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New Cases For the Week of March 15, 2004 -
March 19, 2004
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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March
19, 2004
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Case
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Court
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Holding
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In
re Sunterra Corp.
(DBN Subscription Required) |
4th
Cir. |
The
bankruptcy court erred in
holding that the debtor was
entitled to assume a
nonexclusive license of
copyrighted software. |
In
re Graphics Technology
(DBN Subscription Required) |
8th
Cir. BAP |
To
reclaim money or property from
a bankruptcy estate on the
basis that the property
belongs to the reclaiming
party and not to the debtor,
the reclaiming party must be
able to definitively trace its
property. Tracing is possible
using the lowest intermediate
balance test.
Where
the debtor's bank swept its
account daily, tracing cannot
be accomplished using the
lowest intermediate balance
test. |
In
re George
(DBN Subscription Required) |
9th
Cir. |
Claim
by California Uninsured
Employers Fund against
employer who failed to
purchase workers' compensation
insurance was not "excise
tax" for purposes of
bankruptcy law. |
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March
18, 2004
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Case
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Court
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Holding
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In
re Ruehle
(DBN Subscription Required) |
6th
Cir. BAP |
The
bankruptcy court did not err
in vacating the debtor's
student loan discharge
pursuant to Fed. R. Civ. P.
60(b)(4) on the grounds that
her educational loan creditor
was denied due process of law
by the Debtor's discharge of
her student loan through her
plan rather than by filing a
separate adversary proceeding. |
In
re Allied Digital Technologies
Corp.
(DBN Subscription Required) |
Bankr.
DE |
The
issue of whether a D&O
policy and its proceeds are
property of the estate is
controlled by the language and
scope of the policy and is a
fact-driven inquiry. The
outcome usually turns on who
is the named insured under the
policy. Generally, when
D&O policies provide
direct coverage to officers
and directors, the proceeds of
the policy are not property of
the bankruptcy estate. Where a
D&O policy provides direct
coverage to the debtor as well
as direct coverage to officers
and directors, the proceeds of
the policy are property of the
estate, since the debtor's
interest in the proceeds
requires protection and
overrides the officers' and
directors' interest.
Courts are split on whether
policy proceeds are property
of the estate when the policy
provides direct coverage to
officers and directors and
coverage to the debtor for its
obligation to indemnify
officers and directors.
When
a policy provides direct
coverage to the officers and
directors and
"indemnification
coverage" to the debtor,
the policy proceeds are not
property of the estate where
indemnification has not
occurred or is hypothetical or
speculative. |
In
re Meyer
(DBN Subscription Required) |
Bankr.
N.D. Ill. |
A
debtor who followed his estate
planner's advice with respect
to prepetition transfers to a
family member lacked the
fraudulent intent required for
denial of his discharge.
Although expert opinion
indicated that the transfers
lacked estate planning
benefits, the debtor's intent
was to accomplish estate
planning thus negating
fraudulent intent. |
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March
17, 2004
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Case
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Court
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Holding
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In
re Lang
(DBN Subscription Required) |
10th
Cir. BAP |
The
press of other business does
not constitute excusable
neglect warranting retroactive
extension of the 10-day period
within which a notice of
appeal can be filed. |
In
re Michels
(DBN Subscription Required) |
8th
Cir. BAP |
Where
the debtor had been in
bankruptcy for over two years
and had been unable to confirm
a plan it was not an abuse of
discretion for the bankruptcy
court to dismiss the debtor's
case following denial of
confirmation of the debtor's
latest plan. |
In
re Haase
(DBN Subscription Required) |
1st
Cir. BAP |
Because
a State court has authority to
retroactively modify its prior
order denying spousal support,
the bankruptcy court did not
err in approving a compromise
between a debtor and his
ex-spouse in which the debtor
agreed to pay the ex-spouse
$20,000 in spousal support as
a priority claim. |
In
re Anderson
(DBN Subscription Required) |
8th
Cir. BAP |
A
Chapter 12 debtors cannot use
the plan confirmation process
to avoid a secured creditor's
lien through language in the
plan. Unless a debtor
properly avoids a deemed
allowed secured claim, the
bankruptcy court does not err
in denying confirmation of a
plan that does not provide the
the secured creditor to retain
its lien and be paid the
present value of its
collateral. |
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March
16, 2004
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Case
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Court
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Holding
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In
re Deville
(DBN Subscription Required) |
9th
Cir. |
Rule
9011 sanctions ordered sua
sponte by the Court as a
penalty do not require the
procedural steps required for
criminal contempt sanctions.
The
existence of Rule 9011 is not
inconsistent with a Court's
inherent power to impose
sanctions. |
In
re Bankvest Capital Corp.
(DBN Subscription Required) |
1st
Cir. |
11
U.S.C. § 365(b)(2)(D) permits
a debtor-in-possession to
assume an unexpired lease
without first curing
non-monetary defaults. |
In
re UAL Corp.
(DBN Subscription Required) |
Bankr.
N.D. Ill. |
Appointment
of an examiner is mandatory
when:
•
the debtor is still be in
possession of the estate—a
trustee must not have been
appointed;
• a plan has not have been
confirmed;
• a party in interest has
requested the
appointment;
• one of the conditions set
out in the numbered paragraphs
of section 1104(c) has been be
satisfied—either (1)
appointment of the examiner
must be in the interests of
the estate, or (2) specified
unsecured debts must exceed $5
million.
The
court however, retains the
discretion to determine the
nature and scope of the
examiner’s
investigation. The fact
that appointment of an
examiner may be mandatory does
not mean that the scope of
inquiry suggested by the
movant is, per se,
appropriate. |
In
re Bolin
(DBN Subscription Required) |
Bankr.
C.D. Ill. |
Where
Ch. 7 special counsel hired to
represent both trustee an
debtors in medical malpractice
action, special counsel's
excuse that he "forgot
the trustee was his
client" was no
justification for special
counsel's payment of his fees
without court approval and
disbursement of settlement
proceeds to debtors without
court approval. |
In
re American Pad & Paper
Co.
(DBN Subscription Required) |
Bankr.
DE |
Where
a permanent trustee is elected
more than two years after the
order for relief, the statute
of limitations for preference
actions is not extended for an
additional one year. |
In
re Cable & Wireless USA,
Inc.
(DBN Subscription Required) |
Bankr.
DE |
Although
of contract rights a sale free
and clear generally strips
away setoff rights, but not
recoupment rights, recoupment
is an equitable concept, and
where inflexible preservation
of recoupment rights would
harm an innocent part or be
unfair, the equities of the
situation may require the
Court to craft appropriate
relief. |
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March
15, 2004
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Case
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Court
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Holding
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In
re Gardner
(DBN Subscription Required) |
6th
Cir. |
The
bankruptcy court did not err
in finding that a debtor's tax
liabilities were
nondischargeable under 11 USC
523(a)(1)(C) where the
debtor/attorney: (i) led a
lavish lifestyle, (ii) used
nominee bank accounts and
(iii) had the ability to pay
the taxes. |
In
re MBC Greenhouse Co.
(DBN Subscription Required) |
Bankr.
DE |
A
bankruptcy trustee cannot
amend a preference complaint
after limitations have run to
add new preference causes of
action. Each transfer is
a separate preference, and a
transfer not pled prior to
limitations running cannot be
added through amendment on a
relation back theory. |
In
re Webvan Group, Inc.
(DBN Subscription Required) |
Bankr.
DE |
The
Fed. R. Bankr. P. do not
require a heightened pleading
standard for avoidable
transfer claims. |
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