcy code. The case must not be substantially consummated which means debtor has begun payments or transferred property under the plan provisions.

The debtor must administer the case as well as provide reports to the court. Once the case has been fully administered, the debtor will request a final decree from the court.

 

If you or your business are struggling financially and would like more information regarding bankruptcy laws and the bankruptcy process please contact Susan Browning, 513.943.6650 at the Finney Law Firm for a FREE CONSULTATION.

Do I Need A Foreclosure Attorney?

Author By Susan Cress BrowningPosted on

In the current post-covid climate many homeowners are finding themselves in a position they never would have imagined: facing foreclosure and a looming sheriff sale. During the pandemic, job loss, layoffs, shutdowns, and illness caused payments to be missed.

The government response was to put moratoriums in place to prevent homeowners from losing their residence. As these moratoriums are being lifted in some places, despite the Center for Disease Control’s continuation order, mortgage companies are once again filing or reinstating foreclosures. This blog will provide information about how you may be able to save your home in the bankruptcy context as Dayton, Northern Kentucky, and Cincinnati foreclosures are on the rise. If you would like further information, please visit our bankruptcy page.

Before Filing for Foreclosure

I receive frequent calls from potential clients seeking a foreclosure attorney because they have been served with a summons and complaint for foreclosure. In some cases, there may be defenses to your foreclosure available. Foreclosure defense can be a very complex area of law, especially when there are Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) violations at issue.

Option 1: Mortgage Company Violations

Mortgage companies must follow certain guidelines under state law when foreclosing on your home. If you feel like your mortgage company has violated your rights in the foreclosure process or in servicing your loan, please seek legal advice. However, if you have been advised that there are no viable defenses to your foreclosure other options may be at your disposal.

Option 2: Short Sale or Deed-In-Lieu

In the case where you no longer have the income to pay your mortgage, you may have the option of a short sale or deed-in-lieu. Keep in mind as you explore these options that they may have forgiveness of debt consequences associated with them.

Option 3: Mortgage Modification

In every case where a potential client is facing foreclosure, I begin by recommending that they submit the necessary paperwork to request a mortgage modification with their mortgage company. This will include a statement of hardship explaining what circumstances led to getting behind on your payments. The client may qualify for payments to be reduced or delinquencies to be added to the back end of the mortgage. Sometimes a modification may solve the homeowner’s issues without anything more.

Option 4: Chapter 13 Bankruptcy

If the modification process is not fruitful and the client has sufficient income, it is possible that a chapter 13 could be filed with the Bankruptcy Court to catch up the mortgage arrearage over time while paying the regular monthly mortgage. A chapter 13 bankruptcy plan can last from three to five years depending on your income and the amount of time needed to pay the delinquent payments. Even if the court has issued an order for foreclosure and a sheriff sale has been scheduled, a chapter 13 bankruptcy can stop the sale.

Filing a chapter 13 bankruptcy may also be beneficial to resolve other debt issues the client may have including medical bills and credit card debt. Most times these unsecured debts will be paid just pennies on the dollar during the bankruptcy process. Chapter 13 can also provide a method to pay back taxes and automobile loan delinquencies.

 

If you are facing foreclosure and would like to speak to an experienced attorney to assess whether you can save your home, please contact the law office of Finney Law Firm at 513-797-2857.

Our practice areas include bankruptcy, corporate transactional, commercial and residential real estate, estate planning, employment and labor, personal injury, business and commercial litigation, tax valuation, and public interest law.

Finney Law Firm sues Ohio Department of Education over simply bizarre speech restrictions regarding Critical Race Theory

Author By Christopher P. FinneyPosted on

Whether one agrees or disagrees with the Ohio Department of Education’s adoption of Critical Race Theory and the 1619 Project’s for implementation throughout Ohio’s school systems, we should all agree that an open and robust debate about that policy before public bodies is appropriate and required under the U.S. Constitution. But that’s not how the Ohio Board of Education sees things.

Once they hastily adopted the new policies, they then formally forbade speakers before them from criticizing their decision. The ODE allows public comment on all other topics, but specifically not these two.

So, last week, the Finney Law Firm filed suit against ODE challenging these restrictions on speech during the public comment section of Board meetings. Read that suit here.

