What is happening here is on a level of being as disturbing as when the Courts permitted the Government to violate the Uniform Commercial Code several years back…when it abrogated the rights of the senior, secured creditors of Chrysler and General Motors.
In a word, courts are permitting trustees to claw back tuition payments parents make to colleges in cases where the parents have become bankrupt.
We will make allowance for clawbacks in cases where the colleges had complete financial information on parents and where it can be reasonable for the college to conclude that the parents were insolvent at the time of the payment or that the payment would render them insolvent. But, that’s it. Other than that, the rest of this is nonsense and is very disturbing.