News
In re Stockton municipal bankruptcy case, 4/1/13 Ruling of Bankruptcy Judge Christopher Klein, ruling that City of Stockton Is Eligible to be in Chapter 9 (Municipal) Bankruptcy
On Monday, April 1, 2013, U.S. Bankruptcy Judge Christopher Klein of the Eastern District of California ruled the City of Stockton to be eligible for chapter 9 bankruptcy protection and issued the Order for Relief necessary for the case to proceed pursuant to Bankruptcy Code §921(d). The decision came nine months after the city initially filed for bankruptcy and followed a three-day evidentiary hearing pitting the city against the Capital Markets Creditors who represent the holders of tens of millions of dollars in municipal bonds. The bondholders had argued, among other things, that the city was not eligible for bankruptcy…
New Bankruptcy Court Decision about law firm that filed bankruptcy
New Bankruptcy Court Decision about law firm that filed bankruptcy: Heller Ehrman LLP, Liquidating Debtor v. Jones Day (In re Heller Ehrman, LLP), Bankr. Case No. 08-32514DM, Adv. No. 10-3221DM (Bankr. N.D. Cal. March 11, 2013). Summary: Judge Dennis Montali, of the Bankruptcy Court for the Northern District of California, recently granted partial summary judgment in favor of the plaintiff debtor, a dissolved law firm, on the basis that the debtor’s waiver of rights under Jewell v. Boxer, 156 Cal. App. 3d 171 (1994) constituted an avoidable transfer under 11 U.S.C. section 548 and the California Uniform Fraudulent Transfer Act,…
O’Donnell, et. al. v. Tristar Esperanza Properties, LLC (In re Tristar Esperanza Properties, LLC)
The U.S. Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") held that a judgment awarding the value of a withdrawing member’s interest in an LLC constitutes “damages arising from the purchase or sale of… a security” under 11 U.S.C. § 510(b), and therefore is vulnerable to mandatory subordination. O’Donnell, et. al. v. Tristar Esperanza Properties, LLC (In re Tristar Esperanza Properties, LLC), BAP No. CC-12-1340-KlPaDu (9th Cir. BAP Mar. 8, 2013). To read the opinion, click here: (Tristar) http://cdn.ca9.uscourts.gov/datastore/bap/2013/03/08/Tristar12-1340.pdf
Split Among Court Decisions re whether or not the absolute priority rule applies in an individual Chapter 11 case and individual Chapter 11 plan
The United States Court of Appeals for the Tenth Circuit (the "10th Circuit") has held that, notwithstanding the BAPCPA’s amendments to the Bankruptcy Code, individual chapter 11 debtors must still comply with the absolute priority rule (adopting the so-called "narrow view"). Dill Oil Company, LLC v. Arvin E. Stephens (In re Stephens), 704 F.3d 1279 (10th Cir., Jan. 15, 2013). To view the full decision, click: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/01018983694.pdf. Facts The debtors, Mr. and Mrs. Stephens (the "Stephens"), owned a chain of convenience stores and filed a voluntary individual chapter 11 case because the stores were operating at a loss. The Stephens…
Pursuant to 11 USC 523(a)(8), student loan debt
Pursuant to 11 USC §523(a)(8), student loan debt– as defined by that Section (which is almost all student loan debt, whether loan is by government, by a school directly, or by a bank)–is only dischargeable in bankruptcy if the debtor brings an adversary proceeding, in the debtor’s bankruptcy case, and wins that adversary proceeding, by proving that it would be an undue hardship on the debtor, or on debtor’s dependents, if debtor had to repay student loan debt the debtor owes, over the debtor’s whole remaining working life. It has been reported in the news that about 1/4 of all…