The Board did not just quietly and unconstitutionally squelch in a public forum,  but they explained why they were privileged — indeed compelled — to trample on the Constitution in this instance:

  • “[O]ur board president has instituted a policy that prevents people from speaking to our group in reference to any of these issues about critical race theory, etc.…  I’m not sure why we have a filter on what we’re allowed to hear here, but we do.”
  • “I was really glad when [LAURA KOHLER] said we weren’t going to have those speeches anymore”
  • “I would just prefer that we not have a conversation about critical race theory, or 1619….”
  • “I don’t want to sit here again and listen to two months of people – they have their opinions….  This is not what I’m here for”
  • “I’m using race and I don’t feel ashamed about that”
  • That if such public comments or testimony were allowed then the meeting of the OHIO STATE BOARD OF EDUCATION “would not longer be a safe space for me”

I suppose if you are that delicate and thin-skinned, perhaps you should not sign up for the rough and tumble of public office. Just a thought.

Media coverage of this is below:

For inquiries on this story, contact Curt Hartman (513.379.2923) or Chris Finney (513.943.6655).

Can an At-Will Employee Be Fired for Engaging in a Political Protest?

Author By Todd McMurtryPosted on

Most people have strong opinions regarding politics — and sometimes the topic can be difficult to avoid in the workplace. If you express your views at your job or by participating in a political protest, you may be wondering if you can be legally terminated by your employer in retaliation.

Although the First Amendment provides federal and state employees with protection from retaliation for political speech and activities, it does not apply to employees of private organizations. In other words, if you engage in political protests and are then terminated from a job in the private sector, you have limited legal recourse.

Kentucky is an at-will employment state, which means that an employee can generally be fired at any time and for any reason or for no reason at all. Nevertheless, you cannot be terminated if the employer’s action would violate state or federal employment laws, such as those prohibiting discrimination based on race, gender, religion, disability, age or national origin. Employees are also legally protected from retaliation for filing a whistleblower complaint, reporting discrimination, taking FMLA leave, making a complaint regarding OSHA violations or pursuing a workers’ compensation claim.

In addition, some states have laws that protect employees when it comes to an employer’s conduct in attempting to influence how they vote. Kentucky’s law prohibits employers from dictating how employees should vote in state elections. An employer cannot:

  • Exert pressure on employees to vote a certain way
  • Coerce employees to vote for a specific political party
  • Direct employees to vote for a particular candidate for state office
  • Threaten to fire an employee based on their voting activity
  • Disseminate any communications that they expect employees to vote for any particular candidate
  • Bribe or induce employees to vote a specific way in a state election
  • Threaten employees with a company shutdown if a particular candidate wins an election.

Although the Kentucky statute does not explicitly mention retaliation against an employee for participation in a political protest, it may be persuasively argued that such actions are at least as intimidating as interference with an employee’s voting rights. An argument can also be made that retaliation for protesting is against public policy.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

Property-Tax

Mortgagee remedies and Ohio statute of limitations

Author By Jennings D. KleemanPosted on

“A mortgage is a conveyance of property to secure the performance of some obligation, which is designed to come void upon due performance thereof.”[1] The Ohio Revised Code characterizes mortgages as “liens.”[2] Mortgage liens are only applicable to real property, as with the land and the buildings attached to it.

Mortgagors (the party granting the mortgage) tend to grant mortgages to secure payment of money from the mortgagee (the party granting a loan in consideration for the mortgage).[3] The instrument evidencing the debt secured by the mortgage is generally referred to as a “note.” However, mortgagors may grant mortgages to secure the performance of other obligations, like an environmental indemnification.

Notes and mortgages, as contracts, are negotiable by the parties to them. As such, notes and mortgages include all sorts of obligations and remedies. That said, there are three basic remedies that a mortgagee can pursue to enforce the note and mortgage.[4] Mortgages can pursue all three of the following remedies at the same time or separately.[5] However, in doing so, a mortgagee must keep in mind the different statute of limitations periods for each remedy.

(1) An action on the debt secured by the mortgage (the note).

When a mortgagee brings an action on the debt secured by the mortgage, the mortgagee is bringing an action for a personal judgment debt evidenced by the note against the mortgagor (or any other maker of the note, even if they did not sign the mortgage).[6]

In Ohio, written instruments, such as notes, have a six-year statute of limitations, running from the due date(s) or, if applicable, the date the debt is accelerated.[7] When the statute of limitations runs on the note, the mortgagee can still go after the mortgagor with a foreclosure action, as the statute of limitations on the mortgage is longer. The statute of limitations for the foreclosure does not run by virtue of the statute of limitations on the note running.[8]

(2) An action to foreclose on the mortgaged property.

