The Bankruptcy Law Firm, Prof. Corp.
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…
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…