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New Cases For the Week of May 17, 2004 -
May 21, 2004
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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May
21, 2004
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Case
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Court
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Holding
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In
re Cueva
(DBN Subscription Required) |
5th
Cir. |
A
foreclosure in violation of
the automatic stay is void
unless retroactive annulment
of the stay is obtained. 11
USC 549(c) (protecting good
faith postpetition purchasers
of estate property) is not an
exception to this rule. |
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May
20, 2004
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Case
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Court
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Holding
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In
re Catt
(DBN Subscription Required) |
7th
Cir. |
A
minority of States, including
Indiana, accord collateral
estoppel effect to facts
established in a proceeding in
which the defendant did not
participate in the
adjudication of liability (a
default judgment). Since the
preclusive effect of a State
court judgment in bankruptcy
court depends upon the effect
given such judgment in the
rendering State, a default
judgment entered in such a
minority State is entitled to
collateral estoppel effect in
nondischargeability
proceedings under 11 USC
523(a). |
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May
19, 2004
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Case
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Court
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Holding
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In
re U.S. Wireless Corp.
(DBN Subscription Required) |
Bankr.
De. |
Where
claims by a Delaware
bankruptcy estate against
former auditors were based
upon California law and upon
events which occurred in
California, transfer of venue
to California was appropriate. |
Corporate
Assets, Inc. v. Paloian
(DBN Subscription Required) |
7th
Cir. |
The
bankruptcy court did not err
in reopening bidding in a
closed auction to accept
higher bids.
Once
a court has confirmed a sale
of a debtor's assets to the
auction's victor, the public
interest in finality is high
and the parties reasonably
expect that the bidding is
over. Only a narrow range of
circumstances will support a
court's decision to vacate the
sale order and reopen the
bidding. The simple fact that
a late bid offers the estate
more money than the bid
previously approved by the
court will not suffice; only
if the belated bid reveals the
initial sale price to be so
grossly inadequate as to shock
the conscience of the court
will reopening be
justified. However, if
the sale has not progressed to
the point where it has been
confirmed by the Court, there
is considerably greater
discretion in reopening
bidding. |
In
re Dawson
(DBN Subscription Required) |
9th
Cir. |
A
debtor may not recover damages
for emotional distress under
11 U.S.C. § 362(h) when a
creditor violates the
automatic stay |
In
re Kmart Corp.
(DBN Subscription Required) |
Bankr.
N.D. Ill. |
Res
judicata does not apply when a
cause of action has been
expressly reserved for later
adjudication. A plan
which preserves avoidance
actions for post-confirmation
adjudication does not preclude
such adjudication. A
specific reservation of claims
is required. A blanket,
general reservation is
ineffective. Where the
debtor's plan effectively
placed avoidance defendants on
notice that they could be
subject to suit, the plan's
confirmation did not preclude
such suits. |
In
re Mirant Corp.
(DBN Subscription Required) |
Bankr.
N.D. Tx. |
Where
applicable rules, prior
industry practice and the
parties agreement did not
support
"liquidation" of a
forward contract through
invasion of a debtor's bank
account, such liquidation was
a violation of the automatic
stay.
Where
gas agreements were terminated
postpetition, further
deliveries of gas could not be
on account of such agreements,
and thus the counterparty was
not entitled to pay for such
gas by "recouping"
under such terminated
agreements. |
In
re Pacific Gas & Electric
Company
(DBN Subscription Required) |
Bankr.
N.D. Cal. |
Because
Enron's amended claims against
PG&E neither relate back
to timely filed claims, nor
are justified on the basis of
excusable neglect, such
amended claims are excluded
from participation in the
estate. |
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May
18, 2004
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Case
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Court
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Holding
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Till
v. SCS Credit Corp.
(DBN Subscription Required) |
S.
Ct. |
The
appropriate method for
calculating a cram down
interest rate is the
"formula approach,"
which starts wth the national
prime rate and adds an
appropriate additional rate to
account for the risk of
default. |
Tennessee
Student Assistance Corp. v.
Hood
(DBN Subscription Required) |
S.
Ct. |
Because
a bankruptcy court's
jurisdiction to issue a
discharge derives exclusively
from its in rem jurisdiction
over the debtor's property and
estate, and does not depend on
in personam jurisdiction over
creditors, adjudication, in an
adversary propceeding, of the
dischargeability of a student
loan owed to a State agency
does not violate the Eleventh
Amendment. |
In
re Kensington International
Limited
(DBN Subscription Required) |
3rd
Cir. |
Where
a district court judge
presiding over
asbestos-related bankruptcies
associated with certain
consulting advisors who, at
the same time that they were
supposed to be giving neutral
advice in the asbestos cases,
represented a class of tort
claimants in another,
unrelated asbestos-driven
bankruptcy and espoused views
therein on the same disputed
issues that are at the core of
the asbestos cases, the
association was grounds for
recusal of the judge on the
grounds that a reasonable
person, knowing all of the
relevant circumstances, would
conclude that the judge's
impartiality might reasonably
be questioned.
The "hypothetical
reasonable person"
referenced in 28 U.S.C. §
455(a) is the average man on
the street, not as found by
the district judge, someone
with the professional skills
and experience in mass-tort
asbestos-related bankruptcies
sufficient to understand the
import of the facts
presented. |
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May
17, 2004
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Case
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Court
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Holding
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In
re Northwestern Corp.
(DBN Subscription Required) |
Bankr.
De. |
Where
there is a wide disparity in
value estimates between the
expert for the unsecured
creditors committee an the
expert for equity interest
holders, appointment of an
equity interest holders
committee is not warranted. |
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