New Cases For the Week of
March 19, 2001 - March 23, 2001
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March 22,
2001
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Case
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Court
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Holding
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In
re Vitanovich
(DBN Subscription Required) |
6th Cir. BAP |
Debts
falling within the scope of 11 USC 523(a)(2)(A) are not limited to debts
incurred through the use of fraudulent misrepresentations. The
statute encompasses all debts incurred through "actual fraud,"
which is broader than fraud debts arising from the use of factual
misrepresentations. "Actual fraud" encompasses any deceit,
artifice, trick, or design involving direct and active operation of the
mind, used to circumvent and cheat another. |
Cummings
v. Cummings
(DBN Subscription Required) |
11th Cir. |
Although
federal law controls, state law does provide guidance in determining
whether the obligation should be considered `support' under §
523(a)(5)." Id. To make this determination a bankruptcy court
should undertake "a simple inquiry as to whether the obligation can
legitimately be characterized as support, that is, whether it is in the
nature of support. However, a court cannot rely solely on the label used
by the parties, since it is likely that neither the parties nor the
divorce court contemplated the effect of a subsequent bankruptcy when
the obligation arose. Although the various factual factors
considered by bankruptcy courts are relevant to the inquiry, the
touchstone for dischargeability under § 523(a)(5) is the subjective
intent of the parties.
Since the divorce court in the debtor's prepetition
divorce had indicated several times on the record that permanent alimony
was denied on the basis that the debtor's wife could rely for support on
a lump sum equitable distribution ordered by the divorce court, the
bankruptcy court may have erred in finding that the equitable
distribution obligation ($6.3 million dollars, payable in three
installments) was not support, and thus was dischargeable. |
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March 21,
2001
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Case
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Court
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Holding
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In
re Taylor
(DBN Subscription Required) |
2d Cir. |
The
bankruptcy court may have erred in holding that a Chapter 13 debtor's
pension plan contributions was not a reasonably necessary expense. A
Chapter 13 debtor's monthly contribution to a pension plan may be a
reasonably necessary expense (and thus excluded from disposable income)
under certain circumstances. The Court must evaluate such
contributions on a case-by-case basis considering all factors, including
: the age of the debtor and the amount of time until expected
retirement; the amount of the monthly contributions and the total amount
of pension contributions debtor will have to buy back if the payments
are discontinued; the likelihood that buy-back payments will jeopardize
the debtor's fresh start; the number and nature of the debtor's
dependants; evidence that the debtor will suffer adverse employment
conditions if the contributions are ceased; the debtor's yearly income;
the debtor's overall budget; who moved for an order to discontinue
payments; and any other constraints on the debtor that make it likely
that the pension contributions are reasonably necessary expenses for
that debtor. |
In
re Burks
(DBN Subscription Required) |
11th Cir. |
A
debtor/graduate student, who received a $10,000/year stipend conditioned
on his agreement to teach after graduation at an "other-race
university," was precluded from discharging his obligation to repay
the stipend if he failed to fulfill his teaching responsibility.
The debtor contended unsuccessfully that the stipend was not an
"educational benefit" within the meaning of 11 USC 523(a)(8),
but was instead an effort to address racial inequity. |
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March 20,
2001
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Case
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Court
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Holding
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In
re Popkin & Stern
(DBN Subscription Required) |
8th Cir. BAP |
A
co-owner's claim for allocation of the proceeds of an asset garnished by
the bankruptcy trustee of the debtor in connection with judgments issued
by the bankruptcy court was not barred by the Rooker Feldman doctrine,
since the relief sought by the co-owner would not have collaterally
attacked the relief the trustee sought in the garnishment proceeding. |
In
re Gaston & Snow
(DBN Subscription Required) |
2d Cir. |
Because
federal choice of law rules are a type of federal common law, which
federal courts have only a narrow power to create, bankruptcy courts
confronting state law claims that do not implicate federal policy
concerns should apply the choice of law rules of the forum state. |
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March 19,
2001
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Case
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Court
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Holding
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In
re Booth
(DBN Subscription Required) |
6th Cir. BAP |
A
debtor's right to a profit-sharing payment from his employer was
sufficiently rooted in the debtor's prepetition past as to become
property of his bankruptcy estate even though the right was contingent
and unenforceable on the petition date, since the employer had not yet
calculated profits. |
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