The Bankruptcy Law Firm, Prof. Corp.
In Castaic Partners II, LLC v. Daca-Castaic, LLC
In Castaic Partners II, LLC v. Daca-Castaic, LLC (In re Castaic Partners II, LLC), 823 F.3d 966 (9th Cir. 2016), the United States Court of Appeals for the Ninth Circuit dismissed the debtors’ appeal of stay relief orders as constitutionally moot after the consensual dismissal of the debtors’ underlying bankruptcy cases.
In re Quantum Foods, LLC, 554 B.R. 729 (Bankr. D. Del. 2016)
In re Quantum Foods, LLC, 554 B.R. 729 (Bankr. D. Del. 2016): The United States Bankruptcy Court for the District of Delaware held that a defendant could set off potential preference liability against its allowed administrative expense claim.
Heller Ehrman LLP, Liquidating Debtor v. Davis Wright Tremaine LLP
Heller Ehrman LLP, Liquidating Debtor v. Davis Wright Tremaine LLP (In re Heller Ehrman LLP), 830 F.3d 964 (9th Cir. July 27, 2016): The U.S. Court of Appeals for the Ninth Circuit certified to the California Supreme Court the question of whether a dissolved law firm has a property interest in hourly fee engagements in progress at the time of its dissolution such that the firm is entitled to compensation from law firms that later complete the work after employing an attorney of the dissolved firm post-dissolution to complete the engagement. The issue underlies the viability of the doctrine of…
Smith v. I.R.S. (In re Smith)
Smith v. I.R.S. (In re Smith), ___F.3d___ (9th Cir. July 13, 2016) Circuit case number 14-15857: Ninth Circuit holds that taxes owed, pursuant to a tax return that the debtor files late – after the due date for the return – may still, under some circumstances be dischargeable in the debtor’s bankruptcy case, using a 4 part test known as the "Beard" test. The part of the Beard test that is most often contested by the tax agency is whether the debtor, in filing a late tax return, made an honest and reasonable attempt to satisfy the requirements of the…
In re Boates, ___BR___ (BAB case no. AZ-15-1279-KuJaJu) (9th Cir. B.A.P. July 8, 2016)
In re Boates, ___BR___ (BAB case no. AZ-15-1279-KuJaJu) (9th Cir. B.A.P. July 8, 2016). Published. 9th circuit BAP holds that a chapter 7 debtor’s rights arising from a prepetition payment to a lawyer are estate property, even if the engagement agreement isn’t executory. Comment: this opinion does not seem consistent with the Bankruptcy Code.
The US Supreme Court Granted Certiorari in Czyzewski v. Jevic Holding Corp.
On 6/28/16, the US Supreme Court granted certiorari in Czyzewski v. Jevic Holding Corp., a 2015 Third Circuit Court of Appeals decision, to decide whether bankruptcy courts are allowed to dismiss chapter 11 cases when property is distributed in a settlement that violates the priorities contained in Section 507 of the Bankruptcy Code. Although Jevic deals with structured dismissals, the high court’s decision might also have the effect of allowing or barring so-called gift plans where a secured creditor or buyer makes a payment, supposedly from its own property, that enables a distribution in a chapter 11 plan not in…
Cases from Different Circuits Conflict
Cases from different Circuits conflict, as to whether or not a creditor violates the federal Fair Debt Collection Practices Act (“FDCPA”), by filing a Proof of Claim, in a debtor’s bankruptcy case, that the creditor knows is “time barred” (past the statute of limitations for time period in which creditor must sue, if creditor wants to seek to collect the debt from the debtor who owes the debt. The US Supreme Court will likely eventually rule on this issue: Here are some of the cases in conflict: The Eighth Circuit Court of Appeals held that a debt collector’s filing an…
Southwest Airlines Co. v. Tidewater Finance Co. (In re Cole), ___BR___ 15-70960 (N.D. Ga. June 24, 2016)
Southwest Airlines Co. v. Tidewater Finance Co. (In re Cole), ___BR___ 15-70960 (N.D. Ga. June 24, 2016) is yet another bankruptcy case which rules on the issue of whether the Rooker-Feldman doctrine prohibits a bankruptcy court (or any other federal court except the US Supreme Court) from changing a ruling made by a state court, or whether the federal court can change/overrule the state court’s ruling on an automatic stay. With cases going both ways on this issue, this will likely eventually be a “Circuit split” (conflicting decisions by various US Circuit Courts). Circuit splits usually eventually get ruled on…
Grossman v. Wehrle (In re Royal Manor Management Inc., ___F3d___, 15-3146 (6th Cir. June 15, 2016)
Grossman v. Wehrle (In re Royal Manor Management Inc., ___F3d___, 15-3146 (6th Cir. June 15, 2016), In Grossman Sixth Circuit Joins the Split Among US Circuit Courts, on Whether Bankruptcy Courts Are ‘Courts of the U.S.’The Sixth Circuit Grossman decision joined the Second, Third and Seventh Circuits in holding that a bankruptcy court is a “court of the United States.The Ninth and Tenth, US Circuit Courts of Appeals, have held that bankruptcy courts are not courts of the U.S. To decide another case where the outcome would either elevate or deprecate the status of bankruptcy courts, the Supreme Court should…
In re Sunnyslope Housing Ltd. Partnership, ___F3d___, 2016 Westlaw 1392318 (9th Cir. 2016)
In re Sunnyslope Housing Ltd. Partnership, ___F3d___, 2016 Westlaw 1392318 (9th Cir. 2016), the Ninth Circuit Court of Appeals held that since affordable housing covenants encumbering a development were subordinated to the senior lender’s lien, the borrower’s valuation of the lender’s collateral in a bankruptcy case had to account for the potential extinguishment of those junior covenants in the event of foreclosure. One could quarrel with the Ninth Circuit’s reasoning which led to this result, because it could be argued that the affordable housing covenants “ran with the land”, and therefore would NOT be extinguished by a foreclosure, that they…