New Cases For the Week of
February 12, 2001 - February 16, 2001
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February 16,
2001
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Case
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Court
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Holding
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In
re Orso
(DBN Subscription Required) |
5th Cir. |
Despite
a State exemption for annuities, and a stream of payments (purchased by
a liable tortfeasor to fund a settlement with the injured debtor) that
nominally and technically was an annuity, the Court ruled that form
cannot triumph over substance. When a putative annuity is in fact
an artificial form for another type of nonexempt asset, such as an
account receivable or a debt owed by or tortfeasor to a victim, the
annuity form will be disregarded, making the stream of payments property
of the bankruptcy estate. |
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February 14,
2001
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Case
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Court
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Holding
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In
re: Jan Weilert R.V., Inc.,
(DBN Subscription Required) |
9th Cir. BAP |
In
the recreational vehicle sale industry, it it is the ordinary course of
business for a dealer to payoff an original lender of a trade-in vehicle
within 45 days of trade-in or within 20 days of the resale by the dealer
of the trade-in. The bankruptcy court did not err in finding that
payments made outside these periods were not in the ordinary course of
business (as measured by objective industry standards), and such
payments were recoverable as preferences. |
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February 13,
2001
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Case
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Court
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Holding
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In
re Golant
(DBN Subscription Required) |
7th Cir. |
The
bankruptcy court did not err in striking a debtor's pleadings entering a
default judgment under 11 USC 727 against a debtor/attorney who
willfully and in bad faith refused to fully comply with a bankruptcy
court's discovery orders. |
In
re Zepecki
(Adobe Acrobat Reader required) |
8th Cir. BAP |
Although
the attorney claimed he was engaged to assist the debtor in a tax-free
exchange, the bankruptcy court did not err in ordering a Chapter 7
debtor's attorney to disgorge $32,840 of the $40,000 in attorneys' fees
that the attorney had received in the few months prior to the filing of
the bankruptcy petition. The court found that the services were
rendered "in contemplation of bankruptcy, within the meaning of 11
USC 329. |
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February 12,
2001
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Case
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Court
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Holding
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Cox
v. Zale Delaware, Inc.
(DBN Subscription Required) |
7th Cir. |
When
a debtor who signs a reaffirmation agreement which is not filed with the
court is not represented by an attorney, relief under 11 USC 524(a) (the
discharge injunction) is available only in the court that the injunction
arises from, and only in the form of a contempt action. In such an
action, the debtor can seek recission of the contract and restoration of
the status quo (including however, return of the subject collateral to
the secured creditor and payment of the interim rental value of the
collateral to the creditor). Attorneys' fees are also recoverable,
and punitive damages might be recoverable upon a finding of criminal
contempt. Class action treatment of such claims is not
appropriate.
In cases where a debtor signing an unfiled
reaffirmation agreement is represented by an attorney, there is no
violation of 524(a) when the creditor seeks postdischarge payment of the
reaffirmed debt, and the above-referenced relief is unwarranted. |
In
re Permaco
(DBN Subscription Required)
unpublished |
4th Cir. |
11
USC 524(e) does not deprive a bankruptcy court of subject matter
jurisdiction to modify the lien rights of a creditor as to property
owned by a nondebtor where the creditor votes for, and consents to, the
confirmed plan of reorganization. When the bankruptcy court in a
prior bankruptcy filed by the individual guarantors of a corporate
secured debt conformed a plan that limited the creditor's claim to the
principal amount, the creditor's successor in interest was bound by that
plan even though: (i) the individuals' case had been dismissed
postconfirmation for failure to perform, (ii) the individuals'
bankruptcy case had not been substantively consolidated with that of the
corporation, and (iii) the provision limiting the creditor to its
principal amount could have been (but was not) challenged by the
creditor at confirmation. |
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