Westlaw Topical Highlights: Bankruptcy, May 23, 2016

May 24, 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.

Debtor Protections: Coding error can result in willful violation of stay.  In re Silk, 2016 WL 1411608 (Bkrtcy.D.Mass.) While postpetition collection letters may have been mailed out to a Chapter 13 debtor automatically, as a result of an error in the manner in which the debtor’s account was coded on the creditor’s computer system, this did not alter the fact that these postpetition collection letters, which were mailed out despite the fact that the creditor had received notice of the debtor’s Chapter 13 filing, were in nature of “willful” violations of the automatic stay, for which damages could be awarded. However, even assuming that it was appropriate to make an attorney fee award in favor of the debtor as damages for the stay violation, even in a case in which the debtor presented no evidence of any other damages, only an award of fees reasonably incurred was mandated by 11 U.S.C.A. § 362(k). Moreover, in deciding what was a reasonable attorney fee award, the court could take into account that the debtor had sustained no other damages, and that the debtor and his attorney immediately moved for damages without informally requesting that the collection letters cease. 2016 WL 1411608  (The full-text of the rest of the Topical Highlights is available within Thomson Reuters Westlaw, subscription required).    

Attorney Fees: Attorney’s post-dismissal services were rendered “in connection with the bankruptcy case.”  In re Hirsch 2016 WL 2898061 (Bkrtcy.W.D.Mich.)

Bankruptcy Estate: Foreclosure of debtor’s residential lot did not result in termination of her homestead exemption in adjacent vacant lot.  May 23, 2016 In re Vaghini 2016 WL 1544735 (Bkrtcy.D.Mass.)

Debtor Protections: Creditor was entitled to stay relief to continue its pending state-court action.  In re Danzik 2016 WL 1458321 (Bkrtcy.D.Wyo.)

Judgment: Res judicata barred pawnbroker from objecting to treatment of its claim under confirmed Chapter 13 plan.  In re Northington 2016 WL 2584822 (Bkrtcy.M.D.Ga.)

Bankruptcy Estate: Change of venue necessitated denial of debtor’s exemption claims.  In re Sann 2016 WL 1399330 (Bkrtcy.D.Mont.)

Debtor Protections: Pursuit of deficiency judgment was violation of discharge injunction.  In re Covelli 2016 WL 2858534 (Bkrtcy.S.D.N.Y.)

Discharge: Judgment debt arising from debtors’ personal guaranty did not fall within discharge exception for debts for willful and malicious injury.  In re Steele 2016 WL 1456144 (Bkrtcy.S.D.Ind.)

Discharge: Series of omissions by which debtor failed to disclose assets constituted “false oaths” warranting denial of his discharge.  In re Beaudry 2016 WL 1417452 (Bkrtcy.N.D.N.Y.)

Discharge: Debtor’s conduct regarding lottery ticket proceeds rose to level of fiduciary “defalcation.”  In re Huynh 2016 WL 1403272 (Bkrtcy.N.D.Ga.)

Claims: Former employee was not judicially estopped from asserting discrimination and wrongful termination claims against employer.  Sherman v. Wal-Mart Associates, Inc. 2016 WL 1669019 (N.D.Tex.)

Avoidance: It was debtor’s insolvency at time of alleged preference that controlled.  In re Vazquez Vazquez 2016 WL 1411646 (Bkrtcy.D.Puerto Rico)

Appeals: Lenders lacked standing to appeal bankruptcy court’s substantive consolidation order.  Opportunity Finance, LLC v. Kelley 2016 WL 2848587 (C.A.8 (Minn.))

 Bankruptcy Estate: Judgment was abandoned to debtor by operation of law upon entry of final decree.  In re: Concepts Plus, LLC 2016 WL 2344244 (Bkrtcy.W.D.Mich.)

Bankruptcy Estate: Debtor had a vested remainder interest in real property at commencement of bankruptcy case, which was property of bankruptcy estate.  In re Amaral 2016 WL 1618310 (Bkrtcy.D.Mass.)

Claims: Trustee’s allegations relating to alleged undercapitalization and insolvency of debtor were sufficient to state claim for breach of fiduciary duty.  In re KNH Aviation Services, Inc. 2016 WL 1456143 (Bkrtcy.D.S.C.)

Leases and Contracts: Application of business judgment test supported granting of debtors’ motion to reject long-term bauxite sales agreement.  In re Noranda Aluminum, Inc. 2016 WL 1417923 (Bkrtcy.E.D.Mo.)

Debtor Protections: Creditor’s postpetition requests of guarantor did not violate stay.  In re Whitman-Nieves 2016 WL 1413673 (Bkrtcy.D.Puerto Rico)