The Bankruptcy Law Firm, Prof. Corp.
In re H Granados Communications, Inc.
In re H Granados Communications, Inc., 2013 Westlaw 6838709 (9th Cir. BAP 2013. Creditor and creditor attorney ordered to pay monetary sanctions for violating bankruptcy automatic stay. The United States Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") recently upheld sanctions of $23,072.09 against a creditor and its counsel in civil contempt under 11 U.S.C. § 105(a) for violation of the bankruptcy automatic stay. Facts: In September 2011, Rediger Investment Corporation ("Rediger") through its counsel, the Duringer Law Group, PLC ("Duringer Firm" and, jointly, the "Appellants") commenced an unlawful detainer action in state court against H Granados Communications, Inc. ("debtor")…
Vazquez v. AAA Blueprint & Digital Reprographics (In re Vazquez)
SUMMARY: Vazquez v. AAA Blueprint & Digital Reprographics (In re Vazquez), 2013 WL 6571693 (9th Cir. BAP December 13, 2013): The Ninth Circuit Bankruptcy Appellate Panel ("BAP") recently upheld summary judgment in favor of a creditor under Bankruptcy Code Section 523(a)(6), excepting from discharge debts for willful and malicious injury, in which the bankruptcy court applied issue preclusion to a California trial court’s findings of actual fraudulent transfer. Factual Background Dennis Adrian Vazquez (the "Debtor") owned a document printing, copying and digital reproduction business known as Alliance Reprographics ("Alliance"). A former employee of AAA Blueprint & Digital Reprographics ("AAA") left…
In re Tronox, Inc., 2013 Westlaw 6596696 (Bankr. S.D.N.Y 2013)
In re Tronox, Inc., 2013 Westlaw 6596696 (Bankr. S.D.N.Y 2013). A bankruptcy court decision, but the reasoning as to why there was a fraudulent conveyance could be very important, in future, if additional courts in future agree with this reasoning: Facts: An oil, gas, and chemical company was burdened with enormous “legacy liabilities,” primarily due to environmental contamination. The company developed a plan to spin off its viable assets, leaving the legacy liabilities with a newly-formed successor entity. The complex asset divestiture proceeded over a period of several years. A few years after the completion of the transaction, the successor…
In re Energytec, Inc., 2013 Westlaw 6868618 (5th Cir. 2013)
In re Energytec, Inc., 2013 Westlaw 6868618 (5th Cir. 2013). A sale of pipeline system, which was property of the bankruptcy estate, “free and clear of liens and encumbrances”, in a bankruptcy case, per 11 USC 363(f), might NOT get rid of covenants relating to pipeline system Facts: In connection with the sale of a pipeline system, the purchaser executed covenants in favor of the vendor. Those covenants required the purchaser to pay a transportation fee based upon the amount of gas flowing through the pipeline and required the purchaser to obtain consent prior to assigning its interest in the…
Brown v. Ferroni, __BR__, 2014 WL 695090 (District Court, ED PA 2014)
Brown v. Ferroni, __BR__, 2014 WL 695090 (District Court, ED PA 2014): U.S. District Court, Eastern District of Pennsylvania (Philadelphia), has become an additional court holding that the “absolute priority rule” applies in individual Chapter 11 bankruptcy cases, and that the 2005 BAPCPA amendments to the Bankruptcy Code did NOT eliminate the absolute priority rule from applying in Chapter 11 cases of individuals. Courts are split nationwide at all levels (Bankruptcy Court, District Court, BAP, and Court of Appeals), as to whether or not the 2005 BAPCPA Amendments eliminated the absolute priority rule, in Chapter 11 bankruptcy cases of individuals…
Hudson v. Martingale Investments, LLC (In re Hudson), __ B.R. __, 2014 WL 128965 (9th Cir. BAP January 14, 2014)
Hudson v. Martingale Investments, LLC (In re Hudson), __ B.R. __, 2014 WL 128965 (9th Cir. BAP January 14, 2014): The U.S. Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") reversed the bankruptcy court’s ruling to annul the automatic stay. The BAP held that the bankruptcy court abused its discretion by basing the ruling on inadmissible evidence. FACTS: On March 5, 2013 at 10:28 a.m. (the "Petition Date"), John E. Hudson (the "Debtor") filed a chapter 13 bankruptcy petition. Martingale Investments, LLC ("Martingale") alleged that at 10:01 a.m. on the same day, Martingale bought the Debtor’s home at a foreclosure…
In re BP RE, LP, 735 F.3d 279 (5th Cir. 2013)
In re BP RE, LP, 735 F.3d 279 (5th Cir. 2013): 5th Circuit rules parties CANNOT consent to jurisdiction in bankruptcy court, where there is no jurisdiciton in bankruptcy court. Chapter 11 Debtor’s Consent to Jurisdiction Cannot Cure Bankruptcy Court’s Lack of Jurisdiction to Enter Final Judgment. [In re BP RE, LP (5th Cir. 2013).] The Fifth Circuit has held that a Chapter 11 debtor’s consent to the jurisdiction of a bankruptcy court cannot cure the court’s lack of jurisdiction to enter a final judgment under Article III of the Constitution. Facts: A Chapter 11 debtor asserted common-law claims against…
Blade Energy Pty Ltd. et al. v. Rodriguez (In re Rodriguez)
Blade Energy Pty Ltd. et al. v. Rodriguez (In re Rodriguez)—9th Cir. BAP 12/19/13. This is an “unpublished” decision. The United States Bankruptcy Appellate Panel of the Ninth Circuit (the "BAP") has affirmed a bankruptcy court’s (Bankruptcy Judge Scott Clarkson, Bankruptcy Court, CD CA) dismissal of an adversary proceeding as a discovery sanction for failure to comply with initial discovery rules and the court’s procedural rules. Facts: The plaintiffs and appellants (the "Appellants") in this case brought an action against appellee and debtor Jacqueline Rodriguez (the "Appellee" or "Ms. Rodriguez") seeking a determination that their claims against her were non-dischargeable…
Tronox v. Kerr-McGee,__BR__, 2013 WL6596696(Bankr SD NY Dec 12, 2013)
Tronox v. Kerr-McGee,__BR__, 2013 WL6596696(Bankr SD NY Dec 12, 2013): adversary proceeding fraudulent transfer decision, referred to as being a “Game Changing Ruling on Fraudulent Transfer and Spin-Offs to Shed Legacy Liabilities” In a ground-breaking environmental fraudulent transfer case, a New York Bankruptcy court held that Kerr-McGee’s transfer of valuable oil and gas assets to a new company and (attempted) spin-off of the legacy liabilities to newly-formed Tronox constituted fraudulent transfer and that the transaction, which left Tronox insolvent, was not made for reasonably equivalent value. Damages between $5.1 and $14.1 billion are anticipated, payable to the debtor (Tronox) bankruptcy…
Janura et. al. v. Saridakis (In re Saridakis), __BR__
Janura et. al. v. Saridakis (In re Saridakis), __BR__, 2013 WL 6488276, 9th Cir.BAP (Cal.), 12/10/13): The U.S. Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") held that post-trial discovery of a default judgment, that apparently was entered in a state court action contemporaneously with, or immediately following, a trial in the bankruptcy court was not newly discovered evidence "of such magnitude that production of it earlier would likely have changed the outcome of the case." What to learn from this decision: Whatever evidence you have, present that evidence before the Court rules for the first time, because its very…