New Cases For the Week of
January 8, 2001 - January 12, 2001
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January 12,
2001
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Case
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Court
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Holding
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| In re Burns |
10th Cir. |
Except
as otherwise provided in the Bankruptcy Code, State law cannot form the
basis for an award of attorneys' fees to a party who successfully
litigates a bankruptcy issue. Accordingly, debtors, who prevailed
in undue hardship discharge litigation regarding their student loans,
were not entitled to an award of attorneys' fees for such litigation
even though applicable State law authorized the award of such fees to
the prevailing party in a contract dispute. |
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January 11,
2001
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Case
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Court
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Holding
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In re Smith
(unpublished) |
4th Cir. |
Despite
the clear contrary import of Dewsnup v. Timm, the Court of Appeals
affirms the bankruptcy and district courts which held that a Chapter 7
debtor can strip off a wholly unsecured lien under 11 USC 506(d). |
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January 10,
2001
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Case
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Court
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Holding
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| In re Hassen Imports |
9th Cir. BAP |
A
State law requiring recprocity in attorney fee provisions in contracts
(i.e., requiring that if a contract obligates a debtor to pay a
prevailing creditor's attorneys' fees, a prevailing debtor is entitled
to payment of its fees by a creditor, even in the absence of such
contractual language) cannot form the basis for a debtor's claim against
a creditor for the successful debtor's attorneys' fees incurred to
defend against a relief form stay motion and a contested plan
confirmation. Fee shifting of legal costs incurred in connection with
litigation of pure bankruptcy issues is available only to the extent
provided by the Bankruptcy Code.
When a debtor does not cure a default on or before the
plan effective date, an oversecured creditor may be entitled to interest
at the contractual default rate. However, such entitlement is not
automatic, or even presumed. The creditor must demonstrate that the
default rate is equivalent to damage by "evidence or proof of a
tangible nature." Evidence that the default rate falls within
a generally-accepted range, or is the same rate of default was approved
for the new note under a confirmed plan, is insufficient. |
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January 9,
2001
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Case
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Court
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Holding
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| In re Overland Park Financial Corp. |
10th Cir. |
A
pre-1984 net worth maintenance stipulation by an insolvent saving association's
parent is a commitment to maintain the thrift's capital within the
meaning of 11 U.S.C. 365(o) and 507(a)(___), even though the stipulation
may not be an enforceable executory contract. The parent debtor's
inability to immediately cure the net worth deficiency precluded the
debtor from utilizing Chapter 11, thus requiring the debtor to proceed
under Chapter 7 or forego bankruptcy. |
In
re Williams
(requires Adobe Acrobat to view) |
8th Cir. BAP |
Although
bankruptcy courts generally lose jurisdiction over non-core,
"related to" or "arising under" proceedings upon
dismissal or closure of the main case, bankruptcy courts retain
jurisdiction over core proceedings despite closure or dismissal.
Accordingly, the bankruptcy court had jurisdiction over a debtor's
post-dismissal turnover action seeking to compel a creditor to return to
the debtor residual Chapter 13 funds which the creditor had improperly
received from the trustee. |
In
re Alexander
(requires Adobe Acrobat to view) |
8th Cir. BAP |
Court
overrules In re Lindberg, 735 F.2d 1087 (8th Cir. 1984), holding that
Congress's enactment of 11 U.S.C. 348(f)(1)(A) indicated an intention to
statutorily address the issue of which property is included in a Chapter
7 estate in a case converted from Chapter 13, and when exemptions are
determined. |
In
re Mays
(requires Adobe Acrobat to view) |
Bankr. N.J. |
In
the absence of a contrary rule, attorneys are entitled to rely on and
cite unpublished opinions.
A trial-level opinion issued by another judge in the
same multi-judge district is not binding on the other judges in
the district, although the policy doctrine of stare decisis requires a
subsequent judge to endeavor to follow such an opinion unless he
disagrees.
Since a lien cannot become effective until a debtor
obtains property rights in the subject collateral, a lien arising under
wage garnishment obtained more than 90 days before a bankruptcy is
avoidable as to wages delivered within 90 days before the
bankruptcy. |
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January 8,
2001
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Case
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Court
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Holding
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| In re Huminski |
2d Cir. |
Federal
bankruptcy law preempts all State-law claims for violations of the
automatic stay. Accordingly a federal district court lacks
jurisdiction over any such claims. A federal district court also
should not originally adjudicate claims for violations of the stay,
since such claims should be brought in the Bankruptcy Court, and should
be heard by the federal district court on appeal. |
| In re Old Fashioned Enterprises |
8th Cir. BAP |
Since
PACA's definition of "wholesale and jobbing quantities" is not
ambiguous, the Secretary of Agriculture was not justified in excluding
qualifying restaurants from the scope of PACA, and the district court
erred in holding that a jobber/creditor of such a restaurant was not
entitled to PACA trust protection. |
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