Recent Cases
Keathley v. Buddy Ayres Construction Inc., 25-6 (Sup. Ct.)
Keathley v. Buddy Ayres Construction Inc., 25-6 (Sup. Ct.).The US Supreme Court granted certiorari to resolve a circuit split on the standard to employ before invoking judicial estoppel when a chapter 13 debtor failed to disclose a personal injury claim. The date for oral argument has not been set, but the case should be heard in time for a decision before the end of the term in June. The case came to the Supreme Court from the Fifth Circuit, where invocation of judicial estoppel only requires a “plausible” motive for failure to disclose a personal injury claim. One of the…
In re Sun, __BR__24-20581 (Bankr. D.N.J. Sept. 29, 2025)
Bankruptcy Judge Meisel implores the Third Circuit to follow other circuits on dismissing bad faith debtors’ chapter 13 petitions but with bars to refiling. Regarding the right of a chapter 13 debtor to dismiss a case filed in bad faith, Bankruptcy Judge Stacey L. Meisel of Newark, N.J., said it all in the second paragraph of her opinion: A Chapter 13 Debtor possesses an absolute right to dismiss his bankruptcy case . . . even if the debtor acts in bad faith. However, this does not mean that a debtor gets a free pass to abuse the bankruptcy process. A…
In re Joiner, 25-30396 (Bankr. W.D.N.C. Sept. 2, 2025)
In re Joiner, 25-30396 (Bankr. W.D.N.C. Sept. 2, 2025) is a fascinating new Bankruptcy Court decision about the interplay of 11 USC 1190(3)—which is one of the Bankruptcy Code provisions specific to SubV Chapter 11 bankruptcy cases–and 11 USC 1111(b). This case is significant because many bankruptcy attorneys are not aware 11 USC 1190(3) exists, much less how it interfaces with 11 USC 1111(b) Contrary to the language in Section 1190(3), the bankruptcy court did not allow bifurcation of a lien that wasn’t used to acquire a home but was used for the debtor’s small business. In Subchapter V of…
Hayes v. United States of America (In re Applied Machinery Rentals, LLC)
Hayes v. United States of America (In re Applied Machinery Rentals, LLC), 2025 WL 1297432 (April 30, 2025, Bankruptcy Ct, Western District of North Carolina ): The Bankruptcy Court for the Western District of North Carolina (the Court) recently ruled that a chapter 7 trustee could use Bankruptcy Code §§ 548 and 550 to recover from the Internal Revenue Service (IRS) taxes which had been paid on behalf of the Debtor’s principal with property of the estate. It held that the IRS was the initial transferee even though the payment came from a bank account in the principal’s name and…
Brown v. Thermal Surgical LLC, 24-127 (2d Cir. Aug. 8, 2025)
US Court of Appeals for the Second Circuit barred offensive use of claim preclusion based on ‘fairness’ , and hinted that offensive claim preclusion might never be permitted. Second Circuit held that a creditor may not use an uncontested claim allowance in an offensive use of claim preclusion if it would be “unfair.” In her August 8 opinion, Circuit Judge Beth Robinson stopped short of deciding whether offensive claim preclusion is never permissible. If offensive claim preclusion were squarely present, she hinted that it might never be allowed. Uncontested Claim Allowance The debtor had been a sales representative for his…
American Bankruptcy Institute (“ABI”) e-newsletter, of 8/5/25, reports that July 2025 Commercial Chapter 11 Bankruptcy Filings Increased 78 Percent over Last Year (2024)
Commercial chapter 11 filings totaled 911 in July, an increase of 78 percent over the 512 filings in July 2024, according to data provided by Epiq AACER, the leading provider of U.S. bankruptcy filing data. The overall July commercial filing total of 2,997 represented a 26 percent increase from the July 2024 commercial filing total of 2,371. Small business filings, captured as subchapter V elections within chapter 11, increased 30 percent to 206 in July 2025 from 159 the previous year.
Biden-Era Rule on Medical Bill Reporting on Credit Reports
Credit & Collection e-newsletter of 7/16/25 reports: A US District Court Judge Sean Jordan’s ruling, on 7/15/25, that the Consumer Financial Protection Bureau (CFPB) does not have the authority to enact a Biden-era rule on medical bill reporting on credit reports, could force individual states to take up the issue of whether credit reporting agencies (Experiean, Equifax, TransUnion) can be forced to remove reporting about unpaid medical bills from individuals’ credit reports, or can be forced not to put reporting about unpaid medical bills on individuals’ credit reports. U.S. District Judge Sean Jordan, a 2019 appointee of President Donald Trump,…
US Supreme Court’s decision in Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano, Doesn’t Preclude Annulling the Stay, Eleventh Circuit Says; there is a Circuit Split on this issue
On an issue where the lower courts are split, the Eleventh Circuit held that the Supreme Court’s decision in Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano, 589 U.S. 57 (2020), does not prevent bankruptcy courts from annulling the automatic stay under Section 362(d)(1). In Acevedo, the Supreme Court strictly limited the ability of federal courts to enter orders nunc pro tunc. In his July 8 opinion, Chief Circuit Judge William H. Pryor, Jr., adopted the position taken by the Ninth Circuit Bankruptcy Appellate Panel in a 2020 opinion by Bankruptcy Judge William J. Lafferty, III. In…
In re GOL Linhas Aéreas Inteligentes SA, 225-4610 (S.D.N.Y. June 5, 2025)
The Office of US Trustee has already appealed the following US District Court, New York decision– In re GOL Linhas Aéreas Inteligentes SA, 225-4610 (S.D.N.Y. June 5, 2025)– to the US Court of Appeals for the 2nd Circuit, to test the question of, whether after the US Supreme Court Purdue Pharma decision a chapter 11 plan can provide non-debtors get releases, unless creditors OPT OUT, of that provision, instead of NO non-debtor releases, unless creditors Opt-In (ie affirmatively agree to non-debtors being granted releases. The debtor agreed not to raise equitable mootness on an appeal only challenging nondebtor opt-out releases.…
Chenault-Vaughan Family Partnership Ltd. V. MDC Reeves Energy LLC (In re MTE Holdings LLC), 23-1916 (3d Cir. May 7, 2025), appeal 23-1916
Third Circuit Holds: Magistrate Judges May Issue Final Orders on Bankruptcy Appeals if all parties to the appeal consent to that (which does not happen very often) The Third Circuit splits from Seventh and Tenth Circuit opinions dating from 1987 and 1990. Creating a circuit split, the Third Circuit held that “a magistrate judge may enter final judgment in a bankruptcy appeal” if there is “consent of the parties and referral by a district court.” The Seventh and Tenth Circuits had ruled to the contrary in 1987 and 1990, holding that magistrate judges may not enter final orders in bankruptcy…