Brown Bag Luncheon with the Honorable Frank J. Bailey 5/23/19

Thursday, May 23, 2019
12:00 PM to 1:00 PM
John McCormack Post Office Court House – 5 Post Office Square, 12th Floor Library, Boston, MA

Please join the Consumer Bankruptcy Committee for an interactive discussion with the Honorable Frank J. Bailey. This will be an excellent opportunity to hear about Judge Bailey’s current concerns and to discuss hot topics of the day with fellow bankruptcy practitioners. If you have any questions that you would like to ask Judge Bailey, please email them to Kate Cruickshank at by May 17, 2019. The questions will be screened and submitted anonymously.

This event is free and lunch will be provided to those who pre-register. Please RSVP using the link below. You do not need to be a BBA member to register. For any parties interested in attending the program by phone, a dial in number is provided.


29th Annual Bankruptcy Bench Meets Bar Conference 5/22/19

Wednesday, May 22, 2019
3:00 p.m. – 6:00 p.m.
UMASS Club – 1 Beacon Street, 32nd Floor, Boston MA

The BBA’s Bankruptcy Bench Meets Bar Conference is an annual opportunity for bankruptcy professionals and the Federal Bankruptcy Court Judges to meet and share insights, observations and analysis on key issues for 2019 and beyond.

This year’s agenda includes:
I. Recent Bankruptcy Cases of Interest (including pending at the U.S. Supreme Court)
II. Issues Regarding Individual Chapter 11 Cases
III. Issues Arising in Church and other Non-Profit Entity Bankruptcy Cases


ABI Bankruptcy Mediation Training Program 5/9/19

ABI Bankruptcy Mediation Training Program

Date: May 9, 2019

Venue: Suffolk University

Program: 2:00 p.m. to 5:00 p.m. (registration starts at 1:30 p.m.)

Please join ABI for its first Three-Hour Bankruptcy Mediation Training Program on Thursday, May 9, at Suffolk University School of Law. Designed for both the consumer and business attorney, this program is more than “Mediation 101”; it is designed to simulate conceptual interests in mediation as a useful tool in districts where mediation might be underutilized and might need a local rule refresh to enhance the process.


Help Out, Have Fun, and Feel Good!

Need a break from bankruptcy and billable hours? Connect with your colleagues while helping out our community. Join the BBA’s Bankruptcy Section and IWIRC New England for an evening of service at the Greater Boston Food Bank.

Wednesday, March 6th from 5:30 PM – 8:00 PM at 70 South Bay Ave., Boston, MA 02118.

A few hours of your time will help the GBFB feed thousands of families in need throughout eastern Massachusetts.

To participate, sign up here!

Fine print: During the project, volunteers might be asked to load product onto a conveyor belt, inspect and sort nonperishable donations, sort produce, put nutrition labels on product, and package foods for distribution to partner agencies. Some tasks require the ability to lift up to 50 pounds, but there are a variety of tasks for all abilities. In general, the only requirement is that a volunteer stand and inspect products for a few hours. Please remember, closed-toe shoes are required while volunteering (no sandals or flip flops).

Case Law Update: Beware Representing the Company and the Equity in Insider Transactions

Case: Blast Fitness Group, LLC v. Gary W. Cruickshank, Chapter 7 Trustee of The Estate of Blast Fitness Group, LLC (In re Blast Fitness Group, LLC), no. 16-10236-MSH (Bankr. D. Mass.).

Opinion By: Judge Melvin S. Hoffman

January 8, 2019


Chapter 7 Trustee brought forth an adversary proceeding seeking damages and injunctive relief against the law firm of Goodwin Proctor, a Goodwin partner, and a former Goodwin attorney (collectively the Goodwin Defendants), along with dozens of other defendants, for allegedly depriving Blast Fitness Group, LLC (BFG) of profit opportunities and diverting valuable assets which lead to BFG’s Chapter 7 filing.

