Recent Cases
In re McCormick, 894 F.3d 953 (8th Cir. 2018)
In re McCormick, 894 F.3d 953 (8th Cir. 2018): The US Court of Appeals for the Eighth Circuit holds that attorney’s fees owed to an oversecured lender arose under the parties’ agreements, even though the borrowers’ obligations resulted in nonconsensual judgment liens that did not include an award of fees. This decision, if adopted in other Circuits, such as the US Court of Appeals for the Ninth Circuit (our Circuit for bankruptcy courts and US district Courts in California) increases the ability of oversecured creditors, to add attorneys fees to those creditors claims in bankruptcy cases. An oversecured creditor is…
McNair vs. Maxwell & Morgan PC, 893 F.3d 680 (9th Cir. 2018)
McNair vs. Maxwell & Morgan PC, 893 F.3d 680 (9th Cir. 2018): 9th Circuit Court of Appeals holds that an attorney who does a judicial foreclosure on a piece of real property owned by an individual homeowner, is a “debt collector”, who is subject to the Fair Debt Collection Practices Act (“FDCPA”) and that a Court can order that attorney to pay damages, to the consumer homeowner, per the FDCPA, if the attorney did not comply with what the FDCPA requires. An attorney doing a judicial foreclosure would almost certainly NOT have done the things the FDCPA requires doing. More…
Lehman Brothers Holdings Inc. v. 1st Advantage Mortgage LLC
Lehman Brothers Holdings Inc. v. 1st Advantage Mortgage LLC, ___BR___ (Bankr. SD NY 8/13/18) case #16-01019: Bankruptcy Court 8/15/18 decision rules Bankruptcy Court Still Has Jurisdiction Seven Years After Confirmation of Chapter 11 plan: Almost 10 years after Lehman Brothers began the biggest Chapter liquidation bankruptcy in history, Bankruptcy Judge Shelley C. Chapman ruled that the bankruptcy court still has jurisdiction to host new lawsuits against third parties. She also held that New York is the proper venue for suing defendants from all around the country, even though Lehman’s chapter 11 plan was confirmed almost seven years ago. Comment: bankruptcy…
Elite of Los Angeles, Inc. v. Hamilton (In re Hamilton)
Elite of Los Angeles, Inc. v. Hamilton (In re Hamilton), 2018 WL 3637905 (9th Cir. BAP July 31, 2018), the Ninth Circuit Bankruptcy Appellate Panel reversed an Order of the Bankruptcy Court for the Southern District of California, where the Bankruptcy Court’s Order had confirmed the chapter11 plan of the debtor, who was an individual. The BAP ruled that the debtor had not satisfied the standards of 11 USC 1129, that had to be met, in order for the individual debtor’s Chapter 11 plan to be confirmable. A major defect in the plan was that plan enjoined creditors that held…
In re BMT-NW Acquisition, LLC, 582 B.R. 846 (Bankr. D. Del.2018)
A bankruptcy court in Delaware has held that a trustee’s constructive fraudulent transfer claims stemming from a failed leveraged buyout were not subject to the newly heightened pleading standards articulated by the Supreme Court. [In re BMT-NW Acquisition, LLC, 582 B.R. 846 (Bankr. D. Del.2018).] Cites to and distinguishes the US supreme court cases, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), which hold that fraud must be pleaded with particularly, in a Complaint that alleges fraud. In In…
Lamar, Archer & Cofrin, LLP v. Appling, 16-1215 (Sup. Ct. June 4, 2018)
Lamar, Archer & Cofrin, LLP v. Appling, 16-1215 (Sup. Ct. June 4, 2018): US Supreme Court rules, on 6/4/18, that a bankruptcy debtor’s False Statement About One Asset Isn’t Grounds for holding a debt nondischargeable. This US Supreme Court decision resolves a circuit split on Section 523(a)(2)(B) and the meaning of “financial condition.” The Supreme Court resolved a split of circuits today by holding that a false statement about one asset must be in writing to provide grounds for rendering a debt nondischargeable under Section 523(a)(2). The 15-page opinion by Justice Sonia Sotomayor focused primarily on the plain language of…
Lorenzen v. Taggart (In re Taggart), ___F.3d ___ (9th Cir. April 23, 2018) appeal #16-35402
Violation of Discharge Is Now Difficult to Prove in the Ninth Circuit An unreasonable but good faith, subjective belief that there is no injunction bars a finding of contempt in the Ninth Circuit. A creditor’s subjective, good faith belief that its action does not violate the discharge injunction precludes finding the creditor in contempt, even if the discharge injunction did apply and the creditor’s belief was “unreasonable,” the Ninth Circuit ruled in an April 23 opinion. The opinion appears to mean that a creditor can act in good faith even if the creditor’s belief is unreasonable. In other words, litigation…
Phillips v. Gilman (In re Gilman), ___F.3d___ (9th Cir. April 13, 2018), case 16-55436
Order granting or Denying a Homestead Exemption Remains a Final Order in the Ninth Circuit. US Supreme Court case Bullard v. Blue Hills Bank, 135 S. Ct. 1686, 191 L. Ed. 2d 621, 83 U.S.L.W. 4288 (2015) did not undermine the automatic appealability of orders granting or denying homestead exemptions. Is an order granting or denying a homestead exemption a final, appealable order? The Ninth Circuit concluded that Bullard did not undermine the circuit’s existing precedent and ruled that an order upholding a homestead exemption is appealable automatically. In Bullard, the Supreme Court held that an order denying confirmation of…
In re Cresta Technology Corp. ___BR___, (B.A.P. 9th Cir. April 6, 2018), BAP case number 17-1186
9th circuit BAP rules that a post-petition transfer occurs when an ordinary check is honored, not when it is delivered, in light of US Supreme Court case Barnhill An unauthorized post-petition transfer occurs when an ordinary check is honored by the bank, not when the check is delivered, the Ninth Circuit Bankruptcy Appellate Panel said in the course of overruling its own precedent in view of later Supreme Court authority. In Barnhill v. Johnson, 503 U.S. 393 (1992), the Supreme Court ruled that the date of honor of an ordinary check is the date of transfer with regard to preferences…
In re Bianchi, ___BR___ (Bankr. D. Id. March 20, 2018, case #12-221)
Bankruptcy Judge Papas, D. Idaho rules: ‘Snarky’ or Factually Incorrect Emails Are Not Grounds for Rule 9011 Sanctions Neither oral statements nor emails are sanctionable under Rule 9011, Judge Pappas says. “Snarky and unprofessional” emails written by a debtor’s counsel to a chapter 13 trustee are not grounds for sanctions under Rule 9011 because they were not contained in pleadings presented to the court, according to Bankruptcy Judge Jim D. Pappas of Boise, Idaho. The March 20 opinion by Judge Pappas is a story about a lawyer behaving badly. Although the facts suggest that the debtor’s lawyer was acting unprofessionally,…