Westlaw Topical Highlights: Bankruptcy, February 10, 2014

February 10, 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.

Professionals: Owner of “credit repair” business functioned as an undisclosed bankruptcy petition preparer.  In re Brown, 2014 WL 293476 (Bkrtcy.W.D.Va.)   The owner of a “credit repair” and financial services business that, inter alia, assisted the Chapter 13 debtor in obtaining a modification of her mortgage loan acted as an undisclosed “bankruptcy petition preparer” (BPP) and hence as a “debt relief agency” in her bankruptcy case, a Virginia bankruptcy court concluded. Although the debtor signed and filed with the bankruptcy court certifications that she received no assistance in the preparation of her petition, the debtor admitted, during a hearing on a sanctions motion filed by the United States Trustee (UST) prior to dismissal of her case, that the owner had prepared the document filed with the court listing her mortgage lender as her sole creditor. The owner also testified that he agreed with the debtor’s testimony that she filed a Chapter 13 based on the advice that he gave her.  2014 WL 293476. (The full-text of the rest of the Topical Highlights is available within Westlaw Next, subscription required). 

Avoidance: Summary disposition was not warranted in trustee’s avoidance proceeding.  In re Saint Catherine Hosp. of Pennsylvania, LLC 2014 WL 37844 (Bkrtcy.M.D.Pa.)

Case Administration: Claim was subject to bona fide dispute, and thus creditor did not have standing to file petition for involuntary bankruptcy.  In re Green Hills Development Co., L.L.C. 2014 WL 380386 (C.A.5 (Miss.))

Claims: Junior underwriters’ claims against debtor for reimbursement and contribution were subject to mandatory subordination.  In re Lehman Brothers Inc. 2014 WL 288571 (Bkrtcy.S.D.N.Y.)

Professionals: Bankruptcy petition preparers’ misconduct warranted injunction prohibiting them from acting as BPPs anywhere in the United States.  In re Falck 2014 WL 322522 (Bkrtcy.S.D.Fla.)

Avoidance: Payments qualified for safe harbor as transfers made by or to financial institution in connection with securities contract.  In re D.E.I. Systems, Inc. 2014 WL 257431 (D.Utah)

Judgment: Bankruptcy court improperly relied on debtor’s sworn declaration as sole basis for granting summary judgment in nondischargeability proceeding.  In re Wank 2014 WL 340893 (9th Cir.BAP (Cal.))

Discharge: Default judgment was entitled to preclusive effect in nondischargeability proceeding.  In re Delaney 2014 WL 345391 (Bkrtcy.D.Conn.)

Professionals: Owner of “credit repair” business functioned as an undisclosed bankruptcy petition preparer.  In re Brown 2014 WL 293476 (Bkrtcy.W.D.Va.)

Dismissal: Court abused its discretion in dismissing nondischargeability proceeding with prejudice for failure to prosecute.  NovaLash, Inc. v. Reed 2014 WL 222436 (S.D.Tex.)

Discharge: Creditor did not plausibly allege basis for excepting debt for dog attack from discharge.  In re Enriguez 2014 WL 294333 (Bkrtcy.E.D.Cal.)

Avoidance: Use of street address in mortgages without legal description did not permit strong-arm avoidance of mortgages.  In re Savage 2014 WL 443987 (Bkrtcy.W.D.Ark.)

Debtor Protections: Automatic stay applied to proceeding to collect unpaid municipal waste and recycling fees.  In re Iezzi 2014 WL 341092 (Bkrtcy.E.D.Pa.)

Avoidance: Lien of bank that had not filed proof of claim could not be avoided pursuant to § 506(d).  In re Burkhart 2014 WL 271627 (Bkrtcy.D.Md.)

Bankruptcy Estate: Inheritance acquired more than 180 days postpetition was part of Chapter 13 estate.  In re Dale 2014 WL 460783 (9th Cir.BAP (Ariz.))

Discharge: That asset transfers were effected with actual fraudulent intent could be inferred.  In re Wreyford 2014 WL 413494 (Bkrtcy.D.N.M.)

Case Administration: Chapter 13 debtor was not entitled to “exigent circumstances” deferral of credit-counseling requirement.  In re Taal 2014 WL 350905 (1st Cir.BAP (N.H.))

Removal: Court could not abstain in removed state-court action, warranting denial of motions to remand and for stay relief.  In re STAR Dynamics Corp. 2014 WL 407370 (Bkrtcy.S.D.Ohio)

Case Administration: Debt eligibility requirements are nonjurisdictional and subject to being waived.  General Lending Corp. v. Cancio 2014 WL 320367 (S.D.Fla.)