The Bankruptcy Law Firm, Prof. Corp.
In re Moore
As discussed in In re Moore, a recent Bankruptcy Court decision, cases and bankruptcy treatises are split on the question of whether or not a debtor who proposes a Chapter 13 plan which provides to pay 100% of what debtor owes to general unsecured creditors, is NOT entitled to have the Bankruptcy Judge confirm (aka approve) the Chapter 13 Plan, so it goes into effect, binding debtor and creditors, unless the Plan provides to pay general unsecured creditors interest, on their general unsecured claims, over the life of the Chapter 13 Plan,where the Debot is not devoting all the debtor’s…
Jackson v. Le Centre On Fourth LLC (In re Le Centre On Fourth LLC), ___F4th___ (11th Cir. Nov. 15, 2021), appeal No. 20-12785
11th Circuit Court of Appeals expands Espinosa case reasoning, to say that a debtor’s failure to give notice–as required by FRBP Rule 2002(c)(3)–to creditors, that the bankruptcy debtor’s proposed plan would give releases to non-debtor third parties, not just to the bankruptcy debtor, is NOT fatal, so long as the proposed Plan was served on all creditors, and the Plan stated that the Plan, if confirmed, would give release to non-debtor third parties, not just to debtor. The 11th Circuit decision said Circuit was analogizing to the reasoning of the Espinosa case.
Bankruptcy Venue Reform Act
The American Bankruptcy Institute 11/10/21 e-newsletter reports that: A Bipartisan Coalition of Attorneys General Support the US Congress passing, and President Biden signing into law, the Bankruptcy Venue Reform Act The National Association of Attorneys General (NAAG) sent a letter yesterday to Congress signed by 43 attorneys general in support of the Bankruptcy Venue Reform Act of 2021. Venue reform has long been needed, to require corporations, LLCs and partnerships to file bankruptcy in the State which is the principal place of business of the corporation, LLC or partnership, instead of having the option of filing bankruptcy in the State…
Stuart v. City of Scottsdale (In re Stuart), ___BR___ (B.A.P. 9th Cir. Nov. 10, 2021, appeal No. 21-1063): Creditor which obtained an attachment before the debtor filed bankruptcy, has NO Duty to Release that Attachment, when debtor files bankruptcy, holds 9th Circuit BAP, relying on the US Supreme Court Fulton case
The BAP decision may have a hint that failure to stop proceedings after bankruptcy can be an automatic stay violation, even after Fulton. Concluding that the Supreme Court’s Fulton decision overruled prior Ninth Circuit authority, the Ninth Circuit Bankruptcy Appellate Panel held that a creditor no longer violates any provision of the automatic stay in Section 362(a) by maintaining the status quo and declining to vacate a prepetition attachment. While the decision under Section 362(a)(3) is no surprise given that Fulton addressed the same subsection, the November 10 BAP opinion is noteworthy for finding no stay violations under any other…
In re Summit Financial Inc.
In re Summit Financial Inc., ___BR___ (Bankr. C.D. Cal. Nov. 5, 2021, bankruptcy case number 21-12276): Bankruptcy Court (Bankruptcy Judge Scott Clarkson) held it is improper for debtor’s attorney to put a “Disclaimer” on Debtor’s bankruptcy Schedules and Statement of Financial Affairs, because the “Disclaimer” contravened the debtor’s statutory obligation to update its schedules and statement of affairs. Judge Clarkson ruled that a debtor and debtor’s attorney cannot disclaim responsibilities that the bankruptcy debtor (and the bankruptcy debtor’s attorney) owe pursuant to the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (here the debtor’s statutory obligation to update its…
In re Stevens, ___F.4th___(9th Cir. 2021)
In re Stevens, ___F.4th___(9th Cir. 2021) issued on 10/19/21, is important, because it holds that where a bankruptcy debtor lists a lawsuit (in which debtor is the plaintiff) in debtor’s Statement of Financial Affiars, but does NOT list the lawsuit in the debtor’s Asset Schedule (Schedule A/B), that the lawsuit is NOT abandoned back to the debtor, when the Bankruptcy Court closes debtor’s bankruptcy case. Note that assets that are accurately listed, in the bankruptcy debtor’s schedule A/B (asset schedule) are abandoned back to the debtor, per 11 USC 521(a), when the Bankruptcy Court closes the debtor’s bankruptcy case, if…
Wigley v. Lariat Cos. (In re Wigley), ___F.4th___, 20-3132 (8th Cir. Ct. of Appeals, 10/18/21)
Wigley v. Lariat Cos. (In re Wigley), ___F.4th___, 20-3132 (8th Cir. Ct. of Appeals, 10/18/21): The cap on a so-called landlord claim under Section 502(a)(6) does not prevent the court from barring discharge of the claim under Section 523(a)(2)(A), even if the reduced claim was paid in an individual’s chapter 11 plan, according to this10/18/21 decision of the Eighth Circuit Court of Appeals.
Mass Evictions Didn’t Result After U.S. Ban Ended, Despite Fears
When the federal moratorium on evictions ended in August, many feared that hundreds of thousands of tenants would soon be out on the streets. More than six weeks later, that hasn’t happened, the Wall Street Journal reported. Instead, a more modest uptick in evictions reflects how renter protections at the city and state levels still remain in parts of the country, housing attorneys and advocates said. Landlords, meanwhile, say the risk of an eviction epidemic was always overstated and that most building owners have been willing to work with cash-strapped tenants. Both groups also think that federal rental assistance, slow…
Debt Collection Licensing Act
The New California Debt Collection Licensing Act (“DCLA”) may require some lawyers to get licensed as debt collectors: California had been one of 16 states that did not require licensing of debt collectors. That changed last year with the enactment of the Debt Collection Licensing Act (“DCLA”). 2020 Cal. Stats. ch. 163 (SB 908). The DCLA will go into effect at the beginning of next year and provides for the licensing and regulation of debt collectors. As defined by the DCLA, a debt collector is “any person who, in the ordinary course of business, regularly, on behalf of that person…
Margavitch v. Southlake Holdings LLC (In re Margavitch)
Margavitch v. Southlake Holdings LLC (In re Margavitch), ___BR___, case no. 20-00014 (Bankr. M.D. Pa. Oct. 6, 2021): Bky ct decision holding that, in light of the US Supreme Court Fulton decision, a creditor does not violate any of the 11 USC 362(a)(1)-(8) bankruptcy automatic stays, by refusing to release– after the debtor filed bankruptcy and demanded (several time) that the creditor release the judicial lien the creditor had obtained on debtor’s bank account, which lien the creditor had obtained before the debtor filed bankruptcy. ABI in its 10/14/21 e-mail reports on the Margavich decision as follows: Refusing to Release…