The Bankruptcy Law Firm, Prof. Corp.
9th and 4th Circuit Both Hold: Old Bankruptcies Aren’t Grounds for Removal to Federal Court
This month, two circuits found no ‘related to’ bankruptcy jurisdiction for climate-change lawsuits against energy companies, and therefore held those climate change suits could NOT properly be removed to Bankruptcy Court. On 4/19/22 the Ninth Circuit Court of Appeals held, in County of San Mateo v. Chevron Corp., ___F.4th___ (9th Cir. April 19, 2022), appeal No. 18-15499, that a climate change suit was not properly removed from nonbky court to bankruptcy court. That was the second time in 12 days, a circuit court has held that a chapter 11 plan confirmed by an energy company doesn’t permit multinational oil companies…
Bechkart v. Newrez LLC, ___F.4th___ (US 4th Circuit Court of Appeals, 4/15/22 decision) appeal 21-1838
Bechkart v. Newrez LLC, ___F.4th___ (US 4th Circuit Court of Appeals, 4/15/22 decision) appeal 21-1838: Decision holds that reliance on advice of counsel is not a complete defense (but is relevant to defense of creditor), when a bankruptcy debtor moves to have creditor held in civil contempt, for allegedly violating the debtor’s bankruptcy discharge, and that. Taggart US Supreme Court case applies to all contempt motions citations in bankruptcy court. However, the Richmond, Va.-based appeals court held that advice of counsel is not a complete defense to civil contempt in bankruptcy court. A couple filed a chapter 11 petition after…
Censo LLC v. Newrez LLC (In re Censo LLC),___BR___ 21-1125 (B.A.P. 9th Cir. April 5, 2022): BAP Describes When a Nonbankruptcy Court’s Order or Judgment, entered AFTER bankruptcy is filed, Does, or Does Not, Violate the bankruptcy automatic Stay
If a proposed Order or proposed Judgment has been submitted to a non-bankruptcy court, but the non-bankruptcy court (such as California Superior Court, or a US District Court), has not yet signed and entered that Order or Judgment, by the date that the party the order or judgment will be against, when entered, files bankruptcy, is the non-bankruptcy court entering the Order or Judgment, after the party the Order or Judgment will be against, when entered, a violation of the bankruptcy automatic stay (11 USC §362(a)). And is the entered Order or Judgment, entered AFTER the bankruptcy is filed, void…
DC Solar owner Jeff Carpoff was sentenced to 30 years in federal prison in connection with defrauding investors
American Bankruptcy Institute (“ABI”) reports that In the fall of 2021, DC Solar owner Jeff Carpoff was sentenced to 30 years in federal prison in connection with defrauding investors (and taxpayers) out of over $2B through a Ponzi scheme involving favorable tax credits that incentivize investments in sustainable energy. The fraud, described by the Department of Justice as “the largest criminal fraud scheme in the history of the Eastern District of California” was uncovered shortly after a Christmas 2018 government raid on DC Solar’s headquarters which caused the company to file a Chapter 11 bankruptcy case, in Bankruptcy Court, Eastern…
Biden Aims to Expand Access to Student-Loan Debt Forgiveness for Millions of People
The Biden administration said it plans to make it easier for lower-income student-loan borrowers to get debt forgiveness through an existing program that has enrolled millions of people, but provided few with relief, the Wall Street Journal reported. The move, announced by the Education Department on Tuesday, is part of a politically sensitive debate on the forgiveness of student-loan debt and attempts to more broadly overhaul how the student-loan repayment system works. President Biden earlier this month extended to Aug. 31 a pandemic-related pause on payments of federal student loans and faces pressure from progressive members of his own party…
In Guevarra v. Whatley (In re Guevarra)
In Guevarra v. Whatley (In re Guevarra), ___BR___, 2021 WL 1179619 (BAP 9th Cir. Mar. 29, 2021), the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) vacated the bankruptcy court’s decision. Bankruptcy Court had sustained the chapter 7 Trustee’s Objection to debtor having used the CA CCP 703.140(b)(5) “wild card” exemption to exempt proceeds from selling a house, up to the approximately $30,000 limit of the “wild card” exemption. The bankruptcy court’s ruling was based on the grounds that debtor had not acted good faith when debtor claimed the wild card exemption. However, the BAP remanded to the bankruptcy court, so…
Democrats Press Biden to Extend Freeze on Student Loan Payments
American Bankruptcy Institute on 03/25/22 reports: Democrats in Congress are pressing the Biden administration to extend the suspension of student loan payments before it’s set to expire May 1 as they seek to avoid cutting off a pandemic-induced benefit in the middle of an election year, The Hill reported. The federal student loan payments suspension has already been extended five times throughout the COVID-19 pandemic since it began under former President Trump in March 2020. That means millions of people who owe student loans to the federal government haven’t been required to make payments on their debt in two years,…
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141: Ninth Circuit BAP (Bankruptcy Appellate Panel) holds Debtor Can’t Be Punished for Shifting Legal Theories, to amend exemptions claimed by debtor in debtor’s bankruptcy case, after Bankruptcy Judge rules debtor’s originally claimed exemptions With regard to exemptions, a debtor can’t be punished for dramatically shifting legal theories regarding exemptions claimed, in response to an unfavorable decision by the bankruptcy court. That’s the teaching of a March 25 opinion for the Ninth Circuit Bankruptcy Appellate Panel by Bankruptcy Judge Gary A. Spraker. The opinion…
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022)
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022): The 9th Circuit Bankruptcy Appellate Panel (BAP) ruled that when a claim is subordinated, pursuant to 11 USC §510(b), that any liens and encumbrances securing the claim that is subordinated, are subordinated as well. This is a significant decision, because it means subordination of a claim pursuant to Section 510(b) would also subordinate liens and other encumbrances.
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022)
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022): Second Circuit Court of Appeals is First Appeals Court to Hold that Small Business Administration was allowed to bar bankruptcy Debtors from Receiving PPP Loans On an issue where the lower courts are divided, the Second Circuit became the first court of appeals to rule that a “loan” under the Paycheck Protection Program, “as a matter of law, . . . is a loan guaranty program and not an ‘other similar grant,’ and thus is not covered by [the antidiscrimination…