Westlaw Topical Highlights: Bankruptcy, November 11, 2013

November 11, 2013

BankruptcyWestlaw Topical Highlights for Bankruptcy provides summaries of significant federal and state judicial decisions and legislative and administrative activities affecting Bankruptcy law. A Westlaw subscription is required to access the documents linked from this page.

Case Administration: Bankruptcy court had constitutional authority to decide veil-piercing issue in nondischargeability proceeding. In re Rouette 2013 WL 5740182 (Bkrtcy.D.Conn.)  A bankruptcy court, as a non-Article III court, had the constitutional authority under the public rights exception to consider and decide the issue of whether the corporate veil could be pierced so as to hold Chapter 7 debtors liable for the judgment debt of their alleged wholly-owned corporation in the judgment creditor’s nondischargeability proceeding. In so holding, the bankruptcy court noted that a dischargeability proceeding is at the heart of a bankruptcy court’s power to issue discharges of debt, and that deciding the veil-piercing issue would permit it to resolve fully the issue of nondischargeability. 2013 WL 5740182. (The full-text of the rest of the Topical Highlights are available within Westlaw Next, subscription required)

Avoidance: Secured creditor’s untimely proof of claim results in mere claim disallowance, not lien avoidance.  In re Shelton 2013 WL 5878438 (C.A.8)

Claims: Section 1111(b)(1)(A) applies regardless of whether nonrecourse lien creditor’s claim is secured by any value in collateral.  In re B.R. Brookfield Commons No. 1 LLC 2013 WL 5881565 (C.A.7 (Wis.))

Limitations: Liquidating trust established under confirmed plan was entitled to benefits of tolling provision.  Antioch Litigation Trust v. McDermott Will & Emery LLP 2013 WL 5797630 (S.D.Ohio)

Plans: While debtor could modify plan to provide for surrender of collateral, she had to do so in good faith.  In re Tucker 2013 WL 5782932 (Bkrtcy.N.D.Miss.)

Discharge: Debtor’s alleged addiction to prescription drug did not sufficiently explain deficiency in financial records.  In re Liberatore 2013 WL 5429875 (Bkrtcy.E.D.Pa.)

Avoidance: Debtor’s distribution of term loan proceeds was settlement payment within meaning of settlement payment exemption.  Crescent Resources Litigation Trust ex rel. Bensimon v. Duke Energy Corp. 2013 WL 5532162 (W.D.Tex.)

Discharge: Ex-wife’s divorce attorney had standing to bring nondischargeability proceeding.  In re Collins 2013 WL 5846861 (E.D.Va.)

Avoidance: Alleged fraudulent transfers represented transfer of “interest of the debtor in property.”  In re Vaughan Co. Realtors 2013 WL 5744727 (Bkrtcy.D.N.M.)

Case Administration: Debtors lacked a reasonable explanation for their failure to comply with financial management course requirements.  In re Johnson 2013 WL 3776493 (Bkrtcy.D.Minn.)

Claims: Creditor must perfect prepetition rent assignment according to state law in order to extend its security interest postpetition.  In re Manuel Mediaviavilla, Inc. 2013 WL 5741536 (Bkrtcy.D.Puerto Rico)

Debtor Protections: Court had to balance equities prior to granting retroactive relief from automatic stay.  In re Gasprom, Inc. 2013 WL 5783723 (9th Cir.BAP (Cal.))

Avoidance: Debt, while intended to finance a shift in debtor’s operations, was “incurred in the ordinary course.”  In re C.W. Min. Co. 2013 WL 5913943 (10th Cir.BAP (Utah))

Discharge: Lack of tax returns warranted denial of debtor’s discharge.  In re Adalian 2013 WL 5913211 (Bkrtcy.M.D.Pa.)

Bankruptcy Estate: Debtor was entitled to federal bankruptcy exemption for his interest in annuity acquired by one-time “rollover.”  In re Miller 2013 WL 5878445 (8th Cir.BAP (Minn.))

Case Administration: Petitioning creditor who used involuntary petition as litigation tactic acted in bad faith.  In re Forever Green Athletic Fields, Inc. 2013 WL 5874060 (Bkrtcy.E.D.Pa.)

Real Property: Special stipulation did not convey easement to use debtor’s airport property.  In re Flyboy Aviation Properties, LLC 2013 WL 5775143 (Bkrtcy.N.D.Ga.)

Attorney Fees: Bankruptcy court did not abuse its discretion in awarding prevailing party attorney fees in dischargeability action.  In re Montano 2013 WL 5890681 (9th Cir.BAP (Cal.))

Plans: Bankruptcy court may confirm Chapter 13 plan only if duration meets applicable commitment period, even if debtor has no projected income.  In re Flores 2013 WL 4566428 (C.A.9 (Cal.))

Discharge: Statement respecting debtor’s financial condition must concern his overall financial circumstances.  In re Feldman 2013 WL 5933688 (Bkrtcy.E.D.Pa.)

Discharge: Belated, post-assessment returns claiming less tax was owed were not “returns,” for dischargeability purposes.  Perry v. U.S. 2013 WL 5883405 (M.D.Ala.)

Avoidance: Amended complaints adding actual fraudulent transfer claims related back.  In re Grube 2013 WL 343459 (Bkrtcy.C.D.Ill.)

Discharge: Chapter 7 debtor did not have right to jury trial in nondischargeability proceeding.  In re Neves 2013 WL 5701649 (Bkrtcy.S.D.Fla.)

Discharge: Debtor concealed assets through transfers to family members, warranting denial of his Chapter 7 discharge.  In re Martinez 2013 WL 5353077 (Bkrtcy.N.D.Cal.)

Bankruptcy Estate: Debtor’s interest in guaranteed payments under employment agreement as part of bankruptcy estate—Certiorari Denied.  Longaker v. Boston Scientific Corp. 2013 WL 5428764 (U.S.)

Plans: Judicial-sale exception to Louisiana’s litigious redemption statute applied to option acquired through Chapter 11 plan.  CHS, Inc. v. Plaquemines Holdings, L.L.C. 2013 WL 5926055 (C.A.5 (La.))

Bankruptcy Estate: Chapter 13 debtor’s inheritance, which postdated debtors’ petition by more than 180 days, was property of the estate.  Carroll v. Logan 2013 WL 5781211 (C.A.4 (N.C.))

Parties: Nonparty creditor could not, on its own motion, join as plaintiff to nondischargeability complaint against debtors.  In re Rivera Lugo 2013 WL 5310761 (Bkrtcy.D.Puerto Rico)

Avoidance: “Wrong payor” theory of liability asserted in amended complaint related back to original complaint, and thus was timely.  In re Damon’s Intern., Inc. 2013 WL 5740098 (Bkrtcy.W.D.Pa.)

Discovery: Documents prepared after agreement terminated and referencing litigation were protected by work production doctrine.  In re Berks Behavioral Health LLC 2013 WL 5703342 (Bkrtcy.E.D.Pa.)

Case Administration: Bankruptcy court had constitutional authority to decide veil-piercing issue in nondischargeability proceeding.  In re Rouette 2013 WL 5740182 (Bkrtcy.D.Conn.)