The Bankruptcy Law Firm, Prof. Corp.
Supreme Court Backs Power of Bankruptcy Judges in Wellness Decision
On 5/26/15, the U.S. Supreme Court ruled, in Wellness International Network Ltd v. Sharif, that bankruptcy judges have the power to make final judgments in certain disputes if everyone involved consents to the arrangement, the Wall Street Journal reported today. In a 6-3 ruling, the Court reversed a Seventh Circuit finding that the bankruptcy court didn’t have the constitutional authority to decide whether certain property belonged to the bankruptcy estate because the dispute also involved state law issues. Justice Sonia Sotomayor, writing for the court, said that bankruptcy courts can be the final arbiter of disputes so long as those…
The Supreme Court issued a unanimous opinion in HARRIS v. VIEGELAHN
The Supreme Court issued a unanimous opinion, on 5/18/15, in HARRIS v. VIEGELAHN, in favor of the debtor and holding that debtor is entitled to return of any post-petition wages not already disbursed by the chapter 13 trustee, when debtor converts debtor’s ch 13 case to ch 7, and the ch 13 trustee is holding plan payments paid to trustee by debtor to fund plan, which Trustee has not yet distributed to the creditors.
Ninth Circuit Court of Appeals Made a Ruling in Favor of Debt Collection Industry
On May 12, 2015, the Ninth Circuit Court of Appeals ruled 3-0 in favor of the credit and collection industry in the case of Kubler Corporation, dba Alternative Recovery Management v. Diaz, 14-55235 (9th Cir., May 12, 2015). The issue on appeal was the district court’s decision that California law does not permit a creditor without a contractual interest provision to claim and collect interest prior to a court awarding prejudgment interest. The Ninth Circuit held that California law can entitle a creditor to interest even without a prior judgment. Consequently, the court found that the collection agency did not…
Supreme Court Holds that Denial of Confirmation of a Plan is Not an Appealable Final Order
On 5/4/15, the U.S. Supreme Court unanimously decided, in case Bullard v. Blue Hills Bank, Case No. 14-116, that a bankruptcy court’s order denying confirmation of a debtor’s proposed chapter 13 plan is not a final order that the debtor can immediately appeal under 28 U.S.C. Sect. 158(a)(1) and (d)(1). The Court resolved a split among the Courts of Appeals, adopting the majority view. Interestingly, the Court rejected the argument of the Solicitor General, who had joined the debtor in arguing that denial of plan confirmation should be treated as an appealable final order, just as confirmation of a plan…
Who Gets Funds Held By Ch. 13 Trustee When Case Converts to Chapter 7? Supreme Court Looks to Policy, Equity and the Code During Oral Argument
On Wednesday, April 1, 2015, the U.S. Supreme Court heard oral argument in two bankruptcy cases: Harris v. Viegelahn and Bullard v. Blue Hills Bank. The issue for the Court in Harris is whether funds already paid to, but not yet disbursed by, the chapter 13 trustee should revert to the debtor or be distributed to creditors when the debtor converts his case to chapter 7 after confirmation of his chapter 13 plan. Many of the questions that the Justices asked at oral argument focused not on the nuances of statutory language, but rather on the usefulness of trust law…
Will a Debtor with the Right to Appeal an Order Denying Confirmation of a Bankruptcy Plan be Less Likely to Negotiate with Creditors? Justices Examine in Bullard
The Supreme Court on April 1 heard oral argument in Bullard v. Blue Hills Bank, the second of two bankruptcy cases that the Court heard that day (an analysis of Harris v. Viegelahn appeared in Tuesday’s edition of the ABI Bankruptcy Brief). In Bullard, the Court took up the question of whether an order denying confirmation of a chapter 13 plan with leave to file an amended plan is a final order appealable as of right. While several Justices were skeptical of the dire consequences cited by respondent Blue Hills Bank, they also recognized that a debtor with the right…
Supreme Court, Advocates Struggle with Dewsnup at Oral Argument on Lien Stripping
On Tuesday, March 24, 2015, the Supreme Court heard oral argument in the consolidated cases of Bank of America, N.A. v. Caulkett and Bank of America, N.A. v. Toledo-Cardona. The Supreme Court granted certiorari in Caulkett and Toledo-Cardona to decide whether a chapter 7 debtor may “strip off” a junior mortgage lien, pursuant to Sect. 506(d), when the debt owed to the senior lienholder exceeds the current value of the collateral. In its 1992 decision in Dewsnup v. Timm, the Supreme Court held that Sect. 506(d) did not permit the chapter 7 debtors to “strip down” a lien to the…
US Supreme Court has heard argument in, and has “under submission” (awaiting Court ruling) on Court’s THIRD case on jurisdiction of Bankruptcy Courts since 2011
Since 2011, the Supreme Court has decided two cases relating to the constitutional authority of Bankruptcy Courts to enter final judgments in proceedings that are outside the resolution of the debtor-creditor relationship and that seek to augment the bankruptcy estate. Stern v. Marshall, 131 S. Ct. 2594 (2011) and Executive Benefits v. Arkison, 134 S. Ct. 2165 (2014). In January 2015, the Supreme Court heard arguments in its third bankruptcy jurisdiction case in four years. Wellness International v. Sharif, No. 13-935, places at issue both the constitutional authority of the bankruptcy court to enter final judgment that a chapter 7…
Elliott v. Weil (In re Elliott)
In Elliott v. Weil (In re Elliott), ___ B.R. ___, 2014 WL 6972472 (9th Cir. BAP 2014), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) held that Law v. Siegel, ___ U.S. ___, 134 S.Ct. 1188 (2014), abrogated Ninth Circuit authority under which a debtor’s exemption could be denied, or under which a debtor could be denied the right to amend his or her exemptions, on the basis of bad faith or prejudice to creditors. FACTUAL BACKGROUND In an effort to conceal his Los Angeles home from judgment lien creditors, Edward Elliott ("Elliott") transferred his residential real property…
Supreme Court Doubleheader
The National Association of Consumer Bankruptcy Attorneys (“NACBA”) reports, in its 2/3/15, e-newsletter to members, that NACBA has filed amicus briefs, in two bankruptcy cases on which the US Supreme Court has granted petitions of certiorari, as follows: NACBA filed amicus briefs on Monday in two Supreme Court cases: Harris v. Veigelahn, 14-400, and Bullard v. Blue Hills Bank, 14-116. Harris asks whether funds paid into a confirmed chapter 13 plan that are still in the trustee’s possession when the bankruptcy is converted to chapter 7 should be refunded to the debtor or paid to creditors. At the time of…