Recent Cases
In re Kipnis, 555 BR 877 (Bankr. S.D. Fla. 2016)
In re Kipnis, 555 BR 877 (Bankr. S.D. Fla. 2016). A bankruptcy court in Florida has held that a bankruptcy trustee had the power to use the Internal Revenue Service’s 10 year statute of limitations in pursuing fraudulent transfer litigation on behalf of the bankruptcy estate, instead of the shorter statute of limitations (usually 4 years if recorded transfer, or 7 years if not recorded transfer). Kipnis is contrary to an earlier bankruptcy case, In re Vaughan, 498 B.R. 297, at 304 (Bankruptcy Court D. New Mexico 2013), which cites to Marshall v. Intermountain Elec. Co., Inc., 614 F.2d 260,…
SBA v. Bensal (9th Cir. 2017) 853 F.3d 994: California Probate Code §283
SBA v. Bensal (9th Cir. 2017) 853 F.3d 994: California Probate Code §283 states that a disclaimer of an inheritance is not a fraudulent transfer: “A disclaimer is not a voidable transfer by the beneficiary under the Uniform Voidable Transactions Act…” Therefore, California state law allows a person to disclaim an inheritance, without the disclaimer of inheritance constituting a fraudulent transfer. Individuals quite often do disclaim inheritances, shortly before filing bankruptcy, so the inheritance will not become part of the individual’s “bankruptcy estate”, when the individual thereafter files bankruptcy. Purpose of the disclaimer of inheritance is to prevent the Chapter…
Oskoui vs. J.P. Morgan Chase Bank, N.A, ___F3d ___, 2017 WL 957206 (9th Cir. 2017)
Oskoui vs. J.P. Morgan Chase Bank, N.A, ___F3d ___, 2017 WL 957206 (9th Cir. 2017): Ninth Circuit holds that when a lender encouraged a borrower to make thousands of dollars in payments in pursuit of an unavailable mortgage modification program, the lender engaged in deceptive practices in violation of the California Unfair Competition Law. FACTS: A homeowner asked her lender for a home mortgage modification pursuant to the federal “HAMP” standards. Her lender allegedly misled her into making interim payments, even though the lender knew that she was not eligible for modification. In total, she made almost $34,000 in fruitless…
Weil v. Elliott (In re Elliott),___F.3d___, No. 16-55359 (9th Cir. June 14, 2017)
Weil v. Elliott (In re Elliott),___F.3d___, No. 16-55359 (9th Cir. June 14, 2017): Holds the one-year deadline for seeking revocation of a debtor’s discharge order is not jurisdictional and may therefore be waived. When Edward Elliott filed his chapter 7 bankruptcy petition he failed to mention one important asset: his home. He received a discharge under section 727(a). Fifteen months later, when the trustee discovered the fraudulent nondisclosure, she filed an adversary complaint seeking an order vacating the discharge under section 727(d)(1). Section 727(e)(1) permits a trustee to seek revocation of discharge within one year of the discharge order. Mr.…
Strickland v. U.S. Trustee (In re Wojcik), 560 B.R. 763 (9th Cir. BAP 2016)
In Strickland v. U.S. Trustee (In re Wojcik), 560 B.R. 763 (9th Cir. BAP 2016), the U.S. Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) affirmed the lower court’s ruling that a paralegal’s use of the word “legal” in her business name and advertisements violated the strict liability provisions of 11 U.S.C. section 110(f). In doing so, the BAP upheld an order requiring the disgorgement of fees plus the payment of penalties. The BAP ruled that Strickland’s use of the business name “Low Cost Paralegal Services,” and her use of the word “paralegal” and “legal” throughout her website violated…
Henson v. Santander Consumer USA, Inc., ___ S.Ct.___, 2017 WL 2507342
Henson v. Santander Consumer USA, Inc., ___ S.Ct.___, 2017 WL 2507342: US Supreme Court Did NOT Widen Debt-Collection Abuse Law In Santander Case, decided 6/12/17 The U.S. Supreme Court on Monday declined to expand a federal law targeting alleged harassment and threats in debt-collection tactics, saying oversight of distressed debt buyers that then become collection entities isn’t within the court’s purview. The court unanimously upheld a lower court’s dismissal of a proposed consumer class-action suit against auto-lender Santander Consumer USA Holdings Inc. over allegations it violated the Fair Debt Collection Practices Act. The case hinged in large part on the…
Shovlin v. Klass (In re Klass), ___F.3d___ (3d Cir. June 1, 2017). Case number 15-3341
Shovlin v. Klass (In re Klass), ___F.3d___ (3d Cir. June 1, 2017). Case number 15-3341: holds that under proper circumstances a Chapter 13 debtor can complete plan payments MORE than 60 months after the plan was filed, and receive a Chapter 13 discharge, even though 60 months is the maximum length for a Chapter 13 plan. Second Circuit also has a case with a similar holding. Neither 9th Circuit Court of Appeal, nor any other Circuits besides the 3rd and 2nd circuits, have ruled on the issue. The Third Circuit’s June 1 opinion by Circuit Judge Cheryl Ann Krause lays…
First Southern National Bank v. Sunnyslope Housing LP (In re Sunnyslope Housing LP), ___F3d___ (9th Cir. EN BANC May 26, 2017) (case #12-17241)
First Southern National Bank v. Sunnyslope Housing LP (In re Sunnyslope Housing LP), ___F3d___ (9th Cir. EN BANC May 26, 2017) (case #12-17241) In an En banc decision, 8 to 3, the US Court of Appeals for the Ninth Circuit, on 5/26/17 reversed a 9th Circuit decision from 2016 on cramdown valuation, for “cramming down” a Chapter 11 plan on a secured creditor which rejected the Chapter 11 debtor’s proposed Chapter 11 plan. EN BANC, the Ninth Circuit held that Cramdown Value Is Not the Higher of Foreclosure or Replacement Value, it is replacement value. Specifically, the en banc 9th…
In re Cowen, ___F.3d___, 2017 Westlaw 745596 (10th Cir. 2017)
In re Cowen, ___F.3d___, 2017 Westlaw 745596 (10th Cir. 2017): The US Court of Appeals for the Tenth Circuit held in Cowen that when two creditors “passively retained” the debtor’s property, that they did not violate the automatic stay by “passively retaining” debtor’s property (which they had possession of at the time debtor filed bankruptcy), because the creditors did NOT engage in any affirmative acts to “control” the debtor’s property. However, the creditors’ post-petition forgery and perjury did violate the stay. Note that (as stated in Cowen) the Second, Seventh, Eighth, and Ninth Circuits (California is in the Ninth Circuit)…
Giacchi v. U.S. (In re Giacchi), ___F.3d___ (3d Cir. 5/5/17)
Giacchi v. U.S. (In re Giacchi), ___F.3d___ (3d Cir. 5/5/17): US Court of Appeals for the Third Circuit, in 5/5/17 decision, Joins Majority of Circuits in the Split Over Whether Tax Can Ever be Discharged, that is owed on Late-Filed Tax Returns The split widens on the one-day-late rule, where the First, Fifth and Tenth Circuits hold that a tax debt never can be discharged under Section 523(a)(1)(B)(i) if the underlying tax return was filed even one day late. The Fourth, Sixth, Seventh, Eighth and Eleventh Circuits, on the other hand, employ the four-part test resulting from a 1984 Tax…