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New Cases For the Week of October 27,
2003 - October 31, 2003
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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October
30, 2003
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Case
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Court
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Holding
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In
re Harbaugh
(DBN Subscription Required) |
8th
Cir. BAP |
A
faxed document did not constitute a proper
way to commence a dischargeability action
within the 523(c) period. Federal
Rule of Bankruptcy Procedure 5005(a)(2)
authorizes local courts to permit
electronic filing. However, the rule does
not require courts to do so. If a court
does not have a local rule authorizing fax
filings, fax filings are not permitted.
"Absent a local rule authorizing the
practice, facsimile filings in a federal
court are dead on arrival."
The Court
lacked discretion to enlarge the 523(c)
period after it had lapsed. |
Reliant
Energy Services, Inc. v. Enron Canada Corp
(DBN Subscription Required) |
5th
Cir. |
On
remand, if the district court finds that
an ambiguous master netting
agreement makes a non-debtor subsidiary
jointly liable for the debts of a debtor,
it should revisit the issue of whether the
automatic stay applies to the non-debtor
subsidiary under the A.H. Robbins
exception. |
Kennedy
v. Venrock Associates
(DBN Subscription Required) |
7th
Cir. |
The
question whether a suit is derivative by
nature or may be brought by a shareholder
in his own right is governed by the law of
the state of incorporation. A suit framed
as a minority shareholder suit will be an
asset of the bankrupt corporation if it
alleges that the value of the corporation
was diminished and will be a direct suit
if it alleges that majority shareholders
acted to misappropriate the value of
minority shares for the benefit of
majority shares.
A claim
by shareholders against directors alleging
that the directors issued a misleading
proxy statement that allowed the
corporation to be reincorporated in
Delaware (which event decreased the
protection afforded to shareholders) was a
direct claim rather than a derivative
claim, since the effect of the
reincorporation was to reduce the
shareholders' power over the corporation's
affairs rather than to reduce the value of
the corporation. |
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October
29, 2003
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Case
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Court
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Holding
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Barger
v. City of Cartersville, Ga.
(DBN Subscription Required) |
11th
Cir. |
The
failure to comply with the Bankruptcy
Code's disclosure duty is
"inadvertent" only when a party
either lacks knowledge of the undisclosed
claim or has no motive for their
concealment.
A debtor
who failed to disclose the existence of
her employment discrimination lawsuit
during the pendency of her
bankruptcy |
In
re Rozier
(DBN Subscription Required) |
11th
Cir. |
The
11th Circuit certifies the following
question to the Georgia Supreme Court:
Whether, under Georgia law, legal
ownership passes to a creditor at the time
of repossession? |
In
re Cassady
(DBN Subscription Required) |
Bankr.
C.D. Ill. |
"While
the sewer smell may have been camouflaged
by the smell of cat urine, the dish and
laundry water backing up into the tub and
soap bubbles in the yard are simply
problems that are too big for the
Defendants to have been unaware of
them." The debtors' failure to
disclose defects in mobile home resulted
in nondischargeable debt. |
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October
27, 2003
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Case
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Court
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Holding
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In
re Erlewine
(DBN Subscription Required) |
5th
Cir. |
An
adjudication of claims is a
"transfer" os such claims for
avoidance purposes.
The
bankruptcy court did not err in refusing
to find that a wife who received a
disproportionate share of community assets
in a contested prepetition divorce did not
give reasonably equivalent value in
exchange for the assets. The divorce
court made factual findings regarding the
husband's behavior in support of the
disproportionate distribution.
Although the reasonable equivalence test
is naturally somewhat more difficult to
apply in the context of a judicial
"transfer" than it is with
respect to more paradigmatic transfers,
such as voluntary sales, it is important
that federal statutes impinging upon
important state interests not be construed
without regard to the implications of our
dual system of government. To allow
the bankruptcy trustee to challenge the
economic distribution arising from an
adjudicated, contested divorce would
subject every divorce decree to scrutiny
in the bankruptcy court, so long as the
divorce court divided the community
property unequally. |
In
re ALTA+CAST, LLC
(DBN Subscription Required) |
Bankr.
DE |
A
provision in an employment contract
requiring the debtor to repurchase an
employee's equity interest if the employee
was terminated for cause was a contract to
repurchase equity as opposed to damages
under an employment contract, and was thus
subject to subordination under 11 USC 510. |
In
re Jones
(DBN Subscription Required) |
1st
Cir. BAP |
A
debt for sexual harassment is
nondischargeable. |
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