Recent Cases
Bechkart v. Newrez LLC, ___F.4th___ (US 4th Circuit Court of Appeals, 4/15/22 decision) appeal 21-1838
Bechkart v. Newrez LLC, ___F.4th___ (US 4th Circuit Court of Appeals, 4/15/22 decision) appeal 21-1838: Decision holds that reliance on advice of counsel is not a complete defense (but is relevant to defense of creditor), when a bankruptcy debtor moves to have creditor held in civil contempt, for allegedly violating the debtor’s bankruptcy discharge, and that. Taggart US Supreme Court case applies to all contempt motions citations in bankruptcy court. However, the Richmond, Va.-based appeals court held that advice of counsel is not a complete defense to civil contempt in bankruptcy court. A couple filed a chapter 11 petition after…
Censo LLC v. Newrez LLC (In re Censo LLC),___BR___ 21-1125 (B.A.P. 9th Cir. April 5, 2022): BAP Describes When a Nonbankruptcy Court’s Order or Judgment, entered AFTER bankruptcy is filed, Does, or Does Not, Violate the bankruptcy automatic Stay
If a proposed Order or proposed Judgment has been submitted to a non-bankruptcy court, but the non-bankruptcy court (such as California Superior Court, or a US District Court), has not yet signed and entered that Order or Judgment, by the date that the party the order or judgment will be against, when entered, files bankruptcy, is the non-bankruptcy court entering the Order or Judgment, after the party the Order or Judgment will be against, when entered, a violation of the bankruptcy automatic stay (11 USC §362(a)). And is the entered Order or Judgment, entered AFTER the bankruptcy is filed, void…
In Guevarra v. Whatley (In re Guevarra)
In Guevarra v. Whatley (In re Guevarra), ___BR___, 2021 WL 1179619 (BAP 9th Cir. Mar. 29, 2021), the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) vacated the bankruptcy court’s decision. Bankruptcy Court had sustained the chapter 7 Trustee’s Objection to debtor having used the CA CCP 703.140(b)(5) “wild card” exemption to exempt proceeds from selling a house, up to the approximately $30,000 limit of the “wild card” exemption. The bankruptcy court’s ruling was based on the grounds that debtor had not acted good faith when debtor claimed the wild card exemption. However, the BAP remanded to the bankruptcy court, so…
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141
Guevarra v. Whatley (In re Guevarra), ___BR___ (B.A.P. 9th Cir. March 25, 2022) BAP appeal Number 21-1141: Ninth Circuit BAP (Bankruptcy Appellate Panel) holds Debtor Can’t Be Punished for Shifting Legal Theories, to amend exemptions claimed by debtor in debtor’s bankruptcy case, after Bankruptcy Judge rules debtor’s originally claimed exemptions With regard to exemptions, a debtor can’t be punished for dramatically shifting legal theories regarding exemptions claimed, in response to an unfavorable decision by the bankruptcy court. That’s the teaching of a March 25 opinion for the Ninth Circuit Bankruptcy Appellate Panel by Bankruptcy Judge Gary A. Spraker. The opinion…
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022)
Kurtin v. Ehrenberg (In re Elieff), 637 B.R. 612 (B.A.P. 9th Cir. Mar. 21, 2022): The 9th Circuit Bankruptcy Appellate Panel (BAP) ruled that when a claim is subordinated, pursuant to 11 USC §510(b), that any liens and encumbrances securing the claim that is subordinated, are subordinated as well. This is a significant decision, because it means subordination of a claim pursuant to Section 510(b) would also subordinate liens and other encumbrances.
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022)
Guzman v. Springfield Hospital Inc., ___F.4th___, 2022 WL 790689 (US Court of Appeals for the Second Circuit, March 16, 2022): Second Circuit Court of Appeals is First Appeals Court to Hold that Small Business Administration was allowed to bar bankruptcy Debtors from Receiving PPP Loans On an issue where the lower courts are divided, the Second Circuit became the first court of appeals to rule that a “loan” under the Paycheck Protection Program, “as a matter of law, . . . is a loan guaranty program and not an ‘other similar grant,’ and thus is not covered by [the antidiscrimination…
Lan Tu Trinh v. citizens Business Banking 141 S.Ct. 1412, 2012 WL 666601 (2021)
Lan Tu Trinh v. citizens Business Banking 141 S.Ct. 1412, 2012 WL 666601 (2021): US Supreme Court Won’t Review Court-Appointed Receivers’ Immunity The U.S. Supreme Court will not second-guess whether court-appointed receivers are shielded from liability for their actions thanks to “quasi-judicial immunity,” leaving in place a recent Third Circuit ruling that granted a receiver those protections.
Manookian v. Burton (In re Cummings Manookian PLLC), ___BR___ (Bankruptcy Court, M.D. Tenn. March 7, 2022), bankruptcy case no. 21-00797
Bankruptcy Court rules that ‘Reasonable Possibility’ of a Surplus gives a Chapter 7 bankruptcy Debtor Standing in Chapter 7 case, to object to something the Chapter 7 bankruptcy trustee wants the Bankruptcy Court to approve Due process considerations mean it’s not harmless error if a debtor was denied standing improperly. Everyone knows that chapter 7 debtors seldom have standing to object to a trustee’s initiatives in bankruptcy court because they can’t show that the outcome will affect the debtor. But how strong a showing must the debtor make about the likelihood of a surplus to establish standing to object? That’s…
Sheen v. Wells Fargo Bank, NA, 2022 DJDAR 2345 (California Supreme Court 3/7/22)
Sheen v. Wells Fargo Bank, NA, 2022 DJDAR 2345 (California Supreme Court 3/7/22): In this landmark decision of the California Supreme Court—the highest court in the California State court system, in a decision that is amazingly BAD for property owners, the California Supreme Court held that lenders/loan servicers do NOT owe borrowers a duty of care in the loan modification process. Borrowers seeking loan modifications always had trouble dealing with lenders/loan servicers who were supposed to be processing the loan modification applications submitted to the lenders/loan servicers by the borrowers. Now it will be functionally impossible to get lenders/loan servicers…
In re Egan Avenatti LLP
In re Egan Avenatti LLP, ___BR___ (Bankr. C.D. Cal. March 3, 2022) bankruptcy case #19-13560: A Bankruptcy Judge in Central District of California Bankruptcy Court issues decision that a party which wants to subpoena a bankruptcy trustee must—pursuant to the “Barton Doctrine” move for and get permission of the Bankruptcy Court to subpoena the Trustee, before subpoenaing the Trustee. Background Someone seeking to issue a subpoena to a trustee is the proper party to seek leave under the Barton doctrine, Judge Clarkson says. However, the Bankruptcy Judge’s decision acknowledges that a 2006 9th Circuit BAP decision In re Media Group,…