FindLaw Opinion Summaries - Bankruptcy Law

In re McKinney

Wed, 23 Jun 2010 20:00:05 PDT

(U.S. 7th Cir., Bankruptcy Law, Civil Procedure, Judgment Enforcement, Property Law & Real Estate, Tax Law) An appeal by a tax debt owner in Chapter 13 proceedings, arising from the bankruptcy court's denial of its objections to the debtor's proposed plan to pay off the tax debt with interest within five years, is dismissed for lack of jurisdiction as, although the issue that the tax debt owner cares about may have been resolved, its basic dispute with the bankruptcy estate has not been resolved and therefore the judgment of the bankruptcy court is not final.

In re: Trout

Wed, 23 Jun 2010 20:00:05 PDT

(U.S. 10th Cir., Bankruptcy Law) In a bankruptcy trustee's appeal from a decision of the bankruptcy appellate panel affirming the bankruptcy court's determination that, having successfully avoided a preferential vehicle lien under 11 U.S.C. section 547, the trustee was not entitled to a money judgment equal to the value of the avoided liens under section 550(a), the order is affirmed where the bankruptcy estate had been sufficiently returned to its pre-transfer status by avoiding the preferential lien at issue and stepping into the lien priority of the avoided creditor under 11 U.S.C. section 551.

RLI Ins. Co. v. All Star Transp., Inc.

Tue, 22 Jun 2010 20:00:05 PDT

(U.S. D.C. Cir., Bankruptcy Law, Contracts, Insurance Law, Transportation) In an interpleader action by an insurance company to determine its obligations to pay truckers hired by its bankrupt insured under a surety bond, summary judgment for plaintiff-insurer is affirmed where Form BMC 84, which governed such bonds, plainly stated that the face value of the bond was the sum of $10,000 for all claims combined.

In re: Delta Airlines, Inc.

Tue, 22 Jun 2010 20:00:05 PDT

(U.S. 2d Cir., Bankruptcy Law, Contracts, Tax Law) In creditors' appeal from a bankruptcy court's order upholding debtor's objections to their claims under tax indemnification agreements, the order is vacated where: 1) the bankruptcy court's construction of "pay" as that term was used in an agreement at issue nullified debtor's obligation to pay the "Owner Participant" under the agreement upon the occurrence most likely to call its provisions into play 150 the debtor's insolvency; and 2) the bankruptcy court effectively nullified the agreements by stripping them of their ability to protect the Owner Participant in the event of debtor's default.

In re: Wilborn

Mon, 21 Jun 2010 20:00:05 PDT

(U.S. 5th Cir., Bankruptcy Law, Civil Procedure, Class Actions) In an interlocutory appeal from a bankruptcy court's certification of a class action in an adversary proceeding, the order is vacated where a bankruptcy judge may certify a class of debtors under appropriate circumstances but the proposed class in this case did not satisfy the requirements of Federal Rule of Civil Procedure 23 and Federal Bankruptcy Rule of Procedure 7023.

Schwab v. Reilly

Thu, 17 Jun 2010 20:00:02 PDT

(U.S.S.C., Bankruptcy Law) In a Chapter 7 bankruptcy trustee's appeal from the Third Circuit's affirmance of the bankruptcy court's order denying the trustee permission to auction certain equipment so that the debtor could receive the money she claimed exempt and the estate could distribute the remaining value to creditors, the order is reversed where, because debtor gave 147the value of [her] claimed exemption[s]148 on Schedule C dollar amounts within the range the Code allows for what it defines as the 147property claimed as exempt,148 the trustee was not required to object to the exemptions in order to preserve the estate's right to retain any value in the equipment beyond the value of the exempt interest.

In re: Nosek

Tue, 15 Jun 2010 20:00:01 PDT

(U.S. 1st Cir., Bankruptcy Law, Sanctions) In a creditor's appeal from a $250,000 sanction issued sua sponte by the bankruptcy court, the sanction is reduced to $5,000 where: 1) nothing indicated that creditor's claim that it was the holder of the mortgage at issue was a deliberate falsehood or intended in any way to mislead the court or debtor or achieve anything for creditor; and 2) the bankruptcy court did not identify any actual prejudice from the inaccurate claim of holder status.

SEC v. Byers

Tue, 15 Jun 2010 20:00:01 PDT

(U.S. 2d Cir., Bankruptcy Law, Civil Procedure, Criminal Law & Procedure, Securities Law, White Collar Crime) In nonparties' appeal from the district court's order holding that its jurisdiction in rem and its equitable powers provided it with sufficient authority to issue an injunction barring non-parties from filing involuntary bankruptcy petitions against any of the defendants, the order is affirmed where, while it should be sparsely exercised, district courts possess the authority and discretion to enter anti-litigation orders, including those that bar the filing of involuntary bankruptcy petitions absent the district court's permission.

