The Bankruptcy Law Firm, Prof. Corp.
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…
In re World Imports Ltd., ___F.3d ___ case number 16-1357 (3d Cir. July 10, 2017)
In re World Imports Ltd., ___F.3d ___ case number 16-1357 (3d Cir. July 10, 2017): Third Circuit Court of Appeals holds that “receipt” under 11 USC 503(b)(9) Occurs when debtor obtains Physical Possession of goods, which may be later than “delivery” of goods. Increases the chance the creditor who supplied the goods to the debtor can have an administrative claim, per Section 503(b)(9). Section 503(b)(9) gives a seller has an administrative expense claim under Section 503(b)(9), if the goods were “received” by the debtor within “20 days before the date of commencement” of debtor’s bankruptcy case. Questions arise when the…
In re Salamon, ___F.3d___, 2017 Westlaw 1404194 (9th Cir. 2017)
SUMMARY: In re Salamon, ___F.3d___, 2017 Westlaw 1404194 (9th Cir. 2017: The Ninth Circuit holds that when a vendor’s nonrecourse junior purchase money lien is extinguished by a senior creditor’s postpetition nonjudicial foreclosure sale, the “foreclosed-out” vendor could not assert a deficiency claim under Bankruptcy Code 11 USC §1111(b), even though the lien was in existence on the day the bankruptcy petition was filed. A creditor making the so-called “1111(b)” election is very rare in Chapter 11 bankruptcy cases, the only chapter where “1111(b)) elections are allowed. Now it will be even more rare. The insolvency section of the California…
In re Kipnis, 555 BR 877 (Bankr. S.D. Fla. 2016)
In re Kipnis, 555 BR 877 (Bankr. S.D. Fla. 2016). A bankruptcy court in Florida has held that a bankruptcy trustee had the power to use the Internal Revenue Service’s 10 year statute of limitations in pursuing fraudulent transfer litigation on behalf of the bankruptcy estate, instead of the shorter statute of limitations (usually 4 years if recorded transfer, or 7 years if not recorded transfer). Kipnis is contrary to an earlier bankruptcy case, In re Vaughan, 498 B.R. 297, at 304 (Bankruptcy Court D. New Mexico 2013), which cites to Marshall v. Intermountain Elec. Co., Inc., 614 F.2d 260,…
SBA v. Bensal (9th Cir. 2017) 853 F.3d 994: California Probate Code §283
SBA v. Bensal (9th Cir. 2017) 853 F.3d 994: California Probate Code §283 states that a disclaimer of an inheritance is not a fraudulent transfer: “A disclaimer is not a voidable transfer by the beneficiary under the Uniform Voidable Transactions Act…” Therefore, California state law allows a person to disclaim an inheritance, without the disclaimer of inheritance constituting a fraudulent transfer. Individuals quite often do disclaim inheritances, shortly before filing bankruptcy, so the inheritance will not become part of the individual’s “bankruptcy estate”, when the individual thereafter files bankruptcy. Purpose of the disclaimer of inheritance is to prevent the Chapter…