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New Cases For the Week of December 13, 2004 -
December 20, 2004
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Click here to search prior New Opinion summaries.
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December 23, 2004 |
Case |
Court |
Holding |
In re Regal Cinemas, Inc.
(DBN Subscription Required) |
6th Cir. |
Where a landlord's claim is capped under section 502(b)(6), and the lease is guaranteed by a third party, the guarantor's reimbursement claim against the debtor for the full, uncapped amount of the lease damages should be disallowed when the debtor has already paid the landlord the amount of the 502(b)(6) claim. |
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December 22, 2004 |
Case |
Court |
Holding |
In re Coho Energy Inc.
(DBN Subscription Required) |
5th Cir. |
Bankruptcy courts are not authorized by Article III of the Constitution, and as such are not presumptively bound by traditional rules of judicial standing. Although Congress did not include the prior "person aggrieved" provision when the Bankruptcy Code was revamped in 1978, courts subsequently have found that this test continues to govern standing on appeal in bankruptcy cases. The "person aggrieved" test is an even more exacting standard than traditional constitutional standing.
A law firm competing for a contingency share of settlement proceeds did not have appellate standing to contest a settlement between the debtor and a second law firm regarding those settlement proceeds. The first law firm's standing theory was that the settlement might result in exhaustion of the subject funds. Because there would be over a million dollars of settlement proceeds as a cushion, the first law firm's fears of exhaustion were too remote and speculative to make the law firm a "person aggrieved."
If after an arbitration panel determined the appropriate quantum meruit amount payable to the debtor's law firm payable which was fired for cause during the bankruptcy, the bankruptcy court retained the authority to reduce such arbitrated figure under 11 USC 328(a) on account of intervening unanticipated developments. The bankruptcy court did not err in reducing the arbitration amount on the basis of its inability to anticipate: (i) the arbitration finding that the firm was fired for cause, (ii) the number of hours that the firm had incurred when it was fired and (iii) the quantum meruit amount found by the arbitration panel. |
In re Stembridge
(DBN Subscription Required) |
5th Cir. |
The bankruptcy court erred in its valuation of collateral for confirmation of a cram down plan when it used the foreclosure value of the collateral on the petition date. The Supreme Court's Rash decision requires use of replacement value in this context.
The Supreme Court's decision in Rash does not address the appropriate "as of" date on which collateral should be valued for plan confirmation. The appropriate date is the petition date, not the effective date of the plan. In order to confirm a plan, the value of the collateral should be determined as of the filing of the petition, and the plan should provide the replacement value less any adequate protection payments already paid. |
In re Tennant
(DBN Subscription Required) |
9th Cir. BAP |
The BAP has "serious doubts" whether a local rule providing for an automatic bar on refiling for 180 days after dismissal for failure to file schedules is enforceable in the absence of a motion, hearing and finding of willful failure. |
In re George
(DBN Subscription Required) |
9th Cir. BAP |
The General Rule of Bar and the General Rule Concerning Splitting, as stated in Restatement (Second) of Judgments §§ 19 and 24, combine to warrant imposition of claim preclusion |
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December 21, 2004 |
Case |
Court |
Holding |
Specker Motor Sales Co. v. Eisen
(DBN Subscription Required) |
6th Cir. |
Disgorgement of previously-allowed interim compensation is mandatory when necessary to effectuate a pro rata distribution of the estate's assets among administrative claims in an administratively insolvent case. |
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December 20, 2004 |
Case |
Court |
Holding |
In re Dove-Nation
(DBN Subscription Required) |
8th Cir. BAP |
The bankruptcy court did not err in denying objections to proofs of claims filed by an assignee of consumer debt. Although the proof of claim did not have attached duplicates of the original documents establishing the claim, the claim substantially complied with Rule 3001(c). To the extent that the Rule requires more than the statute (section 502), the statute governs. |
In re Gupta
(DBN Subscription Required) |
5th Cir. |
Texas law, as amended in 1994, recognizes only limited areas of responsibility in which partners owe a fiduciary duty to each other. In a nondischargeability proceeding under 11 USC 523(a)(4), the bankruptcy court erred in according collateral estoppel effect to State court findings of a relationship involving confidence, trust and good faith. That standard is far too broad of a standard for 11 USC 523(a)(4) purposes. |
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