When a mortgagee brings an action to foreclose on the mortgaged property, the mortgagee is attempting to secure the mortgagee’s conditional interest (conditional on mortgagor default) in the property.[9] If the mortgagee succeeds here, the mortgagee will have superior title to the property than that of the mortgagor.[10] The go-to remedy for mortgagees is that of an action to foreclose on the mortgaged property.[11]

In Ohio, foreclosure actions have an eight-year statute of limitations, running from the date that the breach occurred.[12] The statute of limitations for foreclosures was changed from fifteen years to eight years on September 28, 2012.[13] For breaches that occurred before September 28, 2012, the statute of limitations runs at the end of the fifteen-year period from the breach or September 27, 2020, whichever is earlier.[14]

(3) An action of ejectment against the occupier of the mortgaged property.[15]

When a mortgagee brings an action of ejectment against the occupier of the mortgaged property, the mortgagee is attempting to take possession of the property.[16] In doing this, the mortgagee is taking advantage of the mortgagee’s superior title to the property to that of the mortgagor. [17]

In Ohio, ejectment actions have a twenty-one-year statute of limitations, running from the date that the mortgage becomes due.[18]

The aforementioned information regarding the statute of limitations does not apply to the mortgage itself. A mortgage, that is unsatisfied or unreleased of record, remains in effect for twenty-one-years from the date of the mortgage or twenty-one-years from the date of the maturity date (if any), whichever is later.[19] This, however, deals more with the purchasing of encumbered property free from the prior mortgage, and the mortgagee’s ability to enforce a prior mortgage against purchaser.

If you, as a mortgagee, have a mortgagor in default and want to enforce the note, mortgage, or both, call the Finney Law Firm today!

[1] Barnets, Inc. v. Johnson, Case No. CA2004-02-005, 2005 Ohio App. LEXIS 703, *8 (Ohio App. 12th Dist. Feb. 22, 2005), citing Brown v. First Nat. Bank, 44 Ohio St. 269, 274 (1886).

[2] Barnets, at *8.

[3] Barnets. at *9.

[4] Barnets, at *9.

[5] Barnets, at *9.

[6] United States Bank Nat’l Ass’n v. O’Malley, 150 N.E.3d 532 (Ohio App. 8th Dist. Dec. 26, 2019).

[7] ORC Section 1303.16.

[8] O’Malley, at 532.

[9] O’Malley, at 532.

[10] Search Mgmt. L.L.C. v. Fillinger, 2020 Ohio App. LEXIS 1966, *1.

[11] Barnets, at *9.

[12] ORC Section 2305.06.

[13]Ohio Real Property Law and Practice § 19.10 (2020).

[14] Ohio Real Property Law and Practice § 19.10 (2020)

[15] Barnets, at *9.

[16] Fillinger, at *1.

[17] Fillinger, at *1.

[18] Cont’l W. Reserve v. Island Dev. Corp., 1997 Ohio App. LEXIS 962, *1.

[19] ORC Section 5301.30.

Does the President Have the Legal Authority to Cancel Student Loans by Executive Order?

Author By Todd McMurtryPosted on

One of the biggest issues faced by the Biden Administration is the nation’s student loan crisis. Congressional leaders and various organizations are calling on President Biden to cancel up to $50,000 in student loans per borrower by executive order. Biden supports the idea in principle but questions whether he has the legal authority to take executive action. Generally, Congress has authority pertaining to the approval of federal spending, the category under which student loans fall.

However, Senate Democratic Leader Chuck Schumer, Senator Elizabeth Warren and other senators have introduced a resolution outlining a way that the president could use his authority under the Higher Education Act of 1965 to cancel student loan debt and to ensure federal student loan borrowers do not incur tax liability as a result. A section of the act gives the Secretary of Education the power “to modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” The resolution seeks the sense of Congress that through the Secretary of Education, student loans can be cancelled by execution action.

Calls for federal student debt cancellation have also been lodged by more than 325 undersigned community, civil rights, climate, health, consumer, labor and student advocacy organizations.

With Congress embroiled in debate over the pending COVID-19 stimulus package, it is unlikely that legislative action on student debt will be taken soon. In the meantime, an automatic forbearance has been applied to federal student loans due to the pandemic. Debtors also may have other options for easing their financial burdens. These may include:

  • Refinancing — By combining federal or private student loans into a single loan, you may be able to lower your interest rate, which can help you pay off the debt faster.
  • Income-driven repayment plans — If your monthly payments are higher than you can afford, you can negotiate with the lender about entering into a repayment plan that suits your income level. Depending on your financial circumstances, you may be able to enroll in a plan that drastically lowers your monthly payments.
  • Forgiveness — You may be eligible for forgiveness, cancellation, or discharge of your student loans based on certain reasons, such as if you are totally and permanently disabled, are employed by a government or not-for-profit organization or have a history of working as a full-time teacher in a low-income elementary school, secondary school or educational service agency. A student loan may be discharged in bankruptcy if you can prove economic hardship.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

Matthew Okiishi

Employment Legislation Update: Ohio debates harmonizing overtime law; Kentucky considers eliminating protections for smokers

Author By Matthew S. OkiishiPosted on

In order to best serve our clients, the Finney Law Firm’s Employment Law team closely tracks proposed Ohio, Kentucky, and federal employment legislation. The Ohio General Assembly and Kentucky Legislature are currently debating small, yet significant, changes to their employment laws.

