The Bankruptcy Law Firm, Prof. Corp.
Clark’s Crystal Springs Ranch LLC v. Gugino (In re Clark), — B.R. — (9th Cir. BAP March 2016)
Issue: Was substantive consolidation of the debtor, his LLC and trust into a single chapter 7 appropriate under the facts here? Holding: Yes. creditors dealt with the entities as a single economic unit and did not rely on their separate identity in extending credit [and] the affairs of the debtor are so entangled that consolidation will benefit all creditors. Judge Terry Myers, Idaho Jury, Kirscher, Faris Opinion by Jury The chapter 12 debtor operated a family farm which was purportedly owned and managed by an LLC which was, in turn, purportedly owned by a trust. The case was converted to…
California Senate Bill S380
California Senate Bill S380 seeks to increase the homestead exemption amounts to $100,000 for a single person; $150,000 for a family or head of household; and $300,000 for those over 65. Under existing law, the homestead exemption is $75,000 for a single person; $100,000 for a family; and $175,000 for a person over age 65, or who is over age 55 with very low income, or who is permanently disabled. The sponsors of S380 expect the California Senate to vote on the bill in the next few weeks. It is unknown at present whether this bill will become law or…
Sponsoring of the California Bankruptcy Forum Annual Continuing Legal Education Conference
The Bankruptcy Law Firm, PC was a sponsor of the California Bankruptcy Forum annual continuing legal education Conference, for lawyers and other bankruptcy professionals, held on May 22-22, 20016 in Indian Wells, California
Husky International Electronics, Inc. v. Ritz, ___ S.Ct.___, 2016 WL 2842452 (May 16, 2016) (case no. 15-145)
The United States Supreme Court, in Husky International Electronics, Inc. v. Ritz, on 5/16/16, reversed a 5th circuit Court of appeals case, In re Ritz, 787 F.3d 312 (5th Cir., May 22, 2015) and resolved a split among Circuit Courts nationwide, by the US Supreme Court ruling that the term “actual fraud” in Bankruptcy Code 11 USC § 523(a)(2)(A) encompasses forms of fraud, like fraudulent conveyance schemes, that can be effected without a false representation. In Husky, the US Supreme Court ruled that anything that counts as “fraud” and is done with wrongful intent is “actual fraud,” although “the term…
Scheer v. State Bar of California (In re Scheer), ___F.3d ___, case no.14-56662 (9th Cir. April 14, 2016)
The Ninth Circuit wrote an opinion on April 14 indirectly saying that the Supreme Court should overrule Kelly v. Robinson, where the high court held in 1986 that criminal restitution imposed as a condition for probation is nondischargeable under Section 523(a)(7). Writing for the appeals court, Circuit Judge John B. Owens said that Kelly "untether[ed] statutory interpretation from the statutory language." That approach, he said, "has gone the way of NutraSweet and other relics of the 1980s and led to considerable confusion." He then went on to cite circuit court decisions from around the country that distinguish Kelly to the…
CFPB v. Chance Edward Gordon, 819 F.3d 1179 (9th Cir. 4/14/2016)
CFPB v. Chance Edward Gordon, 819 F.3d 1179 (9th Cir. 4/14/2016): Defendant Gordan on 11/17/16 filed his Petition for Certiorari, requesting the US Supreme Court to grant review by the US Supreme Court of the 9th Circuit’s decision against defendant Gordon. The 9th Circuit decision affirmed Gordon’s liability for Gordon having committed deceptive practices in connection with offering/providing/charging for mortgage modification services. The petition addresses the ratification of government action alleged to be ultra vires at the time the action was taken, as well as a subject-matter jurisdiction question regarding whether federal courts’ Article III jurisdiction exists when the federal…
Shalaby v. Mansdorf (In re Nakhuda) (B.A.P. 9th Cir. 2016)
Debtor’s attorney sanctioned by Bankruptcy Court, sua sponte (sua sponte means on the Court’s own motion, instead by a party bringing a Motion for sanctions) for multiple errors, including that debtor attorney did not have debtor client’s original signature on the bankruptcy petition, schedules, other required bankruptcy documents, which is required if the debtor’s attorney efiles the bankruptcy case with “/s/” signatures for debtor, instead of with ink signed signature. In addition, bankruptcy court sanctioned debtor attorney for: “(1) making arguments not warranted by existing law or non-frivolous arguments for its extension, modification or reversal; (2) failing to ensure that…
Whatley v. Stijakovich-Santilli (In re Stijakovich-Santilli), 542 B.R. 245 (9th Cir. BAP 2015)
The U.S. Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) construed Rule 4003(b)(2) of the Federal Rules of Bankruptcy Procedure (“FRBP”), which extends the period for a trustee to object to exemptions where the exemption was fraudulently asserted, and held that a debtor fraudulently asserts an exemption when the debtor knowingly misrepresents a material fact that supports the claim of exemption and the trustee justifiably relies on a misrepresentation. A trustee can justifiably rely on that misrepresentation even if the trustee could have uncovered the fraud had the trustee carefully investigated. In determining whether a debtor fraudulently asserted an exemption,…
Revision of Certain Dollar Amounts in the Bankruptcy Code
(Effective April 1, 2016) – Source: 81 Fed. Reg. 8748-01, 2016 WL 684261 (Feb. 22, 2016) Affected sections of Title 28 U.S.C. and the Bankruptcy Code Dollar amount to be adjusted New (adjusted) dollar amount1 28 U.S.C.: Section 1409(b)—a trustee may commence a proceeding arising in or related to a case to recover (1)—money judgment of or property worth less than $1,250 $1,300 (2)—a consumer debt less than $18,675 $19,250 (3)—a non consumer debt against a non insider less than $12,475 $12,850 11 U.S.C.: Section 101(3)—definition of assisted person $186,825 $192,450…
In re Murray
In re Murray, 543 B.R. 484 (Bankr. S.D. N.Y. 2016), issued an opinion dismissing an involuntary bankruptcy case brought by a single creditor. In Murray, this creditor, the Wilk Auslander LLP law firm, was the assignee of a judgment obtained from its client (after the client did not pay its fees). The law firm sought to enforce upon its the judgment. To that end, the firm, as Murray’s sole creditor, filed an involuntary chapter 7 bankruptcy proceeding. Shortly after, Murray, filed a motion to dismiss the case under section 707(a), alleging the firm brought the petition in bad faith. Murray…