New Cases For the Week of January 27, 2003 - January 31, 2003

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January 30, 2002

Case

Court

Holding

In re Response USA, Inc. D. N.J. Creditors who received stock of the debtor as part of the consideration in a prepetition sale of their business to the debtor could not avoid the effect of section 510(b) by asserting that their claim against the debtor was not based on "damages" from a sale of the debtor's securities, but instead was based on a contractual provision requiring  the debtor to pay cash to the claimants if the stock declined in value.  

January 29, 2002

Case

Court

Holding

In re Emery
(DBN Subscription Required)
9th Cir. The bankruptcy court did not err in finding that a mortgage which assigned all of a debtor's causes of action to a lender to secure all amounts owed by a debtor did not require the debtor's attorney to disburse to the lender the net proceeds of a lawsuit.  The term "owed to lender" meant amounts then due to lender.  Since, at the time the litigation proceeds were distributed, the loan had not been accelerated, and the debt was not in default, there was nothing "owed to lender."

January 27, 2002

Case

Court

Holding

Federal Communications Commission v. Nextwave Personal Communications Inc.
(DBN Subscription Required)
Sup. Crt. The FCC had no authority to effect an administrative forfeiture of a debtor's telecommunications licenses due to the debtor's payment default. Section 525 prohibits forfeiture of a government license due to failure to pay a dischargeable debt.
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