Goodwin, on behalf of BFG and a BFG subsidiary, had drafted an asset purchase agreement to acquire three fitness clubs in 2012 (the Bally Transaction). In order to raise capital for this acquisition, members of BFG agreed to sell a preferred member interest to Dixon Limited Partnership, an affiliate of BFG’s controlling equity holder (Mr. Dixon). The member consent was drafted by the Goodwin Defendants and stated that a direct subsidiary of BFG would be acquiring the three fitness clubs. These member funds were used to subsidize the purchases and upon closing BFG had not received the clubs because they were sold to three LLC’s in which Mr. Dixon managed and effectively owned. Mr. Dixon then directed BFG to make above market rent payments to the LLC’s which managed the three fitness clubs.  In 2012, Mr. Dixon also transferred profitable BFG clubs for less than full consideration to Newfit, LLC, another LLC effectively owned by him.  Goodwin had drafted that asset transfer agreement. Mr. Dixon also transferred BFG received clubs from Lexfit, LLC (also owned by him) to Newfit. Goodwin drafted that agreement as well.

The Trustee’s causes of action against the Goodwin Defendants included legal malpractice, breach of professional fiduciary duty, breach of contract, violation of Mass. Gen. Laws ch. 93A, § § 2 and 11, and unjust enrichment in the form of attorneys’ fees paid to Goodwin. The Trustee also sought to recover attorneys; fees in the Newfit and Lexfit transactions as fraudulent transfers under MFTA § § 5 and 6 and Bankruptcy Code § 550. Goodwin filed motions to dismiss all counts and moved for partial summary judgment on the fraudulent transfer counts and unjust enrichment count with the Goodwin partner joining in on the motion for partial summary judgment. The former Goodwin partner sought dismissal of all counts against him.


The Goodwin Defendants’ motions to dismiss relating to the 2012 Bally transaction were denied. The Court found unconvincing the Goodwin Defendants’ arguments that claims relating to this transaction were time-barred by the three year statute of limitations governing malpractice under M.G.L. ch. 260, § 4 because BFG should have realized they did not receive the fitness clubs upon closing, their payment of rent for these properties to Mr. Dixon’s LLC’s, and Mr. Dixon’s knowledge of this should be imputed to the other members. The Court agreed with the Trustee that the statute of limitations was tolled under M.G.L. ch. 260, § 12 which governs tolling when a defendant fraudulently conceals a cause of action from the plaintiff. The Court found that because a fiduciary relationship existed between the Goodwin Defendants and BFG, they had a duty to inform BFG members that they were paying for but not acquiring the fitness clubs. The Court also ruled that rental payments were irrelevant because members were not required to make inquiry into non-BFG entities and Mr. Dixon’s knowledge of the transfer should not be imputed to BGF members because under the adverse domination doctrine his knowledge of the transaction was not enough to prevent tolling.

The Court denied the Goodwin Defendants’ motions to dismiss the Trustee’s claims of malpractice, breach of fiduciary duty, violation of M.G.L. ch. 93A, and breach of contract relating to the Newfit and Lexfit transactions.  The Court found unconvincing Goodwin’s arguments that there was no breach of duty because there was no conflict of interest in simultaneously representing BFG and its controlling equity holder, Mr. Dixon, because it is not unlawful and is common for firms to represent an LLC and its controlling equity holder in transactions designed to favor that main equity holder. The Court ruled that the Trustee’s amended complaint states a claim upon which relief can be granted because a duty of undivided loyalty was owed to BFG and they were harmed through lost revenue and club sales to Newfit and Lexfit for less than market value.

The unjust enrichment claim against the former Goodwin partner was dismissed because the claim did not specify that he had received substantial payments from BFG to which he was entitled. The Court ruled that the motion for partial summary judgment on fraudulent transfers under MFTA §§ 5 and 6 and Bankruptcy Code § 550 in the form of attorneys’ fees paid to Goodwin and the partner was premature and denied without prejudice. Goodwin argued that BFG received sufficient value for the transfers in the form of legal services and that the second fee was not paid by BFG. The Court allowed the Trustee to seek additional discovery to determine whether the second payment was in fact from BFG and if sufficient value was given for the transfers.

Read The Full Case Here

Summary Prepared By:

Erica James

New Lawyers Section Liaison to Bankruptcy Law Section

FinTech in the Commonwealth – 3/21/19

FinTech in the Commonwealth: Regulatory and Privacy Considerations
March 21, 2019 @ 12:00 pm to 1:30 pm

From coins and banknotes, to credit cards and ATM machines, “financial technology” has a long history of finding new and betters ways for people to exchange goods and services and leverage their capital. So why (and how) is today’s financial technology “disrupting” the way we save money, pay for services, make investments, and take out loans? This program provides a general overview of financial services in the age of the smartphone, the regulations governing the applications, processes, products and business models known as “FinTech,” and forecasts the challenges of data privacy and artificial intelligence decision-making that entrepreneurs, consumers, and the legal industry will inevitably grapple with in the years ahead.


