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New Cases For the Week of September 10, 2001 -
September 14, 2001
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September 14, 2001
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Case
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Court
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Holding
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Cert.
petition filed Northwest Village
LP v. Franke
8th
Cir. opinion
(DBN Subscription Required)
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Sup. Ct. |
Should
"reorganization value" be calculated based on fair
market value of estate assets to generic outsiders or based on
value of reorganized estate to actual reorganizer? |
In
re Smith's Home Furnishings
(Adobe Acrobat Reader plug-in required) |
9th Cir. |
In
a preference case, the Court refuses to accept the add-back
method of proving that a floating lien/line of credit creditor
received a greater amount through prepetition payments than it
would have had the payments not been made and the debtor
liquidated. The "add-back" method of proving
the greater amount element of a preference is based on adding
the 90-day payments to the petition date value of the
collateral and establishing proof of greater amount if the sum
exceeds the amount of the creditor's claim (thereby
potentially rendering the creditor undersecured).
Although payments that change the status of a creditor from
undersecured to oversecured can be preferential and transfers
can be avoided when a creditor is oversecured at the time of
transfer but undersecured on the petition date, the add-back
method is not sufficient from an evidentiary standpoint to
establish these facts when the creditor holds a floating lien.
Moreover, when a creditor holds a floating
lien, in order to satisfy his burden of proof under 11 USC
547(b)(5), the trustee and not the creditor has the burden of
tracing commingled funds used to make payments to the creditor
in order to prove that the funds came from other parties'
collateral and the creditor was undersecured. |
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September 11, 2001
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Case
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Court
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Holding
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In
re Periandri
(DBN Subscription Required) |
6th Cir
BAP |
Under
the applicable State lis pendens law, a secured creditor's
pending prepetition foreclosure sale prevented a bankruptcy
trustee from exercising strong arm powers, since the action
provided constructive notice to the world of the secured
creditor's interest. |
In
re General Warehousemen and Helpers Union
(DBN Subscription Required) |
9th Cir. |
A
nonprofit national labor union's relationship with a nonprofit
local labor union is not an "equity interest"
requiring application of the new value exception. |
In
re Fields
(DBN Subscription Required) |
8th Cir.
BAP |
An
appeal of a relief form stay order permitting foreclosure is
moot and must be dismissed where no stay pending appeal is
obtained and the foreclosure occurs before adjudication
of the appeal. |
In
re Barnes
(DBN Subscription Required) |
8th Cir.
BAP |
A
creditor was unable to prove that the debtor was legally
intoxicated at the time of the events giving rise to the
claim, thereby precluding nondischargeability of the debt. |
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September 10, 2001
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Case
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Court
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Holding
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In
re Cukierman
(DBN Subscription Required) |
9th Cir. |
An
obligation in a lease which is designated as "further
rent" is elevated to administrative priority under 11 uSC
365(d)(3), even though the obligation is actually payment of a
promissory note. |
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