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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 This Circuit split is reported in a 2016 not for publication 6th Circuit case, In re Royal Manor Management (6th Cir. 6/15/16), 652 Fed.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…
Opt-Out Lenders v. Millennium Lab Holdings II LLC (In re Millennium Lab Holdings II LLC), ___F.Supp.3d ___ (US District Court, District of Delaware 3/17/17)
Opt-Out Lenders v. Millennium Lab Holdings II LLC (In re Millennium Lab Holdings II LLC), ___F.Supp.3d ___ (US District Court, District of Delaware 3/17/17): US District Court for District of Delaware held Bankruptcy courts can’t issue final orders approving non-consensual third-party releases of non-bankruptcy claims, even as part of a Chapter 11 plan confirmation order. Without making a definitive ruling, a district judge in Delaware said that the US Supreme Court Stern v. Marshall case and its progeny preclude a bankruptcy court from entering a final order granting non-consensual third-party releases of non-bankruptcy claims, even as part of a chapter…
Tower Credit Inc. v. Schott (In re Jackson), 850 F.3d 816 (5th Cir. March 13, 2017)
Tower Credit Inc. v. Schott (In re Jackson), 850 F.3d 816 (5th Cir. March 13, 2017): US Supreme Court Won’t Decide a Circuit Split on Garnished Wages as Preferences The Supreme Court will not resolve a circuit split by deciding whether wages garnished within 90 days of bankruptcy are recoverable preferences. This morning, the high court denied a certiorari petition in Tower Credit Inc. v. Schott, 17-444 (Sup. Ct.), where the Fifth Circuit differed with three older circuit court decisions by holding in March that a wage garnishment resulted in a preference because the transfer was deemed to occur within…
Conflicting Outcomes, Between 2014 9th Circuit BAP Markosian v. Wu (In re Markosian), 506 B.R. 273 (9th Cir. BAP 2014), and 2 Bankruptcy Court Decisions from Other Circuits
Conflicting outcomes, between 2014 9th Circuit BAP Markosian v. Wu (In re Markosian), 506 B.R. 273 (9th Cir. BAP 2014), and 2 bankruptcy court decisions from other Circuits, which are In re Lincoln, BR ___, bky case number 16-12650 (Bankr. E.D. La. Feb. 8, 2017) and the 2015 Rogers v. Freeman (In re Freeman), 527 B.R. 527 (Bankr. N.D. Ga. 2015). The issue in all 3 cases is the same, and is this: When an individual’s chapter 11 case converts to chapter 7, does property acquired post-petition revert to the debtor or does it belong to the chapter 7 estate?…
Greif & Co. v. Shapiro (In re Western Funding Inc.), 550 B.R. 841 (9th Cir.BAP 2016) (“Greif”)
Greif & Co. v. Shapiro (In re Western Funding Inc.), 550 B.R. 841 (9th Cir.BAP 2016) (“Greif”): The U.S. Bankruptcy Appellate Panel for the Ninth Circuit (the “9th Circuit BAP”) held that the standards for approving a settlement agreement under Fed. R. Bankr. P. 9019(a) did not apply per se to a post-confirmation settlement agreement between a creditor and the liquidating trustee (the “Liquidating Trustee”), as liquidating trustees do not constitute “trustees” for purposes of the Bankruptcy Code and Bankruptcy Rules.