Douglas J. Smillie

Douglas J. Smillie

Co-Chair, Litigation & Trial Practice

Commercial Litigation & Trials • Bankruptcy & Creditors’ Rights • Shareholder Disputes and Business Litigation • Employment, Non-Competition and Trade Secrets • First Amendment and Media Law

Douglas J. Smillie
Apr. 11, 2023

Supreme Court Interprets Bankruptcy Code: Fraudulent Debt Cannot Be Discharged

“Filing for Chapter 11” is a term many Americans know from news headlines when a business reorganizes due to bankruptcy. The Bankruptcy Reform Act of 1978 sought to establish a uniform law to govern the relationship between creditors and debtors when debtors, whether individuals or corporations, cannot repay their debts; in 1979, this became U.S. […]

Douglas J. Smillie
Feb. 1, 2021

Supreme Court Ends Debate Over Bankruptcy Question

In October of 2019, the Court of Appeals for the Third Circuit issued a decision addressing an often-asked question in bankruptcy: whether it is a violation of the automatic stay to retain a vehicle that was repossessed pre-bankruptcy? The Court of Appeals answered in the negative, as addressed in this article, posted on this site […]

Douglas J. Smillie
Dec. 11, 2019

Court of Appeals Answers FAQ Concerning Auto Repossession and Bankruptcy  

A familiar circumstance in consumer bankruptcies is that a borrower becomes delinquent on an automobile loan and fails to address the situation – until the automobile is repossessed. The consumer then seeks bankruptcy representation, and then seeks (usually through counsel) the return of the vehicle. Lenders struggle with the facts that the loan is in […]

Douglas J. Smillie
Aug. 2, 2018

Court Holds Non-Collusive Sheriff’s Sale Not a Preferential Transfer

In an Opinion dated July 19, 2018, the Third Circuit Court of Appeals held that a transfer of property pursuant to a non-collusive sheriff’s sale is not a preferential transfer under Section 547 of the Bankruptcy Code. Under the Bankruptcy Code, certain transfers of property, or of a Debtor’s interest in property, can be avoided […]

Douglas J. Smillie
Sep. 13, 2017

Courts Continue to Award Damages for Stay Violations

  I recently reported on the Third Circuit Court of Appeals’ decision in In re Lansaw, in which the Court upheld the imposition of sanctions, including the award of emotional distress damages, for violations of the automatic stay. I suggested that creditors be guided accordingly. Despite the clear signals from the Courts, stay violations continue and the […]

Douglas J. Smillie
Sep. 6, 2017

Appeals Court Allows Final Chapter 13 Payment Beyond 60 Months

Few things in life are certain. Death. Taxes. Chapter 13 plan payments must be completed within 5 years. But wait – the Third Circuit Court of Appeals recently held that a Chapter 13 Debtor can receive a discharge, even if the final plan payment is made after 60 months. In a case of first impression […]

Douglas J. Smillie
Aug. 22, 2017

Pennsylvania Superior Court Holds Diversion to Bankruptcy Court Eliminates Dragonetti Act Claim

The Pennsylvania Superior Court has held that the removal of a state law claim from the state courts to the federal bankruptcy court pre-empted the defendants’ subsequent suit under the Dragonetti Act for wrongful use of civil proceedings. The facts are summarized as follows: Landlord commenced an action against Law Firm and its partners for […]

Douglas J. Smillie
Jun. 23, 2017

Supreme Court Rules Filing a Stale Claim is not an Unfair Debt Collection Practice

On May 15, 2017, the Supreme Court resolved a split among the Circuit Courts of Appeals, holding that the filing a time-barred / stale claim does not violate the Fair Debt Collection Practices Act. Midland Funding v. Johnson (U.S. May 15, 2017). The Fair Debt Collection Practices Act, 15 U. S. C. §§1692 et seq., […]

Douglas J. Smillie
May. 30, 2017

Emotional Distress Damages Upheld for Stay Violation

The current Bankruptcy Code went into effect on October 1, 1979. One of the fundamental provisions of the Bankruptcy Code is the automatic bankruptcy stay which, as its name implies, automatically halts almost all collection activity against the debtor and the debtor’s property. Even though the law has been around for close to 40 years, […]

Douglas J. Smillie
May. 17, 2017

Third Circuit Weighs in on Dischargeability of Late Filed Tax Debts

In a recent decision, the Third Circuit Court of Appeals determined whether Internal Revenue Service Forms 1040, filed after the IRS has made an assessment of the taxpayer’s liability, constitute “returns” for purposes of determining the dischargeability in bankruptcy of tax debts under 11 U.S.C. § 523(a)(1)(B).  In plain language, the question before the Court […]