New Cases For the Week of October 4, 2004 - October 8, 2004

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October 7 , 2004

Case

Court

Holding

In re Coram Healthcare, Inc.
(DBN Subscription Required)
Bankr. De. A plan proposed by the Ch. 11 trustee met the standards for third party releases and settlement of disputed claims.
In re Net 2000 Communications, Inc.
(DBN Subscription Required)
Bankr. De. Where debtor's counsel had failed to counsel the debtor to reject executory contracts sooner, its fees would be decreased to eliminate compensation for work related to such rejection issues. Where a Court-approved APA excluded certain assets from a sale, the fees of debtor's counsel incurred in litigating whether those assets had been sold would be denied.
In re Wallace & Gale Company
(DBN Subscription Required)
4th Cir.

In an asbestos bankrutpcy, there is no federal interest which warrants applying federal law rather than State law with respect to the interpretation of insurance coverage questions.

Application of a pro rata allocation rule does not violate insurance policy provisions that state that the bankruptcy of an insured will not relieve an insurer of liability. "Equity and fairness" to injured claimants is not a justification for abandonment of a pro rata allocation rule. It is neither equitable nor fair to require an insurance company to pay for coverage during a period for which no effective coverage is in force.

     

October 6 , 2004

Case

Court

Holding

In re Airspect Air, Inc.
(DBN Subscription Required)
6th Cir.

Section 328 applies when the bankruptcy court approves a particular rate or means of payment, and § 330 applies when the court does not do so.

The standards of the Ninth and the Third Circuits for determining whether § 328 pre-approval has occurred are too constrictive. Nowhere does the Bankruptcy Code mandate that the application specifically mention § 328 or that the court's approval order expressly and unambiguously state specific terms and conditions. However, under the Code, approval of compensation for "actual, necessary services rendered" under § 330, rather than pre-approval under § 328, forms the default rule. whether a court "pre-approves" a fee arrangement under § 328 should be judged by the totality of the circumstances, looking at both the application and the bankruptcy court's order. Factors in the determination may include whether the debtor's motion for appointment specifically requested fee pre-approval, whether the court's order assessed the reasonableness of the fee, and whether either the order or the motion expressly invoked § 328.

     

October 4 , 2004

Case

Court

Holding

Eubanks v. CBSK Financial Group, Inc.
(DBN Subscription Required)
6th Cir. Where a debtor has, in good faith,omitted a cause of action asset from his schedules through mistake, inadvertence or lack of knowledge, judicial estoppel should not be applied to bar the cause of action.
Pension Benefit Guaranty Corporation v. Republic Technologies International
(DBN Subscription Required)
6th Cir. The district court erred in failing to give deference to PBGC's determination that it faced an unreasonable increase in benefits if it did not terminate the debtor's pension plans.
     
     

 

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