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Bankruptcy Year In Review 2015

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Bankruptcy Year In Review San Diego County Bar Association February 23, 2016

UNITED STATES SUPREME COURT

Baker Botts LLP v. Asarco LLC 192 L.Ed.2d 208 (2015)

Bankruptcy Code does not permit bankruptcy courts to award attorney’s fees to professionals employed by the estate for work performed in defending a fee application in court.

Bank of America NA v. Caulkett 192 L.Ed.2d 52 (2015)

Chapter 7 debtor may not strip of wholly unsecured junior lien.

Bullard v. Blue Hills Bank 191 L.Ed.2d 621 (2015)

Chapter 13 Debtor cannot immediately appeal order denying confirmation of plan because it is not a final order.

Harris v. Biegelahn 191 L.Ed.2d 783 (2015)

Undistributed plan payments from Chapter 13 debtor’s wages and held by the Chapter 13 trustee at the time of the case’s conversion to Chapter 7 must be returned to the debtor, not distributed to creditors.

Wellness International Network, Ltd. v. Sharif 191 L.Ed.2d 911 (2015)

Bankruptcy courts may enter final orders in Stern Claims with the parties knowing and voluntary consent.

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

In re Adamson Apparel, Inc. 785 F.3d 1285 (9th Cir 2015)

Insider guarantor absolved of any preference liability where he had waived indemnification rights against the debtor.

In re Blendheim 803 F.3d 477 (9th Cir. 2015)

Chapter “20” debtor may void lien where proof of claim filed by secured creditor was disallowed for failure to respond to objection even if debt was not dischargeable.

In re Cloobeck 788 F.3d 1243 (9th Cir. 2015)

Chapter 7 Trustee could not pay administrative taxes incurred by estate without first providing notice to creditors with an opportunity for a hearing.

In re Hokulani Square, Inc. 776 F.3d 1083 (9th Cir. 2015)

Chapter 7 Trustee compensation may not be based on the value of a secured creditors credit bid since no money was disbursed.

In re Landmark Fence Co. 801 F.3d 1099 (9th Cir. 2015)

Ninth Circuit lacks jurisdiction to review District Court’s order vacating bankruptcy court’s judgment and remanding for further fact findings because it is not a final order.

Northbay Wellness Group, Inc. v. Beyries 789 F.3d 956 (9th Cir. 2015)

Bankruptcy court abused its discretion in applying doctrine of unclean hands to deny creditors claim that debtor-attorney stole $25,000 from medical marijuana dispensary.

In re Schwartz-Tallard 803 F.3d 1095 (9th Cir. 2015)

Bankruptcy code authorizes award of attorney’s fees incurred in prosecuting action for damages for violation of automatic stay (overruling Steinberg v. Johnson)

In re Tristar Esperanza Properties, LLC 782 F.3d 492 (9th Cir. 2015)

Judgment for debtor’s failure to repurchase membership interest in LLC is subject to mandatory subordination under section 510(b).

BANKRUPTCY APPELLATE PANEL FOR THE NINTH CIRCUIT COURT OF APPEALS

In re Elliott 529 B.R. 747 (9th Cir. BAP 2015)

Bankruptcy court lacks jurisdiction to revoke debtor’s discharge under section 727(d)(1) where complaint filed more than one year after discharge was granted.

In re EPD Investment Co, LLC 523 B.R. 680 (BAP 9th Cir. 2015)

Trustee can avoid transfers under CA fraudulent transfer statute up to nine years before date of complaint, and seven years before date of petition.

In re Heers 529 B.R. 734 (BAP 9th Cir. 2015)

Fraud while acting in a fiduciary capacity proven where probate court found debtor acted with a conscious and reckless disregard of the risks to the beneficiaries.

In re Ruiz 541 B.R. 892 (BAP 9th Cir. 2015)

That the Chapter 7 Trustee’s calculated compensation exceeds the distribution to unsecured creditors is not itself an extraordinary circumstance to reduce the compensation.

In re Plyam 530 B.R. 456 (BAP 9th Cir. 2015)

California state court judgment for punitive damages based on malice, oppression or fraud is not entitled to preclusive effect because California jury instruction does not require the same “willfulness” required by section 523(a)(6).

In re Schlegel 526 B.R. 333 (BAP 9th Cir. 2015)

A confirmed Chapter 13 plan may be dismissed where debtor paid the required dollar amount, but not the approved percentage dividend set forth in the plan.

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

Copeland v. Techtronics Industries, Co., LTD 95 F.Supp.3d 1230 ( S.D.Cal. 2015)

Judicial estoppel does not bar personal injury case not disclosed in debtor’s bankruptcy petition, but Trustee would be substituted as real party in interest.

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

In re Beckman 517 B.R. 228 (Bankr. S.D.Cal. 2015 Adler)

Upon conversion of Chapter 13 case to Chapter 7 prior to plan confirmation, all post petition wages in possession of Chapter 13 trustee are disbursed to the Debtor and not to administrative expenses.

In re Brown 539 B.R. 853 (Bankr. S.D.Cal. 2015 Latham)

Bar exam preparation loan is an Education Loan.

February 23rd, 2016  |  Categories: Business Insolvency & Creditors’ Rights