The Bankruptcy Law Firm, Prof. Corp.
US Supreme Court Might Grant ‘Petition for Certiorari’ to Hear and Resolve a Split between US Circuit Courts on Dischargeability
The US Supreme Court will decide whether a false oral statement about one asset is grounds for denial of discharge of a debt, IF the justices take the advice of the U.S. Solicitor General and grant certiorari to the Eleventh Circuit in Lamar Archer & Cofrin LLP v. Appling, 16-1215 (Sup. Ct.). The courts of appeals are evenly split, with the Eleventh and Fourth Circuits holding that a false oral statement about one asset is a statement of “financial condition” that must be in writing to result in denial of discharge of a debt under Section 523(a)(2). The Fifth and…
Momentive Performance Materials Inc. v. BOKF, NA (In the Matter of: MPM Silicones, L.L.C.)
Momentive Performance Materials Inc. v. BOKF, NA (In the Matter of: MPM Silicones, L.L.C.), – F.3d –, 2017 WL 4700314, No. 15-1682, (2d Cir. Oct. 20, 2017): US Court of Appeals for the Second Circuit recently issued its long-awaited opinion stemming from the confirmed Chapter 11 plan of Momentive Performance Materials Inc. The court reversed the lower courts’ controversial holding that senior secured lenders receiving replacement secured notes under the debtors’ plan were only entitled to interest at the “formula” rate – determined by using the risk-free rate plus a plan-specific risk adjustment. Instead, the Second Circuit remanded the case…
In re Barcelos, ___BR___, 2017 WL 464927(Bankr. E.D. Cal. 10/12/2017)
In re Barcelos, ___BR___, 2017 WL 464927(Bankr. E.D. Cal. 10/12/2017): IRS violated bankruptcy automatic stay by taking debtor’s tax refund, during debtor’s Chapter 12 bankruptcy case; but Bky Court did not order IRS to reimburse debtor’s attorneys fees expended to get the seized tax refund back from the IRS, because debtor did not “exhaust” administrative remedies at IRS: Chapter 12 debtor filed an adversary proceeding against the IRS, pursuant to Section 362(k), for wrongfully seizing income tax refunds in the amount of $21,000. The IRS admitted the stay violation, and promptly returned the refunds. Debtor pursued the adversary to recover…
Spiller McProud v. Siller (In re CWS Enterprises Inc.)
Spiller McProud v. Siller (In re CWS Enterprises Inc.),___F.3d___ 14-17045 (9th Cir. Sept. 14, 2017) Ninth Circuit ringingly endorses allowance of prepetition contingent fee arrangements; holds 11 USC 502(b)(4) Fee Cap on prepetition attorneys fees, when client that owes attorneys fees to attorney thereafter files bankruptcy, seldom applies to contingent fee attorneys fees, earned by attorney prepetition. Commentators say the decision tackles a particularly cerebral question at the intersection of the Full Faith and Credit Act and Section 502(b)(4), the section of the Bankruptcy Code that puts a “reasonable value” cap on a prepetition claim for services by a debtor’s…
Brace v. Speier (In re Brace), 566 B.R. 13 (9th Cir. BAP 2017)
Brace v. Speier (In re Brace), 566 B.R. 13 (9th Cir. BAP 2017): Ninth Circuit Bankruptcy Appellate Panel (“BAP”) holds that California’s community property presumption prevails over the record title presumption in bankruptcy cases. BAP affirmed a ruling by the bankruptcy court holding that, where the avoidance of transfers of interests in real properties restored title to a married couple as joint tenants, California’s community property presumption (California Family Code § 760) (the “Community Property Presumption”) prevailed over California’s record title presumption (California Evidence Code § 662) (the “Record Title Presumption”). As a result, both the debtor’s and the non-debtor…
Ivey v. First Citizens Bank & Trust Co.
Ivey v. First Citizens Bank & Trust Co. (In re Whitley), 848 F.3d 205 (4th Cir. 2017), the US Court of Appeals for the Fourth Circuit held that a deposit into one’s own bank account is not a “transfer” within the meaning of Section 101(54) and therefore provides no basis for a fraudulent transfer with actual intent to hinder or delay creditors under Section 548(a)(1)(A). Not binding on Judges in Ninth Circuit, because not a US Court of Appeals for the Ninth Circuit decision; but may be followed by bankruptcy judges, and appellate judges within the Ninth Circuit (includes California),…
Anti-Suit Injunction Protecting Non-Settling Defendant
US Circuit Court for the Eleventh Circuit holds that Bankruptcy Court has jurisdiction and statutory power to grant an Anti-Suit Injunction Protecting Non-Settling Defendant. The bankruptcy court has both the jurisdiction and statutory power to impose an anti-suit injunction protecting a non-settling defendant from claims by third-party nondebtors, even if the injunction was not part of the parties’ settlement, according to the Eleventh Circuit. Evidently, however, the question was not raised concerning the bankruptcy court’s constitutional power to enter a final order imposing an injunction having the effect of a third-party release. The maddeningly complex procedural history resulted from several…
BREAKING: 9th Circ. Says FCRA Claims Meet Standing Bar In Spokeo Row
The Ninth Circuit ruled on 8/15/17 that a man who accuses Spokeo of violating the Fair Credit Reporting Act by allegedly reporting inaccurate information about him had claimed a sufficiently concrete injury to meet the Article III standing bar established by the U.S. Supreme Court in the dispute last year.
In re Fravala, ___BR___(BkyCt, MD Fla Aug 10, 2017)
In re Fravala, ___BR___(BkyCt, MD Fla Aug 10, 2017): Bankruptcy Judge Awarded No Damages to Debtor for Willful Stay Violation Since Debtor Failed to Mitigate Damages I. Nondischargeability of Debt under Sect. 1328(a) and 532(a)(3) Even though the Debtor did not understand the effect of the guaranty, the Defendant was a known creditor on the petition date by virtue of his signature on the agreement. The Debtor’s liability under the guaranty was a contingent claim on the date that he filed his Chapter 13 petition. A contingent claim as of the petition date is a prepetition claim for the purposes…
Gharib v. Casey (In re Kenny G. Enterprises LLC), ___F.3d ___ (9th Cir. July 28, 2017) (9th circuit appeal case number 16-55007)
Gharib v. Casey (In re Kenny G. Enterprises LLC), ___F.3d ___ (9th Cir. July 28, 2017) (9th circuit appeal case number 16-55007): Ninth Circuit Upholds Tough Civil Sanctions for Contempt of Turnover Order that Ordered Person to turn over $1,420,000 to Chapter 7 Trustee, as belonging to Chapter 7 bankruptcy estate. (Two years in “body detention” (aka incarceration) and $1,000 in daily fines are ok as civil contempt sanctions). For failure to comply with a turnover order, the bankruptcy court can properly order the person who fails to comply put in body detention (aka incarcerated), until the person complies with…