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New Cases For the Week of February 2, 2003 -
February 6, 2004
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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February
6, 2004
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Case
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Court
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Holding
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Educational
Credit Management Corp. v.No.
Polleys
(DBN Subscription Required) |
10th
Cir. |
Whether
a debtor's student loans would
impose an "undue
hardship" under 11 U. S.
C. § 523(a)(8) is a question
of law. Because it
requires a conclusion
regarding the legal effect of
the bankruptcy court's
findings as to the debtor's
circumstances, it is reviewed
de novo.
The
10th Circuit joins the
majority of the other circuits
in adopting the Brunner
framework. However, to better
advance the Bankruptcy Code's
"fresh start"
policy, and to provide judges
with the discretion to weigh
all the relevant
considerations, the terms of
the test must be applied such
that debtors who truly cannot
afford to repay their loans
may have their loans
discharged. Additionally, the
good faith portion of the Brunner
test should consider
whether the debtor is acting
in good faith in seeking the
discharge, or whether he is
intentionally creating his
hardship. |
In
re Baucom
(DBN Subscription Required) |
Bankr.
C.D. Ill. |
Although
the practice of charging a Ch.
7 debtor a flat fee for
prepetition work, and then
additional flat fees for
additional postpetition work,
if required, is not per se
objectionable, where that
practice causes undue delay,
expense or confusion, it can
be the basis for sanctions. |
In
re American Pad & Paper
Company
(DBN Subscription Required) |
Bankr.
DE |
Where
an interim trustee was
appointed in a converted case
within two years of the order
for relief, and his
appointment was followed by
the election of a Ch. 7
trustee whose appointment
occurred more than two years
after the order for relief,
the limitations period for
avoidance actions was two
years from the date of the
order for relief. The
additional one year period
available under 11 USC 546 did
not apply unless a permanent
trustee is elected or
appointed prior to the
expiration of two years after
the order for relief.
Accordingly, the numerous
defendants sued in avoidance
actions were entitled to
dismissal of the claims
against them. |
In
re PL Liquidation Corp.
(DBN Subscription Required) |
Bankr.
DE |
In
jointly administered cases, a
joint election of a trustee is
authorized and preferred. |
In
re DVI, Inc.
(DBN Subscription Required) |
Bankr.
DE |
Where
a debtor transfers accounts
receivable assets to an SPE
prepetition, and retains
servicing rights, it cannot
bring a postpetition action in
the Bankruptcy Court for
collection of such accounts
receivable. The accounts
no longer belong to the debtor
and any "related to"
effect on the debtor's
bankruptcy is too speculative
to support the Bankruptcy
Court's jurisdiction |
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February
5, 2004
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Case
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Court
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Holding
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In
re Byers
(DBN Subscription Required) |
1st
Cir. BAP |
Where
a pretrial order appeared to
limit claims to be tied to one
section of State fraudulent
transfer law, but the
complaint and other facts
showed that a cause of action
under a second section of
State fraudulent transfer law
was also at issue and had been
tried, the Bankruptcy Court
erred in failing to consider
amending the pleadings to
conform to the evidence under
Fed. R. Bankr. P. 7015(b). |
In
re Moore v. Panalis
(DBN Subscription Required) |
10th
Cir. |
Where
there was no evidence that a
creditor's disfiguring
injuries were caused by the
debtor's fraudulent
misrepresentations regarding
the scope of his insurance
coverage the creditor's fraud
judgment against the debtor
was dischargeable. |
In
re Premier Farms
(DBN Subscription Required) |
Bankr.
N.D. Iowa |
Law
firm's representation of
secured creditor in matters
unrelated to bankruptcy case
was cause for denial of
debtor's application to employ
law firm as bankruptcy
counsel. Law firm's
billings to secured creditor
amounted to only 3 tenths of
one percent of firm's annual
billings, but firm's long
standing relationship with
creditor, when contrasted with
likely one-time representation
of debtor, created potential
conflict of interest
justifying denial of
employment, particularly where
unsecured creditors
objected. |
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February
3, 2004
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Case
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Court
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Holding
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In
re Watman
(DBN Subscription Required) |
1st
Cir. BAP |
A
majority if courts hold that
when a bankruptcy court issues
a final order that the
district court or bankruptcy
appellate panel reverses and
remands for further proceeding
the finality of the appellate
court's order is determined by
focusing on what remains to be
done by the bankruptcy court
after remand from the district
court.
Although the courts of appeals do have jurisdiction over appeals from interlocutory orders of the district courts in certain situations pursuant to 28 U.S.C. § 1292, that section does not apply in the bankruptcy context to decisions of a bankruptcy appellate panel reviewing a bankruptcy court decision |
In
re Bren
(DBN Subscription Required) |
8th
Cir. BAP |
The
bankruptcy court erred in
finding that the debtors'
omissions from their schedules
were not made
fraudulently. Reckless
indifference can constitute
fraudulent intent. The
debtors' testimony that they
had not read their schedules
(which contained several
errors) rose to the level of
reckless indifference,
justifying denial of the
debtors' discharge. |
In
re Hovis
(DBN Subscription Required) |
7th
Cir. |
Although
a debtor's post-confirmation
challenge to a creditor's
claim in a subsequent lawsuit
can be barred by preclusion,
the same principle does not
operate with respect to
challenges to such a claim
brought within the bankruptcy
case. In the absence of
a statutory or court ordered
bar date, or application of
judicial estoppel, a debtor
can object to a creditor's
claim following
confirmation. |
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February
2, 2004
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Case
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Court
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Holding
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In
re Trantham
(DBN Subscription Required) |
6th
Cir. |
In
assessing the dischargeability
under 11 USC 523(a)(6) of a
patent infringement liability,
the bankruptcy court erred in
failing to apply the second
part of a test for
willfulness: whether the
debtor believed that the
consequences of his act were
substantially certain to
result |
In
re Durante
(DBN Subscription Required) |
Bankr.
S.D. |
Debtor's
motion to reopen her
bankruptcy case to litigate
hardship discharge of student
loan was denied because debtor
did not need to reopen her
case to litigate a hardship
discharge. |
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