Westlaw Topical Highlights: Bankruptcy, August 15, 2016

August 15, 2016

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.

Professionals: Chapter 13 trustee who allegedly failed to pay all of debtors’ prepetition property taxes was entitled to absolute quasi-judicial immunity.  In re Hunter, 2016 WL 3766142 (Bkrtcy.D.N.M.) A Chapter 13 trustee was entitled to absolute quasi-judicial immunity from the debtors’ claims that she negligently paid the county the amount of its postpetition property tax claim, rather than the amount of its prepetition property tax claim, and that but for the trustee’s error, all of the debtors’ prepetition taxes would have been paid through their plan. Although the debtors used the term “gross incompetence” once in their complaint, they referred to various forms of an “error” ten or more times, and the only fair reading of their allegations was that the trustee was negligent and breached her fiduciary duty of care by mistakenly underpaying the property tax claim. In so ruling, the New Mexico bankruptcy court recognized a split of authority and followed controlling Tenth Circuit precedent. 2016 WL 3766142. (The full-text of the rest of the Topical Highlights is available within Thomson Reuters Westlaw, subscription required).    

Debtor Protections: Judgment creditor’s state-court lawsuit against third party was not subject to the automatic stay.  In re Peeples 2016 WL 3947837 (Bkrtcy.D.Utah)

Abstention: Discretionary abstention was not warranted with respect to debtors’ wrongful foreclosure counterclaims.  In re Danley 2016 WL 3680068 (Bkrtcy.M.D.Ala.)

Professionals: Failure to advise on risks of abandonment was breach of duty of care.  In re Sandpoint Cattle Company, LLC 2016 WL 4036380 (Bkrtcy.D.Neb.)

Abstention: Court would permissibly abstain and equitably remand claims asserted against individual attorney in debtor-firm.  In re James F. Humphreys & Associates, L.C. 2016 WL 3982845 (Bkrtcy.S.D.W.Va.)

Removal: Bankruptcy court would retain jurisdiction over removed state-court proceedings involving alleged wrongful foreclosures of debtors’ real property.  In re Neel 2016 WL 3922904 (Bkrtcy.D.Or.)

Judgment: Trustee was not entitled to new trial based on newly discovered evidence.  In re Keeley and Grabanski Land Partnership 2016 WL 4205926 (C.A.8)

Bankruptcy Estate: Products liability claim based on implants installed prepetition was not estate asset.  In re Harber 2016 WL 3194652 (Bkrtcy.W.D.Pa.)

Sanctions: Creditor’s and his attorney’s failure to dismiss state court trespass and quiet title suits against debtor did not warrant sanctions.  In re Vodenos 2016 WL 3911562 (Bkrtcy.C.D.Cal.)

Debtor Protections: Condominium association’s foreclosure of debtor’s residence was not a “disguised” in personam collection of discharged debts.

 Business Relationships: Bankruptcy court applied proper legal standards in approving proposed key employee incentive plan (KEIP).  United Mine Workers of America 1974 Pension Plan and Trust v. Alpha Natural Resources, Inc. 2016 WL 3742317 (E.D.Va.)

Crimes and Contempt: Party’s alleged failure to transfer life insurance proceeds to debtors’ creditors did not warrant civil contempt sanctions.  In re Hester 2016 WL 3866515 (Bkrtcy.N.D.Tex.)

Settlements: Court could approve settlement over creditor’s objection based, inter alia, on estate’s limited resources.  In re Sabey 2016 WL 3947883 (Bkrtcy.D.Utah)

Claims: Debtor with negative net income cannot reaffirm agreement to purchase car for more than it is worth.  In re Grether 2016 WL 3961268 (Bkrtcy.N.D.Tex.)

Avoidance: Question is certified of whether debtor-firm had “interest in property” in pending hourly matters.  In Matter of Heller Ehrman LLP 2016 WL 4011194 (C.A.9 (Cal.))