Ohio

In Ohio, Senate Bill 47 would amend Ohio’s wage and hour statute, O.R.C. 4111.01, et seq., to incorporate the federal “Portal to Portal Act” into Ohio law. Should the bill pass, the proposed O.R.C. 4111.031 Ohio would explicitly eliminate employees from being compensated for time travelling to and from the place of performance, activities that are preliminary to or postliminary to the principal activities, and activities requiring insignificant or de minimis time. The rule would not apply where the activities are preformed either during the regular work day or during prescribed hours, or at the direction of the employer.

As S.B. 47 merely harmonizes Ohio law with the federal Fair Labor Standards Act, most Ohio employers should be unaffected by the changes. However, all employers should have a knowledgeable employment attorney review their policies and procedures for the handling of out of office work, especially in regards to emails. While a simple review of an email outside of work hours is likely de minimis time, an email requiring a substantive response or directing to an immediate task would likely not be exempt time under the proposed O.R.C 4111.031.

Kentucky

Kentucky is currently one of 26 states with laws that prohibit discriminating against smokers who otherwise comply with workplace rules. Senate Bill 258 would eliminate protections for smokers from K.R.S. 344.040, allowing employers to, among other things, require an employee or job applicant to abstain from smoking or using tobacco during or outside of the course of employment. Should the bill pass, Kentucky employers would be permitted to modify their handbook and hiring policies to exclude smokers and create a generally healthier work environment.

____________________

Please contact Stephen E. Imm (513.943.5678) of Matthew Okiishi (‭513.943.6659) for help with an employment law issue.

Fraudulent transfers of assets to defraud creditors is a major “no-no.” Proceed with great caution.

Author By Jennings D. KleemanPosted on

Debtors that anticipate being subject to a judgment might fraudulently transfer their assets in an attempt to hide those assets from their creditors. This issue might even exist after the creditor obtains a judgment against the debtor. Just because a debtor might do this, does not mean that creditors are out of luck. 

Ohio’s Uniform Fraudulent Transfer Act, under ORC Chapter 1336, creates rights for creditors to set aside fraudulent transfers by debtors. The point of these rights is to do away with fraudulent transfers that “prevent a creditor from obtaining satisfaction of an underlying debt.” 

There are four general causes of action under ORC Chapter 1336. A fraudulent transfer, as the one described above, would likely fall under the cause of action provided by ORC Section 1336.04(A)(1). To succeed on such a claim, the creditor must prove that there was a transfer of an asset with actual intent to defraud, hinder, or delay present or future creditors. A creditor may prove “actual intent” through the use of circumstantial evidence. Types of circumstantial evidence, or badges, are listed in ORC Section 1336.04(B). 

If a creditor fraudulently transfers assets, ORC Section 1336.08 generally allows creditors to sue the transferees (i.e., parties that received the fraudulent transfers). The creditor can sue any of the transferees for the value of the transferred property, subject to certain defenses.” That is not to say that a creditor would be required to sue every single transferee. The only “necessary party would be the transferee (or participant for whose benefit the transaction was made) from whom recovery is sought.” The statute is written as such because in most fraudulent transfer cases, “the debtor is judgment-proof and the transfer was made to hide the property from the creditor.” 

ORC Section 1336.07 addresses creditor remedies, which include:

  1. an avoidance of the transfer; 
  2. an attachment or garnishment against the asset transferred or other property of the debtor;
  3. an injunction against further disposition of the asset transferred or other property of the debtor;
  4. an appointment of a receiver to take charge of the asset transferred; or
  5. any other relief that the circumstances of the case may require.”

Punitive damages may also be awarded. However, ORC Section 2315.21(C) states that punitive damages are not recoverable unless: 

  1. the actions or omissions of that debtor demonstrate malice or aggravated or egregious fraud, and 
  2. the trier of fact has made a determination of the total compensatory damages recoverable by the creditor from that debtor.

Attorneys’ fees may also be awarded. However, there is not an automatic award of attorney fees for those who prevail under ORC Section 1336. The creditor “may only recover reasonable attorney fees” when punitive damages are awarded.

So, if you are a creditor chasing a debtor who is actively fraudulently transferring assets to hide them from you, it might be time to call an attorney with the Finney Law Firm. 

Contact Jennings Kleeman at 513.797.2858 for assistance with a fraudulent transfer claim.

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