Annual Review of Cases and New Development in Bankruptcy 2012
Bankruptcy Section of the San Diego County Bar Association
UNITED STATES SUPREME COURT
Radlax Gateway Hotel LLC v. Amalgamated Bank
566 U.S. ___; 182 L.Ed.2d 967; 132 S.Ct.2064 (2012)
Chapter 11 cram down plan may not provide for sale of encumbered assets free and clear of liens without affording credit bidding rights under 365(k). (Scalia)
Hall v. US
566 U.S. ___; 132 L.Ed.2d 840; 182 S.Ct. 1884 (2012)
Chapter 12 does not create a separate taxable estate so that priority of capital gains tax liability arising from post-petition sales could not be stripped under section 1222(a)(2)(A). (Sotomayor)
UNITED STATES COURT OF APPEAL
FOR THE NINTH CIRCUIT
In Re Bellingham Ins. Agency (Exec. Benefits Ins. Agency v. Arkson)
661 F.3d 476 (9th Cir. 2012)
Bankruptcy judge may not enter final orders in fraudulent conveyance actions, but defendant consented by failing to object to the bankruptcy court.
In re Blixseth (Samson v. Western Capital Partners, LLC)
684 F.3d 865 (9th Cir. 2012)
Automatic stay applies to scheduled and unscheduled collateral when individual debtor fails to file timely a statement of intention under section 521(a)(2)(A) regarding collateral, and trustee does not move under section 362(h)(2) for a determination that collateral is of consequential value or benefit to the estate.
In re Eber (Ackerman v Eber)
687 F3d 1123 (9th Cir. 2012)
Bankruptcy court has discretion to prevent arbitration of claims that are the subject of a complaint to determine debt is non-dischargeable.
In re Flores
692 F.3d 1021 (9th Cir. 2012)
Chapter 13 debtor with above median income but no projected disposable income may confirm a plan that is shorter than 60 months (reconfirming prior 9th Circuit law).
In Re Jacobson (Wolfe v Jacobson)
676 F.3d 1193 (9th Cir. 2012)
CA homestead exemption forfeited by failing to reinvest proceeds within 6 months after post-petition sale.
In re –Kekauoha-Alisa (Kanamu-Kalehuanani v Ameriquest Mortgage Company
674 F.3d 1083 (9th Cir. 2012)
Bankruptcy court may determine validity of postpetition nonjudicial foreclosure sale under federal and state law after stay relief has been granted.
In re Meruelo Maddox Props, Inc.
667 F.3d 1072 (9th Cir. 2012)
Debtor and its 50 subsidiaries can each be single asset real estate cases notwithstanding the “whole enterprise” consolidated, interrelated nature of the business operations.
In re Scholz (Meyer v US Trustee)
699 F.3d 1167 (9th Cir. 2012)
Chapter 13 Debtor must include annuity income as retired railroad employee in calculating projected disposable income notwithstanding Railroad Retirement Acts exemption from attachment or “payment anticipated.”
In re Thorpe Insulation Co. (Thorpe I)
671 F.3d 980 (9th Cir. 2012)
Non-settling asbestos insurers had standing to object to Chapter 11 plan proposed by companies engaged in distribution, installation, and repair of asbestos-related products.
In re Thorpe Insulation Co. (Thorpe II)
671 F.3d 980 (9th Cir. 2012)
Bankruptcy court has discretion to deny arbitration of debtor’s objections to claims filed by creditor insurer.
In re Tober (Tober v Lang)
688 F.3d 1160 (9th Cir. 2012)
Under AZ exemption for cash value of life insurance policy where “child” is beneficiary applies to non-dependent adult daughter.
SELECTED CASES FROM BANKRUPTCY APPELLATE PANEL
FOR THE NINTH CIRCUIT
In re Levesque
473 B.R. 331 (9th Cir. BAP 2012)
Discharged Chapter 7 trustee has standing to be heard on motion to reopen and convert case.
In re Parks
475 B.R. 703 (9th Cir. BAP 2012)
Chapter 13 postpetition 401k contributions by above-medium income debtor are disposable income.
In re Premier Golf Properties
477 B.R. 767 (9th Cir. BAP 2012)
Bank’s lien on rents does not attach to green fees.
In re Salazar
465 B.R. 875 (9th Cir. BAP 2012)
Chapter 7 trustee may not recover tax refund received by debtor during Chapter 13 case and before conversion.
In re Salgado-Nava
473 B.R. 911 (9th Cir. BAP 2012)
Absent extraordinary circumstances, a Chapter 7, 12 or 13 trustee’s compensation under section 362(a) are presumed reasonable and should be approved without any significant additional review.
In re Valley Health System (Kirton v Valley Heath)
471 B.R. 555 (9th Cir. BAP 2012)
Bankruptcy court lacks jurisdiction to hear removed state court action on grounds that action violates confirmed plan.
FOR THE SOUTHERN DISTRICT OF CALIFORNIA
In re Hernandez
468 B.R. 396 (Bankr. S.D. Cal 2012)
A levy by sheriff creates an execution lien under CA law, but the property remains subject to turnover if not released to creditor before the commencement of the bankruptcy case.
CALIFORNIA COURT OF APPEAL
JCC Development Corp v Levy
208 Cal.App.4th 1522 (2012)
Where note provides for default interest after acceleration, default interest was not automatically triggered when note matured.
Ragland v. US Bank Nat. Assn
209 Cal.App.4th 182 (2012)
Borrower may recover for intentional infliction of emotion distress based on false promise to modify loan. (Note: triable issue of fact whether borrower was not in default at the time of the promise.)