12th Annual Young Bar Meets Bankruptcy Bench

This is the 12th Annual Young Bar Meets Bankruptcy Bench event. The program introduces law students, clerks, and new bar members to the judges for the United States Bankruptcy Court for the District of Massachusetts, as well as the Clerk of Court, Molly Sharon. The first portion of the program will focus on a panel discussion with practitioners and the judges to discuss common issues and tactics relating to litigating avoidance actions. During the second portion, the judges and Ms. Sharon will general advice for developing a bankruptcy practice in today’s market. The program will conclude with a reception attended by the judges and Ms. Sharon.

Registration Categories:

BBA Member – Free. Included as part of your membership.

Non-Member – $100.00

Sponsoring Section/Committee(s):

• Bankruptcy Law Section

• Financial Services Section


• Hon. Christopher J. Panos, U.S. Bankruptcy Court

• Hon. Elizabeth D. Katz, U.S. Bankruptcy Court

• Hon. Melvin S. Hoffman, U.S. Bankruptcy Court

• Mary “Molly” Sharon, U.S. Bankruptcy Court

• Kathleen R. Cruickshank, Murphy & King

• Jeffrey D. Ganz, Riemer & Braunstein LLP

Click Here to Register for the Event!

Recent case development: Termination of the Automatic Stay – Section 362(c)(3)(A)

Case: Leland S. Smith, Jr. v. Maine Bureau of Revenue Services, No. 18-1573 (1st Cir.)
Opinion by: Circuit Judge Sandra Lynch
December 12, 2018

The debtor filed three bankruptcy petitions under Chapter 13 of the Bankruptcy Code. In December 2016, he filed his third petition just two months after the dismissal of his second filing. This triggered § 362(c)(3)(A) which provides that when a debtor files a bankruptcy petition within one year after the dismissal of a prior petition, the automatic stay will terminate after 30 days if no extension is granted by the court. 11 U.S.C. § 362(c)(3)(A).

Among his debts, the debtor owed $51,596.53 in state taxes, interest, and penalties to Maine’s Bureau of Revenue Service (“MRS”). There was no request for an extension of the stay, and on January 27, the 30-day period had expired. At a February 2017 bankruptcy court hearing, MRS moved for an order pursuant to § 362(j) to confirm the extent to which the stay had been terminated.

The debtor argued that the phrase “with respect to the debtor” in § 362(c)(3)(A) plainly and unambiguously terminates the stay “only as to actions against the debtor and his property, not as to actions against the property of the bankruptcy estate.” Conversely, MRS argued that the scope of § 362(c)(3)(A) is not limited to just the debtor and his property, but that it terminates the stay for all purposes.

The Bankruptcy Court for the District of Maine ruled that the automatic stay had terminated in full, and the U.S. District Court of Maine affirmed that decision. The U.S. Court of Appeals for the First Circuit then reviewed the bankruptcy court’s decision de novo.

In affirming both lower court rulings, the First Circuit held that “§ 362(c)(3)(A) terminates the entire stay thirty days after the filing of a second petition.”

The Court rejected the debtor’s argument that the language of the statute is plain since “the language at issue could have different meanings.” The Court relied on King v. Burwell, which warns courts against rigorous application of interpretive canons—including the plain meaning rule—where provisions may be “inartfully” drafted. King v. Burwell, 135 S. Ct. 2480, 2492 (2015). The Court applied King because § 362(c)(3)(A) is imprecise in that it is a “collection of ‘with respect to’ phrases, and it is not obvious how the phrases relate to each other, or how the phrases connect to other related provisions.”

Since the text of § 362(c)(3)(A), including the phrase “with respect to the debtor,” did not support or completely dispose of either party’s arguments, the Court looked to the “statutory context, and Congress’s intent in enacting the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) and § 362(c)(3)(A).”

The Court opined that in enacting BAPCPA, Congress intended to discourage bankruptcy abuse, in particular bad faith repeat filings for no valid purpose other than to trigger the automatic stay. This outcome, the Court concluded, can best be achieved by reading § 362(c)(3)(A) to terminate the stay in full.

Summary Prepare By:
Carlos Loredo
Candidate for Juris Doctor, May 2019

Read the Full Case Here: