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New Cases For the Week of June 18, 2001 - June
22, 2001
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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June 22, 2001
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Case
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Court
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Holding
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In
re McAlpin
(DBN Subscription Required) |
8th Cir.
BAP |
The
holder of a student loan claim against the debtor was not
precluded from collecting the "collection cost"
component of the debt despite a previous bankruptcy court
order disallowing such claim. Although a bankruptcy
court in a prior completed Chapter 13 bankruptcy had issued an
order disallowing the "collection cost" component of
a student loan debt, the order was entered after completion of
the plan and discharge at a time when the outcome could have
no conceivable impact on the estate. Because of the
absence of an impact on the estate, the court in the prior
bankruptcy lacked subject matter jurisdiction to issue the
order. |
Haboco
of America v. Hill
(DBN Subscription Required) |
Florida
Supreme Court |
Article
X, Section 4 of the Florida Constitution exempts a Florida
homestead, where the debtor acquires the homestead using
non-exempt funds with the specific intent of hindering,
delaying, or defrauding creditors in violation of Fla. Stat.
§ 726.105 or Fla. Stat. § § 222.29 and 222.30 |
In
re Redding
(DBN Subscription Required) |
8th Cir.
BAP |
The
sanction (disgorgement of all but $1,000 of $11,000 in fees
paid) imposed by the bankruptcy court for a debtor's
attorney's failure to comply with the disclosure requirements
11 USC 329 and Fed. R. Bankr. P 2016 was not an abuse of
discretion. Although the attorney honestly believed that
the fees were being paid by the debtors' children, he was an
experienced bankruptcy attorney who had admittedly violated
the statute and offered only "grudging" compliance
when confronted with the violation. |
In
re Zenith Electronics
(DBN Subscription Required) |
3rd Cir. |
Five
balancing factors inform a court's decision regarding the
equitable mootness of a confirmed plan: (1) whether the
reorganization plan has been substantially consummated,(2)
whether a stay has been obtained,
(3) whether the relief requested would affect the rights of
the parties not before the court,(4) whether the relief
requested would affect the success of the plan, and (5) the
public policy of affording finality to bankruptcy judgments.
The factors are given varying weight, depending on the
particular circumstances, but the foremost consideration is
whether the reorganization plan has been substantially
consummated.
The court did not err in dismissing an
appeal of the plan confirmation order as equitably moot.
Although the plan was not as "complicated" as some
other plans, and some aspects of the plan could be easily
reversed without interfering with intervening third party
rights, the plan also dealt with publicly traded bond debt,
which may have been sold to bona fide third parties several
times since confirmation. Because of this, the
difficulty or impossibility of equitably unwinding the plan
was considerable, warranting a finding of equitable mootness. |
U.S.
v. Love
(DBN Subscription Required) |
10th
Cir. |
An
individual who was present at a meeting where the disposition
of a refund was discussed and where the possibility that the
planned disposition might be bankruptcy fraud was raised, was
properly convicted of conspiracy to commit bankruptcy fraud. |
In
re Felt
(DBN Subscription Required) |
5th Cir. |
Willful
neglect of fiduciary duty is essentially a recklessness
standard. Thus, willfulness is measured objectively by
reference to what a reasonable person in the debtor's position
knew or reasonably should have known. |
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June 21, 2001
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Case
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Court
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Holding
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U.S.
v. Lowell
(DBN Subscription Required) |
7th Cir. |
When,
in a bankruptcy crime prosecution founded on concealment of
assets and transactions, the government proves that the
bankruptcy trustee was required to devote extra time and
effort to uncovering the fraud, the trustee is a
"victim" of the crime warranting an enhanced
restitution sentence to compensate the trustee for lost
compensation and effort. |
In
re Bond
(DBN Subscription Required) |
7th Cir. |
Nothing
in the Bankruptcy Code or Rules requires a fee application to
be "verified." An attorney's signature on a pleading
is per se a certification as to its correctness under Rule
9011, and no further "verification" is required.
An attorney may not bill non-legal services
such as typing at her attorney rate.
The bankruptcy judges of the Central
District of Illinois are directed to fully implement the
Court's directives in its Kindhart opinions (requiring
uniform inter-division presumptive fee amounts for Chapter 13
cases and periodic review of such amount) |
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June 20, 2001
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Case
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Court
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Holding
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In
re First T.D. & Investment
(DBN Subscription Required) |
9th Cir. |
Although
the UCC generally requires physical possession of a note and
deed of trust to perfect a security interest in such assets,
Cal. Co, Code 10233.2 creates an exception to this rule when
the subject assets are serviced by a real estate broker.
Accordingly, the bankruptcy court erred in holding that
secured creditors' liens in the bankruptcy estate's interest
in numerous notes and deeds of trust could be avoided, since
the assets fell within the exception created by section
10233.2 |
In
re Sheehan
(DBN Subscription Required) |
9th Cir. |
When
the plaintiff failed to serve the debtor/defendant with
process within 120 days in a nondischargeability action, the
bankruptcy court erred in failing to apply the excusable
neglect standard to determine whether to enlarge the period
for service. |
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June 19, 2001
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Case
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Court
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Holding
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In
re Calendar
(DBN Subscription Required) |
8th Cir
BAP |
Confirmation
of a Chapter 13 plan which treats a junior lien on a residence
as wholly unsecured may bar later relitigation of the amount
of the creditor's secured claim via a claim objection or
valuation proceeding.
The bankruptcy court erred in granting full Nobleman
treatment (i.e., an entitlement to full payment of a
thinly-secured junior lien) to a putative second-priority lien
before determining the priority and extent of
another junior lien that was allegedly superior in
priority. |
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June 18, 2001
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Case
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Court
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Holding
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In
re Montgomery
(DBN Subscription Required) |
8th Cir.
BAP |
At
hearings on relief from the stay, the only issue is the lack
of adequate protection, the debtor's equity in the property,
and the necessity of the property to an effective
reorganization of the debtor, or the existence of other cause
for relief from the stay. The hearing is not the appropriate
time at which to bring in other issues, such as counterclaims
against the creditor, which, although relevant to the question
of the amount of the debt concern largely collateral or
unrelated matters.
The bankruptcy court did not err in refusing
permission to the debtor to present evidence in a relief from
stay hearing relevant to whether a creditor's eve of
bankruptcy foreclosure was a fraudulent transfer. |
In
re Grandote Country Club Company
(DBN Subscription Required) |
10th
Cir. |
Although
11 USC 304 and principles of comity favor application of a
foreign country's laws in an ancillary proceeding, the
bankruptcy court did not err in applying Colorado law in an
ancillary proceeding filed by a Japanese bankruptcy trustee
where the issues related to ownership of Colorado real
property. |
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