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Blixseth v. Brown (In re Yellowstone Mountain Club, LLC), ___F.3d ___, 2016 WL6936595 (9th Cir. 11/28/2016)
Blixseth v. Brown (In re Yellowstone Mountain Club, LLC), ___F.3d ___, 2016 WL6936595 (9th Cir. 11/28/2016): In Blixseth, the Ninth Circuit Extends Barton doctrine, to Protect Creditors’ Committee Members In Blixseth, the Ninth Circuit Court of Appeals became the first US appeals court to hold that the Supreme Court’s Barton doctrine, barring suits against receivers and trustees without permission from the appointing court, also protects creditors’ committee members from claims based on actions taken within the scope of authority. The appeal involved Timothy Blixseth, former owner of the bankrupt Yellowstone Mountain Club LLC, who used some proceeds from a loan…
National Association of Consumer Bankruptcy Attorneys files Amicus Brief, arguing against the 11th Circuit US Court of Appeals Judicial Estoppel Doctrine
NCBRC has filed an amicus brief in the Eleventh Circuit on behalf of the NACBA membership to address the issue of that circuit’s approach to judicial estoppel. Slater v. U.S. Steel, No. 12-15568 (filed October 24, 2016). Twenty one months after filing an employment discrimination suit in federal district court against her former employer, U.S. Steel, Sandra Slater filed for bankruptcy. (The original case was filed under chapter 7 and later converted to chapter 13). She failed to list the pending federal case in her bankruptcy schedules. U.S. Steel then moved the district court to bar the discrimination suit based…
In re Kipnis, ___BF___, 2016 Westlaw 4543772 (Bankruptcy Court. S.D. Fla. 2016)
A bankruptcy court in Florida has held that a trustee had the power to borrow the Internal Revenue Service’s 10 year statute of limitations in pursuing fraudulent transfer litigation on behalf of the estate. FACTS: An individual owed back taxes to the Internal Revenue Service. In an attempt to avoid paying those assessments, he allegedly engaged in fraudulent transfers of his assets. Roughly 10 years after those transfers, he filed a bankruptcy petition. His trustee then asserted fraudulent transfer claims against his transferees under 11 U.S.C.A. §544(b). They moved to dismiss on the ground that the claims were time barred,…
In re Archdiocese of Milwaukee (Official Committee of Unsecured Creditors v. Archdiocese of St. Paul and Minneapolis), ___BR___, 2016 WL7115977 (US DC ED Wisconsin 2016)
In re Archdiocese of Milwaukee (Official Committee of Unsecured Creditors v. Archdiocese of St. Paul and Minneapolis), ___BR___, 2016 WL7115977 (US DC ED Wisconsin 2016): US District Court affirmed, on appeal, the bankruptcy court’s denial of substantive consolidation. The Bankruptcy Court decision is 483 BR 693, 2012 WL 6093494 (Bky Ct. ED Wisconsin 2012). The Bankruptcy Judge had denied motion of creditors committee to substantively consolidate non-bankrupt catholic schools and parishes into the bankruptcy case of the Catholic Archdiocese in which those non-bankrupt catholic schools and parishes were nocated. On appeal, the US District Court, ED Wis 2016, agreed that…
Midland Funding, LLC v. Hill
Midland Funding, LLC v. Hill: On 10/11/16, the US Supreme Court has granted a petition for certiorari, to hear creditor Midland Fundings’ appeal to US Supreme Court, from 11th Circuit Court of Appeals, of Hill v Midland Funding, LLC, 823 F.3d 1334 (11th Cir 2016). By deciding Midland Funding, LLC v Hill, the US Supreme Court is expected to resolve the split in cases of various Circuits, as to whether or not it violates the Fair Debt Collection Practices Act (FDCPA), for a creditor to file a Proof of Claim in a bankruptcy case, to try to collect a claim…
In re Ritz,___F.3d ___, 2016 Westlaw 4253552 (5th Cir. 2016)
In re Ritz,___F.3d ___, 2016 Westlaw 4253552 (5th Cir. 2016): The US Fifth Circuit Court of Appeals held that when a corporations controlling shareholder “loots” (takes without right) money or assets of the corporation, that the controlling shareholder does that, that looting qualifies as an “actually fraudulent” transfer, which can be recovered from the insider, possibly by “piercing the corporate veil”. In Ritz, a supplier sold merchandise to a corporation. The corporation’s controlling shareholder siphoned off its assets for his own benefit. Following the shareholder’s bankruptcy filing, the supplier sought to pierce the corporate veil in order to hold the…
Hernandez v. Williams Zinman & Parham, ___ F3d ___ (9th Cir. 7/20/16) (appeal no. 14-15672)
Hernandez v. Williams Zinman & Parham, ___ F3d ___ (9th Cir. 7/20/16) (appeal no. 14-15672): The U.S. Court of Appeals for the Ninth Circuit, in a case of first impression and the first published circuit court opinion to address the issue, recently held that each and every debt collector – not just the first one to communicate with a debtor – must send the debt validation notice required by the federal Fair Debt Collection Practices Act. A copy of the opinion in is available at: Link to Opinion. A consumer financed the purchase of her automobile, but stopped making payments…
In re City of Detroit, Michigan, ___F.3d___, 2016 WL 5682704 (6th Circ.10/3/16
In re City of Detroit, Michigan, ___F.3d___, 2016 WL 5682704 (6th Circ.10/3/16): The Sixth Circuit refused to reverse cuts to pensions of Detroit municipal retires. The retires pension benefits were cut as part of Detroit City chapter 9 bankruptcy plan. The retirees appealed to the 6th Circuit Court of Appeals. The Sixth Circuit based its ruling on the fact that too many significant or irreversible actions taken under the Chapter 9 plan, would have to be unraveled, for the cut pension benefits to be restored. There was a dissent 2-1. The split decision of the 6th Circuit concurred with a…
Adinolfi v. Meyer (In re Adinolfi), ___BR___ (9th Cir. BAP 2016)
Adinolfi v. Meyer (In re Adinolfi), ___BR___ (9th Cir. BAP 2016): In a two judge with one judge dissenting decision, the Ninth Circuit’s Bankruptcy Appellate Panel wrote an opinion that could be interpreted to mean that benefits received under most programs governed by the Social Security Act are not “disposable income” that must be devoted to payment of creditors’ claims in a chapter 13 plan. In Adinolfi, Chapter 13 debtor was receiving $1,400 a month to care for a child adopted from foster care. Both the majority and the dissent based their opinions on the language of Sections 1325(b)(1) and…
DJM Associates LLC v. Capasso, ___ F.Supp.3d ___ (DC ED NY 2016) case number 97-7285 (E.D.N.Y. Sept. 22, 2016)
US District Court held that Successor to Bankrupt Company was liable for Pre-Bankruptcy Environmental Claims Although the facts existed and a statute had been adopted before bankruptcy giving rise to a claim that would be discharged, the claim was not discharged because the Supreme Court did not hand down a decision until years after bankruptcy recognizing a private right of action. The Sept. 22 decision by Chief District Judge Dora L. Irizarry in Brooklyn, N.Y., means that a confirmed chapter 11 plan is no shield to environmental contribution claims not recognized by statute or case law until after bankruptcy. This…