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New Cases For the Week of April 30, 2001 - May
4, 2001
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May 4, 2001
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Case
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Court
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Holding
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In
re Morehead
(DBN Subscription Required) |
6th Cir. |
The
bankruptcy court erred in holding that payment of a debtor's
wages earned during the 90-day period to a creditor pursuant
to a garnishment wage lien perfected outside the 90-day period
was not a preference. Although perfection of a lien
outside the preference period usually insulates the grant of
the lien from preference attack, 11 USC 547(e)(3) states that
a transfer does not occur until the debtor has acquired rights
in the subject property. Since the debtor did not
acquire rights in her wages until the services were performed
(during the preference period), the bankruptcy court erred in
finding that the attachment of the lien to such wages was not
preferential. |
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May 2, 2001
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Case
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Court
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Holding
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| Rhone-Poulenc
v. IRS |
3rd Cir. |
An
appeal of an action initially filed by a debtor does
not violate the automatic stay, which only applies to the
continuation of actions filed against a debtor |
| Cinicola
v. Scharffenberger |
3rd Cir. |
An
assumption and assignment under 11 USC 365 effected as part of
a sale under 11 USC 363 is covered by the mootness protection
of 363(m), unless the assumption/assignment could be reversed
on appeal without materially impacting the sale
transaction. |
| Bachman
v. Commercial Financial Services |
10th
Cir. |
To
qualify for administrative priority, a claim must arise out of
a transaction between the creditor and the bankrupt's trustee
or debtor in possession and priority exists only to the extent
that the consideration supporting the claimant's right to
payment was both supplied to and beneficial to the debtor-
in-possession in the operation of the business. A debt is not
entitled to priority simply because the right to payment
arises after the debtor in possession has begun managing the
estate.
The bankruptcy court did not err in finding
that employees' severance bonus rights (arising under a
prepetition employment contract rejected by the debtor) did
not qualify as administrative expense claims, even though the
debtor continued to employ the employees for a brief period
postpetition. |
| US
v. Magill |
4th Cir. |
A
debtor under investigation for bankruptcy fraud who asks one
of his creditors to sign an affidavit stating that money
she delivered to him was a gift rather than a loan was
properly convicted of obstruction of justice. |
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