In re: Southern Cal. Sunbelt Developers

Wed, 9 Jun 2010 20:00:02 PDT

(U.S. 9th Cir., Attorney's Fees, Bankruptcy Law, Civil Procedure, Sanctions) In actions seeking punitive damages and attorney's fees arising out of the filing of allegedly meritless involuntary bankruptcy petitions against two alleged debtors, judgment against appellants is affirmed in part where: 1) the bankruptcy court properly concluded that 11 U.S.C. section 303(i) permitted an award of attorney's fees for a section 303 action as a whole, including fees incurred to litigate claims for fees and damages under section 303(i)(1) and (2); 2) section 303(i) permitted an award of punitive damages under section 303(i)(2)(B) in the absence of an award of actual damages under section 303(i)(2)(A); and 3) the bankruptcy court properly held two individual appellants jointly and severally liable for the costs and attorney's fees the debtors incurred in obtaining dismissal of the involuntary petitions. However, the judgment is reversed in part where the bankruptcy court erred by holding the individual appellants liable for the debtors' costs and fees incurred on the section 303(i) motions themselves.

Hamilton v. Lanning

Mon, 7 Jun 2010 20:00:04 PDT

(U.S.S.C., Bankruptcy Law) In an objection by a Chapter 13 bankruptcy trustee to confirmation of debtor's plan because the proposed payment amount was less than the full amount of the claims against debtor, and because she had not committed all of her 147projected disposable income148 to repaying creditors, the Tenth Circuit's affirmance of the bankruptcy court's rejection of the objection is affirmed where, when a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation.

Nat'l Union Fire Ins. Co. v. VP Bldg., Inc.

Fri, 4 Jun 2010 20:00:05 PDT

(U.S. 6th Cir., Bankruptcy Law, Insurance Law, Workers' Compensation) In Chapter 11 proceedings, district court's affirmance of the bankruptcy court's decision disallowing an insurer's petition for administrative expenses, on the ground that the claim was not "actual" and did not benefit the estate, is affirmed as pursuant to In re HNRC Dissolution Co., 371 B.R. 210, (E.D. Ky. 2007), the insurer's request for reimbursement is not an "actual" expense within the meaning of the bankruptcy code.

In re: Moore

Thu, 3 Jun 2010 20:00:05 PDT

(U.S. 5th Cir., Bankruptcy Law, Corporation & Enterprise Law) In a creditor's appeal of the district court's affirmance of the bankruptcy court's approval of a settlement of estate claims over creditor's objection and despite its offer to purchase the claims for higher value, the order is reversed where the claims at issue could be sold as well as compromised, and the bankruptcy court's failure to consider the effect of such a sale was an abuse of discretion.

In re: Velocita Worldwide Logistics Inc.

Thu, 3 Jun 2010 20:00:05 PDT

(U.S. 5th Cir., Bankruptcy Law, Contracts, Injury And Tort Law) In an appeal from the district court's judgment affirming the bankruptcy court and declining to imply a right of contribution among defendants who agreed to be jointly and individually liable for a payment as part of the settlement agreement for a state tort action, the order is affirmed where the obligations in the instant settlement agreement were not analogous to the obligations in surety and guaranty agreements, the contractual arrangements in which Texas courts had allowed contribution claims against co-obligors.

In re: Grossman's Inc.

Wed, 2 Jun 2010 20:00:05 PDT

(U.S. 3d Cir., Bankruptcy Law, Civil Procedure, Consumer Products, Injury And Tort Law, Product Liability) In Chapter 11 proceedings, district court's affirmance of a bankruptcy court's holding that the plaintiffs' tort claims, arising from exposure to asbestos contained in home improvement products sold by the debtor, were not "claims" under 11 U.S.C. section 101(5) is reversed where: 1) the Frenville accrual test is overruled as it imposes too narrow an interpretation of a "claim" under the Bankruptcy Code; 2) a "claim" arises when an individual is exposed pre-petition to a product or other conduct giving rise to an injury, which underlies a "right to payment" under the Bankruptcy Code, and here, plaintiffs' claims arose sometime in 1977, the date the plaintiff alleged that debtor's product exposed her to asbestos; and 3) on remand, whether a particular claim has been discharged by a plan of reorganization depends on factors applicable to the particular case and is best determined by the appropriate bankruptcy court or the district court.

In re: Exide Technologies

Tue, 1 Jun 2010 20:00:02 PDT

(U.S. 3d Cir., Bankruptcy Law, Commercial Law, Contracts, Corporation & Enterprise Law) In a Chapter 11 bankruptcy case, district court's affirmance of the Bankruptcy Court's grant of debtor's motion to reject an agreement to sell substantially all of its industrial battery business on the ground that the agreement was an executory contract, subject to rejection under 11 U.S.C. section 365(a), and that rejection terminated the debtor's obligations under it, is vacated and remanded as: 1) the agreement is not an executory contract because it does not contain at least one ongoing material obligation for the other party; and 2) because the agreement is not an executory contract, the debtor cannot reject it.