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Bankruptcy Judge’s Ruling in City of Stockton Chapter 9 (Municipality) bankruptcy case, which allowed Stockton to reduce its pension debt owed to present and retired City Employees, Is Not a Free Pass for Cities to Cut Pensions, say Experts
Bankruptcy Judge’s Ruling in City of Stockton Chapter 9 (Municipality) bankruptcy case, which allowed Stockton to reduce its pension debt owed to present and retired City Employees, Is Not a Free Pass for Cities to Cut Pensions, say Experts Although Judge Christopher M. Klein ruled on Wednesday in the Stockton, Calif., chapter 9 case that the city could use bankruptcy to wipe away its pension debt, experts do not view the bankruptcy judge’s oral statement as a free pass for other California cities struggling with rising pension costs, the New York Times reported on Friday. “He did give us a…
US Supreme Court has granted certiorari, to hear appeal on Baker Botts LLP v. ASARCO LLC
On Oct. 2, 2014, the U.S. Supreme Court granted certiorari in Baker Botts LLP v. ASARCO LLC, No. 14-103. Baker Botts, which represented debtor-in-possession ASARCO LLC in one of the largest and most complex chapter 11 bankruptcy cases ever, obtained a fee award from the bankruptcy court of $113 million for fees and costs, $4.1 million as an enhancement, and $5 million for defending its fee application. On appeal, the Fifth Circuit Court of Appeals reversed the $5 million award for defense of the fee application. Citing In re Pro-Snax Distributors Inc., 157 F.3d 414 (5th Cir. 1998), and Bankruptcy…
Secondary Debt Collectors Must Give Notice, Judge Says
The fair Debt Collection Practices Act requires subsequent debt collectors to notify consumers in writing, even if the prior holder or debt collector had already given notice, a federal judge has ruled. Deciding an issue that has divided courts, Southern District Judge William Pauley III said secondary collectors still must send a validation notice to avoid confusion by consumers over who holds the debt and whether they have the right to contest it. In Tocco v. Real Time Resolutions, 14-cv-810, Pauley said the requirement of a validation notice in 15 U.S.C. &1692g “applies to initial communications from each successive debt…
Schultze v. Chandler
Schultze v. Chandler, ___F.3d ___, 2014 WL 3537030 (9th Cir. July 18, 2014, amended August 1, 2014): In a published decision, the Ninth Circuit Court of Appeals held that a post-petition malpractice claim originally filed in state court against an attorney for an unsecured creditors’ committee is a core proceeding. Agreeing with other circuits, the Ninth Circuit found that the malpractice lawsuit, which was removed to a bankruptcy court from state court, fell within the definition of a core proceeding because: (1) the attorney’s employment and compensation was approved by the bankruptcy court; (2) his duties as committee counsel pertained…
Wortley V. Chrispus Venture Capital LLC (In re Global Energies LLC), ___F.3d___, 2014 WL 3974577 (11TH CIR. 8/15/2014)
The Eleventh Circuit Court of Appeals held that the bankruptcy court abused its discretion and applied the incorrect legal standard in denying Joseph G. Wortley’s (“Wortley”) FRCP Rule 60(b)(2) [incorporated into bankruptcy practice by FRBP Rule 9024] motion to set aside an order denying Wortley’s motion to dismiss, with prejudice, an involuntary chapter 11 case that business partners of Wortley had filed, against Global Energies, LLC (the entity that Wortley, and Wortley’s partners were partners in), as respondent. The Eleventh Circuit decision remanded the case, with instruction to the bankruptcy court to grant Wortley’s Rule 60(b)(2) motion, and instructed the…
DeNoce v. Neff (In re Neff)
DeNoce v. Neff (In re Neff), 505 B.R. 255 (9th Cir. BAP 2014): In a published decision the U.S. Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") affirmed a bankruptcy court’s order granting a debtor partial summary judgment against a denial of discharge complaint that alleged debtor should be denied a discharge because debtor had, within 1 year before debtor filed bankruptcy, made a fraudulent transfer of some of debtor’s property, and had made that transfer with an actual intent to hinder, delay, or defraud creditors. the BAP held that the one-year "lookback period" of Bankruptcy Code 11 USCn 727(a)(2)(A)…
Daniel Bock Jr. v Pressler & Pressler
Daniel Bock Jr. v Pressler & Pressler, Civ. No. 11-7593 (KM)(MCA), 2014 WL 2937929, (D.N.J. June 30, 2014), in which a US District Court held that a Law Firm violated the federal Fair Debt Collection Practices Act (“FDCPA”) when a lawyer of that Law Firm signed the Complaint, which Law Firm then filed in Court, to commence a lawsuit against the consumer who owed the debt to plaintiff company, seeking to collect the debt from consumer, only spent a few seconds reviewing and signing the Complaint, before that Complaint was filed in Court. Four second review did not comply with…
Crawford vs. LVNV Funding, LLC
Crawford vs. LVNV Funding, LLC, ___F.3d___, 2014 Westlaw 3361226 (11th Cir. 2014): held that a bulk debt buyer violated the federal Fair Debt Collection Practices Act (“FDCPA”) by filing a proof of claim in a consumer bankruptcy, based on a time-barred debt. There is a multi-Circuit split on this issue. Crawford is directly contra to a Second Circuit Court of Appeals decision Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2nd Cir. 2010) in which the Second Circuit held that filing a proof of claim (on an unenforceable debt) is not a violation of FDCPA, that FDCPA does not apply…
Hoskins v. Citigroup
HOSKINS V. CITIGROUP (IN RE VIOLA; 9TH CIR., July 16, 2014) case 12-60032, not for publication The Ninth Circuit Court of Appeals ruled that a “transferee”, as that term is used in Bankruptcy Code section 11 U.S.C. § 550(a)(1), is one who has legal title to the funds and the ability to use them as the recipient sees fit. This is the “dominion test.” The Ninth Circuit ruled that allegations of open and exclusive control through fraudulent misappropriation of funds is insufficient to satisfy the dominion test. The case is “not for publication”. But still sheds light on Ninth Circuit’s…
Robinson v. American Home Mortgage Servicing, Inc. (In re Mortgage Electronic Registration Systems, Inc.)., __F/3d__, 2014 WL 2611314 (9th Cir. 6/12/14)
On June 12, 2014, the 9th Circuit Court of Appeals issued its decision in). This decision is the result of multi-district litigation related to the operation of the MERS System and, with one exception, found in favor of the lenders on state law claims, such as, wrongful foreclosure, predatory lending, etc. The decision provides a good summary of the operation of the MERS System and prior case law on the topic. In this case, the 9th Circuit court of appeals held that: the District Court did not improperly convert a motion to dismiss for failure to state a claim into…