Andrew Ewalt's Law Blog

We Have A Nominee

President Bush has nominated Judge John G. Roberts, to fill the Supreme Court vacancy left by retiring Judge Sandra Day O’Conner.   Judge Roberts, 50, was appointed to the US Court of Appeals for D.C Circuit in 2003 by President George W. Bush.  Previously, he practiced law in Washington and was the principal deputy solicitor general in the first Bush administration, helping formulate the administration’s position in Supreme Court cases.  Roberts attended Harvard College and Harvard Law School, clerked for Justice William H. Rehnquist on the Supreme Court and has argued frequently before the court.  The question now seems what will be Roberts’s impact on the court.  At age 50 he could reshape the court.  Unfortunately, since Roberts’ record is rather thin it will be hard to know for certain until he begins to decide cases. That is if he is confirmed.  Only time will tell. 

Major Changes In Bankruptcy Will Effect Small Business

Recent reforms to United States Bankruptcy Law is likely to alter how small businesses file for bankruptcy after October 1, 2005 when the new law goes into effect.

Here are some of the changes facing small business:

1. Creditors have more defenses against court orders from newly bankrupt firms for return of payments made within 90 days of filing.
2. Businesses have a stricter deadline to file a reorganization plan before creditors submit their own demands for repayment.
3. Creditors are able to reclaim unpaid-for shipments made within a month and a half, instead of three weeks, of filing.

One interesting omission in the new law is how the courts should treat entrepreneurs who invest in their own business. When a business owner uses her own credit card to partially fund a business, it is unclear, for example whether she can declare herself a creditor if the firm fails and she files for bankruptcy.

Another question involves home-based businesses, in which furniture and supplies (for example) are not always so neatly classified as business-use only, separating business from personal debt could become a big issue.  Courts may have a hard time determining who is really a commercial debtor and who is a personal debtor in this type of case.

How all of these new rules are going to play out is going to be an interesting process.