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New Cases For the Week of May 3, 2004 -
May 7, 2004
Brought to you by BKINFORMATION.COM
- The Source for Business Bankruptcy Information on the Internet
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May
6, 2004
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Case
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Court
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Holding
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Taub
v. Weber
(DBN Subscription Required) |
9th
Cir. |
A
bankruptcy petition preparer
engaged in the unauthorized
practice of law by
interpreting the terms
"market value" and
"secured claim or
exemption" in connection
with completion of bankruptcy
forms. |
In
re Mitchem
(DBN Subscription Required) |
Bankr.
W.D. Mo. |
The
future right to maintenance is
not an asset of the bankruptcy
estate, therefore, section
541(a)(5) in inapplicable. |
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May
5, 2004
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Case
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Court
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Holding
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In
re North Star Management, LP
(DBN Subscription Required) |
8th
Cir. BAP |
Although
a professional owes a
fiduciary duty to the estate,
it is not a guarantor.
Where a management company
hired to run the debtor's
business took reasonable steps
to safeguard the debtor's cash
collateral bank accounts, the
bankruptcy court erred in
holding the company liable for
breach of fiduciary duty when
the debtor's principal
wrongfully withdrew funds from
the account by misleading the
debtor's bank. |
In
re W.R. Grace & Co.
(DBN Subscription Required) |
Bankr.
De. |
The
fact that a lawsuit does not
name the debtor as a party is
not dispositive of whether the
automatic stay applies to the
action. If the debtor's
assets would be adversely
affected by the outcome of the
action, or if the action would
result in the losing party
asserting an indemnity claim
against the debtor, the
automatic stay applies to the
action. |
In
re M Group, Inc.
(DBN Subscription Required) |
Bankr.
De. |
Where
the payment aging between a
debtor and a creditor were
altered as bankruptcy became a
possibility, the payments were
not in the ordinary course of
business. |
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May
4, 2004
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Case
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Court
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Holding
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In
re Pittsburgh-Canfield Corp.
(DBN Subscription Required) |
6th
Cir. BAP |
A
reclamation claimant is
entitled to an administrative
claim only to the extent, if
any, that its claim is not
trumped by the lien rights of
secured creditors. Although
the debtor's secured creditor
was significantly oversecured
on the petition date, the
Court approved (and the
reclamation claimants did not
appeal) a DIP financing order
that authorized borrowing that
rendered the secured creditor
undersecured and thus
eliminated any reclamation
rights.
Reclamation
claimants are not entitled to
require the debtor to marshal
the use of their goods to
preserve reclamation
rights. Marshaling only
applies to secured
creditors. |
In
re Portwood
(DBN Subscription Required) |
8th
Cir. BAP |
The
bankruptcy court did not err
in finding that the debtor had
sustained her burden of
proving that a debt was for
"alimony" for
dischargeability purposes even
though the debtor failed to
appear for or participate in
the hearing. |
In
re Renaud
(DBN Subscription Required) |
8th
Cir. BAP |
Under
Arkansas law, the sole method
of perfecting a security
interest in an ATV is through
a notation on the certificate
of title.
Likewise,
the only method for perfecting
a security interest on a
mobile home if through a
notation on the certificate of
title, even when the mobile
has become affixed to real
estate. |
In
re Buracker
(DBN Subscription Required) |
Bankr.
C.D. Ill. |
HEAL
loans of 61 year old Debtor
discharged as unconscionable. |
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May
3, 2004
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Case
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Court
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Holding
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In
re DVI, Inc.
(DBN Subscription Required) |
Bankr.
De. |
Stub
rent (rent conceptually
allocable to the postpetition
portion of the month in which
a petition is filed) is not
entitled to priority payment
under 11 USC 365(d)(3) where
the rent is due on the first
of the month. However,
stub rent, at the prorated
contract rate, is owed as an
administrative expense under
11 USC 503(b) where the debtor
fails to rebut the presumption
that the contract rate is
appropriate.
Moreover,
where the debtor rejects a
lease, but keeps its personal
property at the leased
premises, and fails to return
the keys, the landlord is
entitled to an administrative
expense under 11 USC 503(b)
for such period, payable at
the contract rate. The claim
is not limited by the monetary
benefit the debtor receives
from the sale of its personal
property, since the value of
such property is irrelevant to
the analysis of the landlord's
entitlement. |
Sun
Healthcare Group, Inc., et al.
v. Mead Johnson Nutritional
(DBN Subscription Required) |
Bankr.
De. |
A
default judgment based upon
service to a corporation that
was not addressed to the
attention of an officer or
director is void ab initio. |
In
re Channel Master Holdings,
Inc., et al.
(DBN Subscription Required) |
Bankr.
De. |
The
existence of a cap on
Committee counsel's fees in a
DIP carve out is not
dispositive as to counsel's
right to payment from carved
out funds. A court has
inherent power to direct
disgorgement of by any
professional and to
redistribute those disgorged
fees among all professionals. |
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