New Cases For the Week of
March 12, 2001 - March 16, 2001
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March 16,
2001
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Case
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Court
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Holding
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In
re Siegfreid
(DBN Subscription Required) |
10th Cir. |
In
a construction transaction in which the property owner quitclaimed a lot
to a builder who then used the lot as collateral for a construction
loan, paid part of the loan to the former owner (who repurchased the
improved lot from the builder at the completion of construction), and
used the remaining loan funds to complete the construction and pay
operating expenses, the builder and its owner incurred a
nondischargeable debt under 11 USC 523(a)(4) when they failed to pay all
subcontractors. A State statute requires builders to hold all
funds received by builders for construction projects to be held in trust
for subcontractors, creating a fiduciary relationship within the meaning
of 11 USC 523(a)(4). By paying some of the construction loan
proceeds to the former owner, and using some funds for general operating
expenses, the builder breached this fiduciary relationship, warranting
exception from discharge of the debts owed to unpaid
subcontractors. |
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March 15,
2001
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Case
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Court
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Holding
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In
re Westpointe, L.P.
(DBN Subscription Required) |
8th Cir. |
The
bankruptcy court did not err in accepting the non-debtor plan
proponent's expert's valuation (based on the income capitalization
method of valuation) as a basis for finding that the debtor was
insolvent, and the plan could thus cram down and cancel equity
interests. |
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March 14,
2001
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Case
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Court
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Holding
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In
re Iannochino
(DBN Subscription Required) |
1st Cir. |
The
bankruptcy court's prior fee award to debtors' counsel was res judicata
as to debtors' subsequent legal malpractice claim against the same
counsel. |
In
re Wagner
(Adobe Acrobat required to view) |
8th Cir. BAP |
Chapter
13 debtors satisfied their burden of proof regarding the feasibility of
their plan, which provided for a three-year balloon payment to a secured
creditor, by presenting unrebutted testimony that the debtor's father
would help with the balloon payment, although he was not contractually
bound to do so. |
In
re Andersen
(Adobe Acrobat required to view) |
8th Cir. BAP |
Although
the statute requires an individualized examination of annuity purchases
to insure that putative annuities are retirement-oriented, an annuity
purchased by a debtor (whose employer did not provide a retirement plan)
seven years before bankruptcy with inherited funds was exempt under 11
USC 522(d)(10)(e). |
March 13,
2001
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Case
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Court
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Holding
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In
re Grimland
(DBN Subscription Required) |
5th Cir. |
Although
negative noticing (i.e., treating a motion as unopposed if opposition is
not filed within a specified period) serves an important function in
bankruptcy case administration, the bankruptcy court abused its
discretion in declining to adjudicate a secured creditor's opposition to
a surcharge motion filed one-day outside the negative noticing
period. There was no urgency to the relief requested in the
ambiguous motion, and allowing the late-filed objection would not have
materially delayed the case. Moreover, the bankruptcy court itself
noted that the motion sought relief contrary to Circuit precedent. |
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