The Bankruptcy Law Firm, Prof. Corp.
First Southern National Bank v. Sunnyslope Housing LP (In re Sunnyslope Housing LP), ___F3d___ (9th Cir. EN BANC May 26, 2017) (case #12-17241)
First Southern National Bank v. Sunnyslope Housing LP (In re Sunnyslope Housing LP), ___F3d___ (9th Cir. EN BANC May 26, 2017) (case #12-17241) In an En banc decision, 8 to 3, the US Court of Appeals for the Ninth Circuit, on 5/26/17 reversed a 9th Circuit decision from 2016 on cramdown valuation, for “cramming down” a Chapter 11 plan on a secured creditor which rejected the Chapter 11 debtor’s proposed Chapter 11 plan. EN BANC, the Ninth Circuit held that Cramdown Value Is Not the Higher of Foreclosure or Replacement Value, it is replacement value. Specifically, the en banc 9th…
Midland Funding LLC v. Johnson
US Supreme Court on 5/15/17 issued a decision in Midland Funding LLC v. Johnson holding that Debtor Collectors That Pursue Stale Debt In Bankruptcy cases, by filing a proof of claim on a debt that is beyond the state law statute of limitations, do NOT violate the FDCPA (Fair Debt Collection Practices Act) federal consumer protection statute. US Supreme Court decision reversed an US Circuit Court, Eleventh Circuit, decision that had held that it DID violated the FDCPA for creditors to file proofs of claim in a bankruptcy case, that were past the non-bankruptcy law statute of limitations. Click here…
In re Cowen, ___F.3d___, 2017 Westlaw 745596 (10th Cir. 2017)
In re Cowen, ___F.3d___, 2017 Westlaw 745596 (10th Cir. 2017): The US Court of Appeals for the Tenth Circuit held in Cowen that when two creditors “passively retained” the debtor’s property, that they did not violate the automatic stay by “passively retaining” debtor’s property (which they had possession of at the time debtor filed bankruptcy), because the creditors did NOT engage in any affirmative acts to “control” the debtor’s property. However, the creditors’ post-petition forgery and perjury did violate the stay. Note that (as stated in Cowen) the Second, Seventh, Eighth, and Ninth Circuits (California is in the Ninth Circuit)…
Giacchi v. U.S. (In re Giacchi), ___F.3d___ (3d Cir. 5/5/17)
Giacchi v. U.S. (In re Giacchi), ___F.3d___ (3d Cir. 5/5/17): US Court of Appeals for the Third Circuit, in 5/5/17 decision, Joins Majority of Circuits in the Split Over Whether Tax Can Ever be Discharged, that is owed on Late-Filed Tax Returns The split widens on the one-day-late rule, where the First, Fifth and Tenth Circuits hold that a tax debt never can be discharged under Section 523(a)(1)(B)(i) if the underlying tax return was filed even one day late. The Fourth, Sixth, Seventh, Eighth and Eleventh Circuits, on the other hand, employ the four-part test resulting from a 1984 Tax…
Porter v. Nabors Drilling USA LP, ___F.3d___ (9th Cir. April 20, 2017), 9th Circuit case number 15-16985
Porter v. Nabors Drilling USA LP, ___F.3d___ (9th Cir. April 20, 2017), 9th Circuit case number 15-16985: Ninth Circuit Court of Appeals holds that Police Power Exception to bankruptcy automatic stay, 11 USC 362(b)(4), does NOT Apply to Suits by Private Attorneys General. Suits by private attorney generals (aka nongovernment individuals/entities suing as “private attorney generals”), against the bankruptcy debtor, are stayed by the bankruptcy automatic stay, and cannot proceed unless plaintiff moves for and receives relief from stay to proceed with the suit. Porter was a “private attorney general” suit seeking to enforce state labor laws. A suit brought…
Circuit Split on Whether or Not Bankruptcy Courts Are “Courts of the United States”
Circuit split on whether or not bankruptcy courts are “courts of the United States”. If they are, Bankruptcy Courts can use 28 USC 1927 (as well as 11 USC 105) to order misbehaving debtors, creditors, and their attorneys to pay monetary sanctions. If Bankruptcy Courts are NOT “courts of the United States”, they cannot use 28 USC 1927, but can still use 11 USC 105. This Circuit split is reported in a 2016 not for publication 6th Circuit case, In re Royal Manor Management (6th Cir. 6/15/16), 652 Fed. App. 330, as follows: There is a split of authority regarding…
Fees to Recover Sanctions Are Permitted under 28 U.S.C. § 1927
Whether a court can award “fees on fees” is a hot topic, exemplified by the US Supreme Court’s decision in Baker Botts LLP v. Asarco LLC , 135 S. Ct 2158 (2015) which holds that retained counsel cannot obtain compensation for successfully defending a fee application. In the appellate context, the Ninth Circuit laid down rules explaining when an injured party can recover fees incurred in obtaining a sanction against an adversary for a frivolous appeal. Essentially, the expense of obtaining a monetary sanction can be recovered if the basis for the award is a fee-shifting statute. If the basis…
US Supreme Court to Hear Oral Argument on 4/18/17 in Henson v. Santander Consumer USA, Inc.
The U.S. Supreme Court today will hear oral argument in a case that looks at whether a company that regularly attempts to collect debts it purchased after the debts had fallen into default is a “debt collector” subject to the Fair Debt Collection Practices Act.
U.S. Bank NA v. The Village at Lakeridge LLC
U.S. Bank NA v. The Village at Lakeridge LLC: US Supreme Court on 3/2717 Granted Petition for Certiorari on U.S. Bank NA v. The Village at Lakeridge LLC, to decide the issue of Appellate Standards for Non-Statutory Insider Status. However, does not appear that granting certiorari on U.S. Bank NA v. The Village at Lakeridge LLC will result in the US Supreme Court reviewing the more important question of INSIDER treatment.
Czyzewski v. Jevic Holding Corp., ___US___ 2017 WL 1066259
Czyzewski v. Jevic Holding Corp., ___US___ 2017 WL 1066259 (3/22/2017): US Supreme Court Strikes Down “Structured Dismissals” of Bankruptcy cases, if the terms of the “Structured Dismissal” of the bankruptcy case violate the priority scheme of the Bankruptcy Code: The United State Supreme Court in Czyzewski v. Jevic Holding Corp. held that “[a] distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the Code establishes for final distribution of estate value in business bankruptcies.” Importantly, the…