Recent Cases
Barclay vs. Boskoski, ___F.4th___, 2022 WL 16911862 (9th Circuit Court of Appeals. November 14, 2022)
In Barclay, a published decision, the United States Court of Appeals for the Ninth Circuit found that the bankruptcy court correctly applied the $600,000 homestead exemption in effect on the filing date of the bankruptcy petition, rather than the significantly lower homestead exemption available when the judgment lien was recorded seven years prior. As a result, the judgment lien was avoided in its entirety. FACTS In 2014, Greek Village, LLC, Konstantinos Manassakis, and Aimilia Manassakis recorded a $256,075.95 judgment lien (“Greek Village Judgment Lien”) against Debtor Dejan Boskoski’s Carlsbad, California home. Because the debtor was married in 2014, the maximum…
In re Trinity Legacy Consortium LLC,___BR___ (Bankr. D.N.M. Sept. 25, 2023), case # 22-10973
The Standard for Enlarging the Time to File a Subchapter V Plan Judge Jacobvitz of New Mexico follows Judge Harner of Maryland in developing a standard for deciding whether a Subchapter V debtor may extend the time for filing a plan. In the form of an opinion, Bankruptcy Judge Robert H. Jacobvitz of Albuquerque, N.M., wrote a treatise identifying the best definition of Section 1189(b), which requires a debtor in Subchapter V of chapter 11 to file a plan within 90 days of filing, but allows the court to “extend the period if the need for the extension is attributable…
In re Boteilho Hawaii Enterprises, Inc., ___BR___ (Bankr. D. Hawaii 10/24/23): Bankruptcy Judge decision explains why a hypothetical chapter 7 sale isn’t necessarily ‘FMV’
A chapter 7 trustee’s obligation to sell can mean that chapter 7 prices don’t fit the ordinary definition of fair market value. An opinion by Bankruptcy Judge Robert J. Faris explains why the valuation of a debtor’s assets in a chapter 11 cramdown can be lower than “fair market value” in an ordinary appraisal, because a hypothetical chapter 7 trustee is typically compelled to sell expeditiously without the luxury of operating the business. Sitting in Honolulu, Judge Faris composed a template for someone writing a cramdown opinion where the focus is valuation. Judge Faris also sits on the Ninth Circuit…
In re Litton,___BR___ 23-10189 (Bankr. W.D. La. Sept. 18, 2023)
In re Litton,___BR___ 23-10189 (Bankr. W.D. La. Sept. 18, 2023): holds nonpurchase money debt service on a car is NOT a deductible ‘ownership of vehicle’ cost in ‘13’, which debtor can deduct in determining debtor’s monthly disposable income which debtor must generally pay into chapter 13 plan, each month, to fund chapter 13 plan Courts aren’t fully in agreement, but most hold that non-purchase money debt service on a car isn’t an ‘ownership cost’ deducted from current monthly income to arrive at disposable income in chapter 13. On a question where the courts are divided, Bankruptcy Judge John S. Hodge…
In re Elassal, ___BR___, 2023 WL 5537061 (Bankr. E.D. Mich. Aug. 28, 2023)
This new bankruptcy court decision notes that cases use 5 different procedures (with differing outcomes) regarding who gets to keep the money (above money to pay of liens on house) when a chapter 13 debtor sells the debtor’s house, in chapter 13, after the bankruptcy court has confirmed (approved) debtor’s chapter 13 plan, and the confirmed chapter 13 plan provides debtor keeps the house. When, post-confirmation, a chapter 13 debtor sells his or her home, who gets the benefit of the appreciation: the debtor, or his or her creditors? Judge Randon in Michigan adopted the so-called “estate replenishment approach” and…
Castleman v. Burman (In re Castleman), 75 F. 4th 1052 (9th Cir. Court of Appeals, July 28, 2023)
The Ninth Circuit Court of Appeals (Ninth Circuit) recently held that post-petition, pre-conversion appreciation in value of an asset belongs to the chapter 7 bankruptcy estate, not the debtors, following conversion from chapter 13 in good faith. As the lengthy dissent pointed out, this ruling created a circuit split with a decision from the Tenth Circuit, Rodriguez c. Barrera (In re Barrera), 22 F. 4th 1217 (10th Cir. 20220. Barrera holds that when a ch13 bankruptcy case is converted to chapter 7, it is the chapter 7 bankruptcy estate (trustee) that gets any appreciation in assets, such as real property,…
Castleman v. Burman (In re Castleman), ___F.4th ___ (9th Cir. July 28, 2023), appeal #22-35604
Castleman v. Burman (In re Castleman), ___F.4th ___ (9th Cir. July 28, 2023), appeal #22-35604: Splitting with the Tenth Circuit, the Ninth Circuit holds that chapter 13 debtors lose post-petition appreciation in a home if the case converts to chapter 7. Such “Circuit splits” usually eventually get decided by the US Supreme Court. Splitting with the Tenth Circuit, a divided panel on the Ninth Circuit held that the post-petition appreciation in the value of a home belongs to creditors when a chapter 13 debtor converts the case to chapter 7. The dissenter on the Ninth Circuit said that the majority…
Kirkland v. U.S. Bankruptcy Court (In re Kirkland), ___F.4th___ (9th Cir. July 27, 2023), appeal 22-70092
Kirkland v. U.S. Bankruptcy Court (In re Kirkland), ___F.4th___ (9th Cir. July 27, 2023), appeal 22-70092: Ninth Circuit Court of Appeals holds that Trial Subpoenas Can’t Compel Zoom Testimony of a witness subpoenaed to testify, where the Court is located more than 100 Miles Away from where the witness is located. Comment of attorney KPMarch, Esq: Rules should be updated to allow this The court’s ability to compel trial testimony by video doesn’t eradicate the 100-mile limitation on issuance of trial subpoenas. The Ninth Circuit used a bankruptcy case to grant a writ of mandamus and quash a subpoena that…
East Coast Foods Inc. v. Development Specialists Inc. (East Coast Foods Inc.), ___BR___ 23-1034 (B.A.P. 9th Cir. July 19, 2023): BAP holds 28 USC 959(a) Isn’t an Exception to the Barton Doctrine
28 USC 959(a) doesn’t permit suing a trustee for breach of fiduciary duty outside of bankruptcy court. A nonprecedential opinion by the Ninth Circuit Bankruptcy Appellate Panel explains that 28 U.S.C. § 959(a) doesn’t mean what its words seem to say. The section says: Trustees, receivers or managers of any property, including debtors in possession, may be sued, without leave of the court appointing them, with respect to any of their acts or transactions in carrying on business connected with such property. A chapter 11 trustee retained a management consultant to operate the business. Allegedly, the consultant didn’t disclose that…
Washington v. Kijakazai, ___F4th ___ (9th Cir. July 3, 2023), case 22-35320
Washington v. Kijakazai, ___F4th ___ (9th Cir. July 3, 2023), case 22-35320: Ninth Circuit Court of Appeals holds that a Pro Se (not represented by attorney) Litigant consented to magistrate judge hearing and deciding litigant’s case (there a social security case), by litigant not timely objecting to magistrate judge hearing and eciding litigant’s case. Expect that this “did parties consent to non-article III judge hearing and finally deciding case” issue will be applied in bankruptcy adversary proceedings—such as fraudulent transfer adversary proceedings–where bankruptcy judges (who, like magistrate judges–which are Article I judges, not Article III judges–lack jurisdiction to issue a…