Westlaw Topical Highlights: Bankruptcy, November 18, 2013

November 18, 2013

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.

Jurisdiction: Bankruptcy court lacked Article III authority to enter final judgment on debtor’s tort and contract claims.  In re BP RE, L.P., 2013 WL 5975030 (C.A.5 (Tex.)) A bankruptcy court lacked constitutional authority to enter a final judgment on the Chapter 11 debtor’s non-core, state-law tort and contract claims against the prospective purchaser of its real property, the Fifth Circuit Court of Appeals ruled, relying on the Supreme Court’s decision in Stern v. Marshall, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). Even though the debtor’s common-law claims, if successful, would have augmented the bankruptcy estate, the claims neither derived from nor depended upon any agency regulatory regime, and they were not necessary to resolution of the estate. Instead, the claims were at the heart of the federal judiciary’s Article III powers. In addition, the Court of Appeals held, agreeing with the Sixth Circuit’s decision in Waldman v. Stone, 698 F.3d 910, where a bankruptcy court lacks Article III authority to enter final judgment on a non-core claim, a party cannot cure the constitutional deficiency by consenting to having its claim heard in bankruptcy court. 2013 WL 5975030.  (The full-text of the rest of the Topical Highlights is available within Westlaw Next, subscription required).

Avoidance: “Reasonably equivalent value” determination had to be in context of larger transaction of which sale of debtors’ assets was part.  In re Waterford Wedgwood USA, Inc. 2013 WL 5878481 (Bkrtcy.S.D.N.Y.)

Judgment: Defaulting defendants were entitled to relief, though trustee’s complaint was properly served.  In re FKF 3, LLC 2013 WL 5942271 (S.D.N.Y.)

Bankruptcy Estate: Bankruptcy estate did not include debtor’s business telephone numbers and web addresses.  In re Alexandria Surveys Intern., LLC 2013 WL 5962986 (E.D.Va.)

Appeals: Debtor was not entitled to stay pending appeal of order denying his motions for abstention and remand.   In re Wade 2013 WL 5944091 (Bkrtcy.W.D.Tenn.)

Attorney Fees: Sharing of fees between Florida firm and local bankruptcy counsel violated fee-sharing provision of the Code.  In re Kuykendall 2013 WL 5935111 (Bkrtcy.S.D.Tex.)

Discharge: Court lacked power to extend deadline for seeking revocation of debtor’s discharge.  In re Defusco 2013 WL 5818268 (Bkrtcy.D.Mass.)

Debtor Protections: Repair shop’s retention of motor vehicle to maintain its possessory lien did not violate stay.  In re Vega 2013 WL 3157516 (Bkrtcy.E.D.Mich.)

Professionals: Law firm was disqualified from representing debtor-LLC’s opponent in adversary proceeding.  In re Ralph Roberts Realty, LLC 2013 WL 1136659 (Bkrtcy.E.D.Mich.)

Bankruptcy Estate: Motor Vehicle Code governed whether execution sale of debtor’s motor vehicle was completed prepetition.   In re Dixon 2013 WL 1397464 (Bkrtcy.E.D.Mich.)

Avoidance: Debtor did not received reasonably equivalent value from mortgage payments it made on behalf of its sole shareholder.   In re Duplication Management, Inc. 2013 WL 5922894 (Bkrtcy.D.Mass.)

Case Administration: Individual debtor commenced Chapter 11 case in bad faith.  In re Carter 2013 WL 5575095 (Bkrtcy.D.Md.)

Debtor Protections: No purpose would be served by lifting stay to allow creditor to pursue claims that had been discharged.  In re Bennett 2013 WL 5989439 (8th Cir.BAP (Neb.))

Bankruptcy Estate: Debtor’s interest in homestead property owned by the entireties with nondebtor-spouse was presumptively 50% of its value.  In re Bradigan 2013 WL 5977946 (Bkrtcy.W.D.N.Y.)

Discharge: Arbitrator’s findings on malicious injury to animal claim were entitled to preclusive effect in dischargeability proceeding.  In re Chlarson 2013 WL 5922979 (Bkrtcy.C.D.Cal.)

Claims: Electricity was “service,” whose provision did not support administrative expense claim.  In re NE Opco, Inc. 2013 WL 5880660 (Bkrtcy.D.Del.)

Plans: Chapter 13 debtors could not deduct payments for “stripped” mortgage when calculating PDI.  In re Garrepy 2013 WL 5946156 (Bkrtcy.D.Mass.)

Claims: Stipulation did not bar class plaintiff from using judgment against debtors as predicate to sue steering system manufacturer.  In re Old Carco LLC 2013 WL 5951858 (Bkrtcy.S.D.N.Y.)