Timothy McKeon

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In a noteworthy decision, the Bankruptcy Appellate Panel for the Ninth Circuit overturned a dismissal of a bankruptcy case, which the lower court had dismissed based on its belief that the landlord debtor was receiving rental income from a marijuana dispensary.  The decision is significant because it holds that a bankruptcy cannot be dismissed simply because of the mere presence of a marijuana business or related proceeds in the case.  Rather, under this decision, the dismissal of a bankruptcy must be supported by specific factual findings that demonstrate that the debtor violated federal law or that the bankruptcy trustee would be required to administer proceeds of a (federally) illegal business.
Continue Reading Dismissal of “Marijuana” Bankruptcy Not Automatic as Bankruptcy Appellate Court Overturns Dismissal of Bankruptcy Case of Landlord Debtor with Dispensary Tenant

The San Francisco District Attorney’s Office has announced that it will retroactively apply Proposition 64, which legalized the possession and recreational use of marijuana in California, to marijuana related misdemeanor and felony convictions dating back to 1975 with immediate effect.  As a result, over 3,000 misdemeanor convictions will be dismissed and sealed, and nearly 5,000 felony convictions will be reviewed and potentially reduced.
Continue Reading San Francisco DA’s Office to Dismiss Thousands of Marijuana Convictions

In a recent article, senior officials with the Department of Justice’s Office of the United States Trustee (the “UST”), the federal government’s watchdog of the bankruptcy system, reaffirmed the department’s position that bankruptcy relief is not available to businesses in the weed industry.  Such a reaffirmation of a well-established policy is not new. However, the article is noteworthy in that it clarifies just how broadly the UST is willing to expand the scope of that policy and that it may prevent “downstream” participants, such as landlords of marijuana dispensaries, from accessing relief under the bankruptcy code.
Continue Reading U.S. Trustee Issues Warning to ALL Participants in the Cannabis Industry: Bankruptcy Relief May Not be Available, So Don’t Let Your Profits Go Up in Smoke