May 03, 2021

What We’re Reading This Week [May 3, 2021]


Bloomberg reported that USA Gymnastics asked the Southern District of Indiana Bankruptcy Court to enforce the automatic stay and enjoin litigation filed by four plaintiffs seeking to hold the US Olympic & Paralympic Committee (USOPC) liable for sexual abuse committed by convicted child sexual predator Larry Nassar.  USA Gymnastics said allowing the litigation to proceed would be disruptive to its chapter 11 proceedings and its settlement talks with survivors.  In its motion to enforce the automatic stay, USA Gymnastics argued that the claims against the USOPC are property of its estate because they are general and common among its creditors, which include over 500 survivors of Nassar’s abuse.  The plaintiffs objected to enforcement of the stay with respect to their lawsuit against the USOPC, arguing that their claims are not general and common, but rather personal and particularized such that they are not estate property and should be allowed to proceed.  A hearing was held on April 28, and a ruling is pending.  [Bloomberg; April 27, 2021]

After facing opposition from California state regulators, Law360 reported that Lambda School agreed to strike language suggesting that students might not be able to wipe out their income-tied tuition repayment agreements in bankruptcy.  Lambda School, a San Francisco-based online coding school that offers many tech and web-based courses, allows students to pay no tuition until after they start earning money post-graduation.  According to the California Department of Financial Protection and Innovation, the repayment agreements falsely stated they were qualified education loans subject to the dischargeability limits of the Bankruptcy Code.  [Law 360; April 26, 2021]

Bloomberg reported that more than 700,000 small businesses in the United Kingdom are facing serious cash flow shortages.  The number of small- and medium-sized companies facing financial distress is up 15 percent from the end of last year, putting an estimated 3.2 million jobs at risk.  [Bloomberg; April 28, 2021]

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