CBA Record

Y O U N G L A W Y E R S J O U R N A L

ing, as that is what would happen under the Bankruptcy Code’s priority scheme in any event. It is not difficult to imagine a situation where the Real Estate was under contract, but the Equipment and Crops were sold first (and both FCB and WCFS could recover in full). In theory, this would be a situation where the Bankruptcy Court may have allowed marshaling. Yet, it is also not difficult to imagine a situation where the Real Estate is not sold pursuant to that contract and ends up selling for an amount that could no longer make both FCB and WCFS whole. Unfortunately, the Seventh Circuit declined to hear an appeal of Fer- guson III on appellate jurisdiction grounds because the District Court’s ruling was not a final order; the District Court ruled on the “issue” of whether marshaling was appropriate, not the “dispute” of “[w]ho gets how much money.” Practical Considerations There are a great number of considerations which must be made when counseling a client who receives a notice of bankruptcy

the unsecured creditors in Ferguson are likely to receive pennies on the dollar. However, a detailed and reasonable marshaling request may be the difference to a junior or under- secured creditor from receiving a pro rata distribution and exercising its rights as a secured lender. Sean P. Williams is an associate with Gold- stein & McClintock LLLP and represents debtors, creditors’ committees, and purchasers of assets in bankruptcy courts throughout the nation. Alex J. Whitt is an associate with Hiltz & Zanzig LLC representing busi- nesses and individuals in bankruptcy and reorganization matters. E. Philip Groben is an associate with Gensburg Calandriello & Kanter, P.C. and represents debtors, secured and unsecured creditors, and equity interests in bankruptcy proceedings, commercial litiga- tion, and non-bankruptcy workouts.

filing. If your client is a junior secured creditor who may suffer through a senior lender’s foreclosure, then a marshaling claimmay be appropriate. However, as Fer- guson I demonstrates, an often-overlooked aspect to a motion to enforce marshaling upon a senior creditor is the potential for prejudice to the senior creditor. Ferguson I was clear in that prejudice would exist in a court forcing the senior lender to accept the risk associated with payments over time considering the senior creditor could otherwise simply satisfy its claims through foreclosure upon its security interests. A successful marshaling request must not only demonstrate why the petitioning creditors will be benefited, but also why the request for relief will not prejudice the senior creditors. For this reason, a creditor must not only understand the relative priority of its security interests, but must also ascertain the debtor’s intention as to the collateral secur- ing those interests. It is difficult to imagine that any creditors, other than FCB and the IRS, got what they wanted in Ferguson . As is often the case in bankruptcy proceedings,

Young Lawyers Section Member Survey We Asked, You Answered!

We recently sent out a survey asking Section members what you want from the CBA…and you answered! Here are some of the key responses and ways the Section plans to implement your suggestions into future programming:

65% asked for more networking opportunities.

56% asked for evening educational events. Young lawyers are busier

70% value our career services and want more. In addition to career counseling, an online job board, and career events, the Section hopes to add more on demand video and events

In 2017-2018 we will look to host even more practice area committee meetings and receptions, round table events, and socials at a variety of times during the day to meet your schedule.

than ever before and find it hard to get away at lunchtime. Watch for

evening (after 5 p.m.) CLE and committee meeting opportunities coming this Fall.

to help young lawyers take the next step in their careers.

Get involved today! CLE, practice area committees, networking/social events, volunteer opportunities, career events and more. www.chicagobar.org/yls

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