Annual Review of Cases and New Development in Bankruptcy 2013
Bankruptcy Year In Review
San Diego County Bar Association
February 4, 2014
UNITED STATES SUPREME COURT
Bullock v BankChampaign, NA,
___ U.S. ___, 133 S.Ct. 754, 185 L.Ed.2d 922 (2013)
Defalcation while acting in a fiduciary capacity requires actual knowledge of wrongdoing or a conscious disregard of a substantial and unjustifiable risk to be nondischargeable under section 523(a)(4).
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
AhQuin v. County of Kaui Dept of Transportation
733 F.3d 267 (9th Cir 2013)
Debtor’s failure to schedule existing lawsuit did not support dismissal of suit under judicial estoppel where debtor reopened case and disclosed asset. Adopting minority view, held that judicial estoppel requires finding of subjective intent to deceive court.
Anwar v. Johnson
720 F3d 1183 (9th Cir. 2013)
Bankruptcy court does not have discretion to extend retroactively deadline to file 523 action despite ECF issues.
Carpenters Pension Trust Fund for NoCA v Moxley
734 F.3d 864 (9th Cir. 2013)
Withdrawal liability to pension trust fund was not incurred in a “fiduciary capacity”
In re Fitness Holdings, International
714 F.3d 1141 (9th Cir. 2013)
Bankruptcy court has the power to recharacterize loan from insider as an equity investment (applying CA law), and to avoid prepetition payment.
In re Flores
735 F.3d 855 (9th Cir. 2013)
An above-median income chapter 13 debtor must propose a 5 year plan even if there is no “projected disposable income.” (Overruling Kagenveama (2008)).
In re Garcia
709 F.3d 861 (9th Cir. 2013)
Debtor (real estate agent) may exempt Mercedes using CA wildcard exemption and could avoid non-purchase money lien on exempt property if a tool of debtor’s trade.
In re Griffin
719 F.3d 1126 (9th Cir. 2013)
Lender establishes standing to seek stay relief by providing a copy of the note and a declaration establishing its possession of the original.
Jones v. US Trustee
736 F.3d 897 (9th Cir. 2013)
False oaths by debtor in schedules that, if known, would be grounds for denying a discharge are grounds to revoke a discharge.
Hedlund v Educational Resources Institute (In re Hedlund)
718 F.3d 848 (9th Cir. 2013)
Reversing district court’s de novo review, bankruptcy court’s finding of good faith for partial discharge of a student loan by a 33 year old were not clearly erroneous.
In re Marciano
708 F.3d 1123 (9th Cir. 2013)
A creditor whose judgment is on appeal holds a bona fide claim for purpose of eligibility to file an involuntary petition.
In re Marshall
723 F.3d 1032 (9th Cir. 2013)
Affirming confirmation of Chapter 11 plan, the Court held that the “best interest of creditors” test does not apply to creditors who never filed a proof of claim, and rejected the notion that the bankruptcy code was unconstitutional because it permitted the filing of a voluntary petition without proof of insolvency.
In re Perle
725 F.3d 1023 (9th Cir. 2013)
Creditor’s lawyer’s knowledge of bankruptcy filing could not be imputed for purpose of timeliness of complaint challenge dischargeability of debt as to creditor where lawyer learned after completion of the representation of the creditor in relation to the debtor
In re Plant Insulation
734 F.3d 900 (9th Cir. 2013)
Settling insurer injunction in confirmed Chapter 11 plan did not satisfy the requirements of section 524(g) as to future asbestos claimants.
In re Welsh
711 F.3d 1120 (9th Cir. 2013)
Good faith does not require that a Chapter 13 plan consider social security income because that is excluded from the disposable income calculation nor does it require that the court consider payments to secured creditors.
Willms v Sanderson
723 F.3d 1094 (9th Cir. 2013)
Bankruptcy court may not sua sponte grant motion to extend time to file section 523(a) complaint where creditor moved only to extend the time to file a section 527 complaint.
In re Wilshire Courtyard
729 F3.d 1279 (9th Cir. 2013)
Bankruptcy court has “related to” jurisdiction post-confirmation to determine whether reorganization under plan could be recharacterized by CA FTB as a disguised sale.
BANKRUPTCY APPELLATE PANEL FOR THE NINTH CIRCUIT COURT OF APPEALS
In re Gasprom
500 B.R. 598 (9th Cir. BAP 2013)
Foreclosure sale after trustee of corporate Chapter 7 debtor abandoned property is void because stay remains as to property “of the debtor.”
In re Utnehmer
499 B.R. 705 (BAP 9th Cir. 2013)
A loan agreement that provides for converting the debt into equity and for profit sharing insufficient to make the borrower a fiduciary of the creditor as an implied partnership agreement.
In re Village at Lakeridge, LLC
Unpublished (BAP 9th Cir. 2013)
A “joint defense” or “common interest privilege” requires both: (a) a common interest; and (b) an oral or written agreement to pursue a joint legal strategy.
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA
In re Kelly
499 B.R. 944 (S.D.Cal. 2013) (Curiel)
Affirming nondischarge judgment for fraud in loan modification, sufficient circumstantial evidence in the record to infer knowledge by spouse of fraud.
UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA
In re Gamboa
(Bankr. SD.Cal. 2013 (Latham)
Chapter 13 debtors may not confirm less than full payment plan where some of their income is used to pay for net loss on income producing property.
In re Vassau
499 B.R. 864 (Bankr. S.D.Cal. 2013) (Bowie)
Undersecured junior lender receives an avoidable preference by payment to senior lender made within 90 days of bankruptcy.
Bank of America NA v. Roberts
217 Cal. App. 4th 1386 (2013)
Amendment to short sale antideficiency statute did not apply retroactively.
Edwards v. Broadwater Casitas Care Center
221 Cal.App.4th 1300 (2013)
Chapter 13 debtor may appeal state court award of attorney’s fees and costs against debtor, notwithstanding confirmation of Chapter 13 plan and failure to object to proof of claim.
Siliga v. Mortgage Electronic Registration System, Inc.
219 Cal.App.4th 75 (2013)
Borrower lacked standing to complain about assignee’s alleged lack of authority to assign.