News
In re Kipnis, ___BF___, 2016 Westlaw 4543772 (Bankruptcy Court. S.D. Fla. 2016)
A bankruptcy court in Florida has held that a trustee had the power to borrow the Internal Revenue Service’s 10 year statute of limitations in pursuing fraudulent transfer litigation on behalf of the estate. FACTS: An individual owed back taxes to the Internal Revenue Service. In an attempt to avoid paying those assessments, he allegedly engaged in fraudulent transfers of his assets. Roughly 10 years after those transfers, he filed a bankruptcy petition. His trustee then asserted fraudulent transfer claims against his transferees under 11 U.S.C.A. §544(b). They moved to dismiss on the ground that the claims were time barred,…
Mortgage Servicer Saddled with $375,000 in Sanctions for Violating Rule 3002.1
In In re Gravel, ___BR___ (Bankr. D. Vt. Sept. 12, 2016, case no. 11-10112), the first reported decision of its kind under Bankruptcy Rule 3002.1, Bankruptcy Judge Colleen A. Brown, who is Vermont’s chief bankruptcy judge, imposed $375,000 in sanctions on a mortgage servicer for billing debtors for fees without first filing the required notices under Rule 3002.1(c), which are required to be filed in a Chapter 13 bankruptcy case, by the secured DOT lender, stating any changes in mortgage payment, during the Chapter 13 bankruptcy case. Judge Brown directed that the sanctions be paid to Vermont’s largest pro bono…
Regularly Conducted Tax Sales Cannot Be Fraudulent Transfer, Ninth Circuit Holds
In Tracht Gut LLC v. Los Angeles Country Treasurer & Tax Collector (In re Tracht Gut LLC), ___F.3d ___case no. 14-60007 (9th Cir. Sept. 8, 2016), the Ninth Circuit joined the Fifth and Tenth by holding that a tax sale conducted in accordance with state law cannot be set aside as a fraudulent transfer for less than reasonably equivalent value. A company owned real property but did not pay real estate taxes for years. The company filed a chapter 11 petition a month after the county sold the property in a tax sale. The newly minted debtor in possession immediately…
DeNoce v. Neff (In re Neff), 824 F.3d 1181 (9th Cir. 2016)
The U.S. Court of Appeals for the Ninth Circuit held that the ONE year period of 11 U.S.C.§ 727(a)(2) is not subject to equitable tolling. 11 USC 727(a)92) states that a bankruptcy debtor may be denied a discharge, in a Chapter 7 bankruptcy case, if the debtor transferred property, within ONE year before the date the debtor filed bankruptcy, with an actual intent to hinder, delay or defraud creditors, by making that transfer.
Rivera v. Orange Cnty. Prob. Dep’t (In re Rivera), 832 F.3d 1103 (9th Cir.
Aug. 10, 2016), the U.S. Court of Appeals for the Ninth Circuit held that fees owing to a governmental unit incurred for the criminal detention of a minor child were dischargeable in the chapter 7 bankruptcy of a parent. This was not a domestic support obligation (domestic support obligations are always nondischargeable, per 11 USC 523(a)(5)).
Heller Ehrman LLP, Liquidating Debtor v. Davis Wright Tremaine LLP
Heller Ehrman LLP, Liquidating Debtor v. Davis Wright Tremaine LLP (In re Heller Ehrman LLP), 830 F.3d 964 (9th Cir. July 27, 2016): The U.S. Court of Appeals for the Ninth Circuit certified to the California Supreme Court the question of whether a dissolved law firm has a property interest in hourly fee engagements in progress at the time of its dissolution such that the firm is entitled to compensation from law firms that later complete the work after employing an attorney of the dissolved firm post-dissolution to complete the engagement. The issue underlies the viability of the doctrine of…
The US Supreme Court Granted Certiorari in Czyzewski v. Jevic Holding Corp.
On 6/28/16, the US Supreme Court granted certiorari in Czyzewski v. Jevic Holding Corp., a 2015 Third Circuit Court of Appeals decision, to decide whether bankruptcy courts are allowed to dismiss chapter 11 cases when property is distributed in a settlement that violates the priorities contained in Section 507 of the Bankruptcy Code. Although Jevic deals with structured dismissals, the high court’s decision might also have the effect of allowing or barring so-called gift plans where a secured creditor or buyer makes a payment, supposedly from its own property, that enables a distribution in a chapter 11 plan not in…
Cases from Different Circuits Conflict
Cases from different Circuits conflict, as to whether or not a creditor violates the federal Fair Debt Collection Practices Act (“FDCPA”), by filing a Proof of Claim, in a debtor’s bankruptcy case, that the creditor knows is “time barred” (past the statute of limitations for time period in which creditor must sue, if creditor wants to seek to collect the debt from the debtor who owes the debt. The US Supreme Court will likely eventually rule on this issue: Here are some of the cases in conflict: The Eighth Circuit Court of Appeals held that a debt collector’s filing an…
California Senate Bill S380
California Senate Bill S380 seeks to increase the homestead exemption amounts to $100,000 for a single person; $150,000 for a family or head of household; and $300,000 for those over 65. Under existing law, the homestead exemption is $75,000 for a single person; $100,000 for a family; and $175,000 for a person over age 65, or who is over age 55 with very low income, or who is permanently disabled. The sponsors of S380 expect the California Senate to vote on the bill in the next few weeks. It is unknown at present whether this bill will become law or…
Sponsoring of the California Bankruptcy Forum Annual Continuing Legal Education Conference
The Bankruptcy Law Firm, PC was a sponsor of the California Bankruptcy Forum annual continuing legal education Conference, for lawyers and other bankruptcy professionals, held on May 22-22, 20016 in Indian Wells, California