Westlaw Topical Highlights: Bankruptcy, November 3, 2014

November 3, 2014

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.

Appeals: Equitable mootness doctrine applies in liquidation cases.  In re BGI, Inc. 2014 WL 5462477 (C.A.2 (N.Y.)) The Second Circuit Court of Appeals has held that the doctrine of equitable mootness applies to appeals arising from Chapter 11 liquidation proceedings, just as to appeals arising from Chapter 11 reorganization proceedings. Furthermore, the Chateaugay analysis into whether the presumption of equitable mootness arising from substantial consummation of a Chapter 11 plan has been rebutted, based upon factors such as whether court can still order some effective relief and whether the parties who will be adversely affected by such relief received notice of the appeal and had an opportunity to participate in the proceedings, also applies, like equitable mootness doctrine itself, in the liquidation context. A district court did not abuse its discretion in dismissing, as equitably moot, appeals brought by holders of gift cards issued by a bankrupt book seller from bankruptcy court orders disallowing their proofs of claim and a proposed class claim as untimely filed and confirming the book seller’s liquidating Chapter 11 plan. The plan had been substantially consummated, and the appellants failed to show that unsecured creditors, the distribution to which could be substantially affected by the relief that appellants requested, had received adequate notice of the appeal, or that they had exercised the requisite diligence in attempting to obtain a stay pending appeal. 2014 WL 5462477.  (The full-text of the rest of the Topical Highlights is available within Westlaw Next, subscription  required).       

Professionals: Trustee lacked authority to pursue even generalized claim on creditors’ behalf.  In re Harman 2014 WL 5380799 (Bkrtcy.N.D.Ga.)

Claims: Forbearance agreement was sufficient to abandon previous accelerations of debtor’s mortgage debt.  In re Rosas 2014 WL 5149418 (W.D.Tex.)

Case Administration: Debtor demonstrated that he filed Chapter 13 petition in good faith.  In re Zaver 2014 WL 5304864 (Bkrtcy.M.D.Pa.)

Debtor Protections: Creditor’s willful stay violation in repossessing vehicle did not merit an award of punitive damages.  In re Banks 2014 WL 5320539 (Bkrtcy.M.D.Ga.)

Leases and Contracts: Contract between debtor and private golf club was “executory.”  In re Rappaport 2014 WL 4922634 (Bkrtcy.D.N.J.)

Case Administration: Debtor’s inability to confirm plan was “cause” for dismissing case.  In re Merhi 2014 WL 5114284 (Bkrtcy.E.D.N.Y.)

Appeals: Leave to pursue interlocutory appeal from discovery orders is denied.  In re Pawlak 2014 WL 5320987 (D.Md.)

Case Administration: Prepetition purchase supports dismissal of Chapter 7 case as abusive.  In re Nadeau 2014 WL 5325224 (Bkrtcy.D.R.I.)

Claims: Lender was not entitled to prepetition attorney fees.  In re Southside, LLC 2014 WL 5406888 (Bkrtcy.N.D.Ga.)

Claims: Proof of claim had to be disallowed on limitations grounds.  In re Lewis 2014 WL 4799432 (Bkrtcy.E.D.Va.)

Professionals: Professional may simultaneously represent creditor and trustee.  In re Hanckel 2014 WL 5339001 (Bkrtcy.D.S.C.)

Avoidance: Genuine issues of material fact remained as to applicability of the ordinary course of business defense.  In re Conex Holdings, LLC 2014 WL 5139240 (Bkrtcy.D.Del.)

Claims: Creditor was entitled to administrative expense claim in part.  In re Grasso 2014 WL 5100092 (Bkrtcy.E.D.Pa.)

Leases and Contracts: Individual employees cannot be heard on motion to reject CBA.  In re AMR Corp. 2014 WL 5369774 (S.D.N.Y.)

Plans: Court had independent authority to rule on administrative expense request.  In re Energy Conversion Devices, Inc. 2014 WL 5324346 (Bkrtcy.E.D.Mich.)

Case Administration: Successive Chapter 12 case would be dismissed with prejudice.  In re Pressley 2014 WL 5310629 (Bkrtcy.D.S.C.)

Claims: Judicial estoppel applied to bar former employee’s claims against employer.  Cotita v. Verizon Wireless 2014 WL 4668824 (W.D.Ky.)

Bankruptcy Estate: Former investors’ claims against debtor’s lender were direct claims, not derivative claims belonging to the bankruptcy estate.  In re R.E. Loans LLC 2014 WL 465301 (Bkrtcy.N.D.Tex.)

Avoidance: Lien on debtor’s house securing debt to former spouse did not secure a “domestic support obligation” and so was avoidable.  In re Phillips 2014 WL 5363145 (Bkrtcy.D.N.M.)

Discharge: Attorney fees award in child custody dispute were nondischargeable.  In re Beacham 2014 WL 5426646 (Bkrtcy.S.D.Tex.)

Plans: Actual damages of $100,000 awarded for mortgage servicer’s failure to comply with confirmation orders.  In re Castle Home Builders, Inc. 2014 WL 5363780 (Bkrtcy.N.D.Ill.)

Settlements: Employee benefit plan’s interest in settlement proceeds was superior to that of debtor’s attorney.  In re Rickard 2014 WL 5449749 (Bkrtcy.W.D.Pa.)

Parties: Debtor lacked standing to challenge Chapter 7 trustee’s administration of estate.  In re Symka, Inc. 2014 WL 5339541 (Bkrtcy.D.Colo.)

Discharge: Fees payable directly to ex-husband’s attorney were nondischargeable support.  In re Edinger 2014 WL 5293561 (Bkrtcy.E.D.N.C.)

Avoidance: Filing of prepetition notices of lis pendens by debtor affected trustee’s strong-arm avoidance powers.  In re Faison 2014 WL 5281053 (Bkrtcy.E.D.N.C.)

Leases and Contracts: Debtors could reject continuing economic terms of expired CBAs.  In re 710 Long Ridge Road Operating Company, II, LLC 2014 WL 407528 (Bkrtcy.D.N.J.)