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PC / Ivory Vellum Carnival 35x23 / 80PRATT’S JOURNAL OF BANKRUPTCY LAWLEXISNEXIS A.S. PRATT JULY/AUGUST 2021EDITOR’S NOTE: THE SUMMER READING ISSUEVictoria Prussen SpearsVOLUME 17 NUMBER 5THE NEED FOR CLARITY REGARDING THE CLASSIFICATION AND VALUATION OFCRYPTOCURRENCY IN BANKRUPTCY CASESBrad M. Kahn, Rachel Biblo Block, and Joseph E. SzydloSOVEREIGN DEBT EVOLUTION: THE NATURAL DISASTER CLAUSESui-Jim Ho and Stephanie FontanaTHIRD CIRCUIT DEFINITIVELY REJECTS TRIANGULAR SETOFFJacob A. Adlerstein, Robert Britton, John Weber, and Alice NofzingerTHE HUNSTEIN EFFECT: EXAMINING THE ELEVENTH CIRCUIT’S RULING ANDWHAT’S NEXT FOR DEBT COLLECTORS AND THEIR THIRD-PARTY SERVICEPROVIDERSWayne Streibich, Nicole R. Topper, Scott E. Wortman, and Anthony Richard YanezTO VOTE OR NOT TO VOTE: COURT HOLDS THAT “OUT OF MONEY” JUNIORCREDITOR IS BARRED FROM OBJECTING TO PLANIngrid Bagby, Michele C. Maman, and Thomas J. CurtinJULY/AUGUST 2021TO FORGIVE OR NOT TO FORGIVE A N.Y. CPLR 3215(c) VIOLATION IN ARESIDENTIAL MORTGAGE FORECLOSUREAndrew B. Messite and Kerren B. ZinnerANTICIPATED REFORM OF THE RUSSIAN INSOLVENCY SYSTEMPolina Lyadnova and Ksenia ObidinaDate: 6/08/2021 Page Count: 60 PPI: 340 Spine width: 0.1765 in

Pratt’s Journal of BankruptcyLawVOLUME 17NUMBER 5July/August 2021Editor’s Note: The Summer Reading IssueVictoria Prussen Spears225The Need for Clarity Regarding the Classification andValuation of Cryptocurrency in Bankruptcy CasesBrad M. Kahn, Rachel Biblo Block, and Joseph E. Szydlo228Sovereign Debt Evolution: The Natural Disaster ClauseSui-Jim Ho and Stephanie Fontana246Third Circuit Definitively Rejects Triangular SetoffJacob A. Adlerstein, Robert Britton, John Weber, andAlice Nofzinger257The Hunstein Effect: Examining the Eleventh Circuit’sRuling and What’s Next for Debt Collectors and TheirThird-Party Service Providers the Reach of Its CreditorsWayne Streibich, Nicole R. Topper, Scott E. Wortman, and AnthonyRichard Yanez260To Vote or Not to Vote: Court Holds That “Out ofMoney” Junior Creditor Is Barred from Objecting to PlanIngrid Bagby, Michele C. Maman, and Thomas J. Curtin263To Forgive or Not to Forgive a N.Y. CPLR 3215(c)Violation in a Residential Mortgage ForeclosureAndrew B. Messite and Kerren B. Zinner270Anticipated Reform of the Russian Insolvency SystemPolina Lyadnova and Ksenia Obidina274

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The Hunstein Effect: Examining the EleventhCircuit’s Ruling and What’s Next for DebtCollectors and Their Third-Party ServiceProvidersBy Wayne Streibich, Nicole R. Topper, Scott E. Wortman,and Anthony Richard Yanez*The U.S. Court of Appeals for the Eleventh Circuit has delivered a novel and highlyconsequential interpretation of the Fair Debt Collection Practices Act that is potentiallytransformative for debt collectors and their third-party service providers.In Hunstein v. Preferred Collection and Management Services, Inc.,1 the U.S.Court of Appeals for the Eleventh Circuit issued a decision on a case of firstimpression, finding that a debt collector’s transmittal of a consumer’s personalinformation to its letter vendor constituted a prohibited third-party communication “in connection with the collection of any debt” within the meaning ofSection 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”).As discussed below, this ruling has broad ranging ramifications for theaccounts receivable management industry and will likely foster a new wave oflitigation under the FDCPA.BACKGROUNDBy way of background, this lawsuit originated from unpaid bills for medicaltreatment at a hospital. The hospital assigned the unpaid bills to a debt collectorthat had contracted with a third-party vendor for printing and mailing itscollection letters. The collector electronically transmitted to its vendor certaininformation about the plaintiff/debtor such as:(1)His status as a debtor;(2)The exact balance of his debt;(3)The entity to which he owed the debt;(4)That the debt concerned his son’s medical treatment; and*Wayne Streibich (wstreibich@blankrome.com), Nicole R. Topper (ntopper@blankrome.com),and Scott E. Wortman (swortman@blankrome.com) are partners at Blank Rome LLP. AnthonyRichard Yanez (ayanez@blankrome.com) is an associate at the firm. Messrs Streibich, Wortman,and Yanez practice in the firm’s Financial Services Litigation & Compliance. Ms.Topper is amember of the firm’s Litigation group.1994 F.3d 1341 (11th Cir. 2021).260

EXAMINING THE ELEVENTH CIRCUIT ’S HUNSTEIN RULING(5)His son’s name.The vendor then used that information to generate and send a dunning letterto the debtor.The debtor received the dunning letter and then filed a lawsuit in the MiddleDistrict of Florida alleging violations of both the FDCPA and the FloridaConsumer Collection Practices Act.The district court dismissed the lawsuit for failure to state a claim byconcluding that the debtor had not sufficiently alleged that the collector’stransmittal of information to the letter vendor was a communication “inconnection with the collection of a debt.” The debtor then appealed to theEleventh Circuit.THE ELEVENTH CIRCUIT RULINGBefore addressing the merits of the claim, the Eleventh Circuit concludedthat a violation of Section 1692c(b) gives rise to a concrete injury under ArticleIII of the Constitution, thus finding that the plaintiff had standing to bring thislawsuit. The Eleventh Circuit then turned its focus onto whether the allegedcommunication was “in connection with the collection of a debt” such that itviolated section 1692c(b). Notably, the parties agreed that the collector’stransmittal of information to the letter vendor constituted a “communication”within the meaning of the FDCPA.Other than referring to the parties’ agreeability as “helpful,” the decision doesnot provide insight into the context nor explicate the specific definition andapplication agreed upon. In conjunction with this agreed upon interpretation of“communication,” the Eleventh Circuit deployed a quiescent textual view of theSection 1692c(b) phrase, “in connection with the collection of any debt”finding that the phrase “has a discernible ordinary meaning” that “must meansomething more than a mere demand for payment.”Consequently, because the defendant’s transmittal of the plaintiff ’s personaldebt-related information to a letter vendor constituted a communication “inconnection with the collection of any debt” the Eleventh Circuit concluded thatthe plaintiff adequately stated a claim under Section 1692c(b).In its decision, the Eleventh Circuit acknowledged the gravity of its rulingand that it “runs the risk of upsetting the status quo in the debt-collectionindustry.”We presume that, in the ordinary course of business, debt collectorsshare information about consumers not only with dunning vendorslike Compumail, but also with other third-party entities. Our reading261