Island Law Blog

Thursday, March 14, 2013 - 04:33

How do you protect your business if you are a fisher, farmer or rancher in the state of Hawaii, and your business is having financial difficulties? It is important to know that there are ways out of your struggles. Bankruptcy is an institution that is there for you to help you start fresh and make your business viable. Keeping control of your business operation is key to your success and you can do it with the protection offered by federal law...

Friday, March 1, 2013 - 08:01

In the early 1980s, as with homeowners in the recent foreclosure crisis, many farmers in the heart of the farm land bubble were faced with loans whose face value exceeded the current market value of the real estate serving as collateral for the loan. They were figuratively under water. Many farmers, like many homeowners now, were in danger of losing their primary residences, with little prospect of relief under the bankruptcy options available to farmers at that time. As is the case today, Chapter 13 did not allow for the modification of debt secured by a primary residence. Chapter 11 involved...

Monday, February 25, 2013 - 08:07

When a family farm or commercial fishing operation is facing bankruptcy and the debtor deals with it in a timely fashion by filing for Chapter 12 bankruptcy, part of the Chapter 12 process is the automatic appointment of a trustee to oversee the debtor’s compliance with the law and rules and assure creditors that the debt management plan is followed. Although the Chapter 12 debtor has the overall controlling authority to operate the day-to-day management of the farm or fishing business, Chapter 12 still requires that a trustee be appointed. The trustee receives a small percentage of the plan payment. While the farmer remains in control of the operations and property, the trustee...

Tuesday, February 19, 2013 - 08:07

Facing financial difficulty can be one of the most stressful experiences of a family’s life, especially for people who have made their living by the sweat of their brow. But for many families and individuals who make their living by farming or fishing in the State of Hawaii, there is the saving grace of Chapter 12 Bankruptcy. Chapter 12 allows...

Tuesday, February 12, 2013 - 08:06

For those involved in agribusiness in the State of Hawaii, farmers and fishers, in particular, facing financial stress can seem like an overwhelming experience. But the creation of Chapter 12 bankruptcy in 1986 was a lifeboat for farmers, and later in 2005 for fisherman, who needed to reorganize their debt to stay in business. But who is eligible for Chapter 12? Congress clearly intended to...

Tuesday, February 5, 2013 - 08:05

For purposes of seeking federal protection from creditors, a “farming operation” is defined in 11 U.S.C. section 101(21) as “including farming, tillage of the soil, dairy farming, ranching, production or raising of crops, poultry, or livestock, and production of poultry or livestock products in an unmanufactured state.” Courts have struggled with the definition over the years and have determined that the word “operation” requires that the farmer, whether a natural person or a stockholder relative of a family-owned operation, must be actively involved in the day-to-day management of the farming business. For example...

Wednesday, January 30, 2013 - 08:05

In the State of Hawaii, a farmer or fisherman that needs protection from creditors should seriously consider Chapter 12 bankruptcy while the business is still a viable operation. If you wait too long to restructure your debt through the federal bankruptcy system, you may create problems that could stand in the way of a successful Chapter 12 plan; the plan that would allow for the adjustment of debts. In order to benefit from Chapter 12, consulting with an attorney is vitally important, because an experienced Hawaii bankruptcy attorney can do the analysis necessary to determine if...