Westlaw Topical Highlights: Bankruptcy, October 20, 2014

October 20, 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.

Debtor Protections: Divorce court could characterize discharged debt as marital without violating injunction.  In re Flanders, 2014 WL 5073494 (Bkrtcy.D.Colo.) A Chapter 7 debtor’s discharge of personal liability on a prepetition promissory note only barred collection of the note as a personal liability of the debtor, and did not bar a state divorce court from characterizing the debt as a marital debt, for purposes of dividing marital assets and liabilities in post-discharge divorce proceedings. The state divorce court’s conduct, in treating the debt as a marital debt for purpose of making a distributive award, did not violate the discharge injunction. 2014 WL 5073494. (The full-text of the rest of the Topical Highlights is available within Westlaw Next, subscription  required).      

Debtor Protections: Debtor was entitled to compensatory, but not punitive, damages for stay violations.  In re Ellett 2014 WL 4925990 (Bkrtcy.S.D.Ind

Bankruptcy Estate: Public assistance benefits, if paid prepetition, cannot be exempted.  In re Frueh 2014 WL 4925872 (Bkrtcy.N.D.Ill.)

Discharge: Creditors failed to show that alleged debt of former president was nondischargeable.  In re Coyle 2014 WL 5089732 (Bkrtcy.S.D.Ohio)

Bankruptcy Estate: Debtor’s French-made gas and electric range was a fixture, though other appliances were not.  In re Ryerson 2014 WL 4928988 (Bkrtcy.D.Idaho)

Claims: Written communication to UST in Chapter 11 case constituted an informal proof of claim.  In re Parrott Broadcasting Ltd. Partnership 2014 WL 4928978 (Bkrtcy.D.Idaho)

Crimes and Contempt: Trustee failed to establish that commercial lender that allegedly discovered individual’s Ponzi scheme had duty to alert debtor.  In re Palm Beach Finance Partners, L.P. 2013 WL 8923424 (Bkrtcy.S.D.Fla.)

Plans: Previously raised allegations of fraud did not provide basis to revoke confirmation order.  In re Bennington 2014 WL 4960866 (Bkrtcy.D.Utah)

Discharge: Debtor’s unauthorized sale of cattle subject to FSA’s security interest was done with malice.  In re Shelmidine 2014 WL 4925883 (Bkrtcy.N.D.N.Y.)

Avoidance: Investor’s fictitious Ponzi scheme profits were avoidable fraudulent transfers.  In re Twin Peaks Financial Services, Inc. 2014 WL 4960835 (Bkrtcy.D.Utah)

Discharge: Debtor is denied discharge on fraudulent concealment, but not transfer, theory.  In re Hiett 2014 WL 4929053 (Bkrtcy.M.D.Ala.)

Discharge: Debtors did not cause willful and malicious injury by failing to use creditor’s final balloon payment funds to pay off underlying note.  In re Coates 2014 WL 4960863 (Bkrtcy.D.Utah)

Avoidance: Chapter 7 trustee accepted debtor’s settlement payments in good faith and so they could not be avoided as fraudulent transfers.  In re Berkman 2014 WL 4823833 (Bkrtcy.M.D.Fla.)

Claims: General contractor on debtor’s construction project did not have claim for indemnity implied-in-fact.  In re New Bern Riverfront Development, LLC 2014 WL 4798942 (Bkrtcy.E.D.N.C.)

Claims: “Blue penciling” would not save improper indemnity provision.  In re New Bern Riverfront Development, LLC 2014 WL 4804883 (Bkrtcy.E.D.N.C.)

Debtor Protections: Debtor lacked standing to pursue claim for stay violation in repossessing nonexempt asset.  In re Owen 2014 WL 5139443 (Bkrtcy.N.D.Ala.)

Attorney Fees: Fees of special PACA counsel could not be paid from PACA trust assets.  In re Delta Produce, LP 2014 WL 4674616 (W.D.Tex.)

Claims: Creditor made substantial contribution in part.  In re 1250 Oceanside Partners 2014 WL 4960925 (Bkrtcy.D.Hawai’i)

Discharge: Findings made in conjunction with prepetition divorce award were not entitled to preclusive effect in § 523(a)(2)(A) proceeding.  In re Gonsalves 2014 WL 4956363 (Bkrtcy.D.Md.)

Case Administration: Mere fact debtor and non-debtor may operate as one does not permit substantive consolidation.  In re Howland 2014 WL 4959143 (Bkrtcy.E.D.Ky.)

Debtor Protections: Stay prevented eviction proceedings against holdover tenant occupying under implied year-to-year lease.  Acevedo v. SC Real Estate, LLC 2014 WL 4854242 (N.D.Ill.)