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New Cases For the Week of July 26, 2004 -
July 30, 2004
Brought to you by BKINFORMATION.COM - The Source for Business Bankruptcy Information on the Internet
July 29, 2004 |
Case |
Court |
Holding |
In re Miller
(DBN Subscription Required) |
6th Cir. |
Section 105 authorizes a bankruptcy court to grant a partial discharge of a student loan, but only upon proof that repayment the discharged portion of the loan would be an undue hardship. |
In re Cellular 101, Inc.
(DBN Subscription Required) |
9th Cir. |
The bankruptcy court did not err in allowing a "substantial contribution" administrative claim to a creditor that filed a plan that was confirmed and paid all creditors 100%. Although the plan proponent/creditor did not contribute money to the funding of the plan, a creditor need not provide the funds used in the reorganization in order to "substantially contribute" to the plan. |
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July 28, 2004 |
Case |
Court |
Holding |
In re First Central Financial Corporation
(DBN Subscription Required) |
2nd Cir. |
Because a written agreement existed between a debtor and a creditor covering how taxes were to be allocated, and because the debtor's estate was not unjustly enriched by its trustee's retention of a tax refund, the bankruptcy court and district court did not err in refusing to impose a constructive trust on the refund for the benefit of the creditor. |
In re Osoborne
(DBN Subscription Required) |
5th Cir. |
"The continued confusion is so confounding that we must assume that minds were completely disengaged." Because the debtor had proven excusable neglect, the bankruptcy court abused its discretion in not vacating its order allowing relief from stay pursuant to a "drop dead" clause. |
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July 26, 2004 |
Case |
Court |
Holding |
Lockhart v. Ashcroft
(DBN Subscription Required) |
9th Cir. |
Social Security benefits not exempt under Debt Collection Act from administrative offset collected by government to secure repayment of governmental loans. |
In re NorthWestern Corp.
(DBN Subscription Required) |
Bankr. De. |
Although counsel's failure to publicly disclose its prior dual representation of the debtor and an entity from whom the debtor had acquired assets was inadequate, such deficient disclosure does not automatically mandate disqualification of counsel.
Where neither the debtor, the transferor company complained about a potential conflict of interest, and where a disqualification challenge was raised by a creditor which did not acquire the debtor's bond debt until after the transfer was effected (and thus was not a "creditor" which could have been harmed when the transaction took place), disqualification was not warranted. |
In re NorthWestern Corp.
(DBN Subscription Required) |
Bankr. DE |
Although an unresolved litigation issue as to which documents had not yet been produced might have been dispositive in favor of the debtor, this fact did not warrant denial of a settlement between the debtor and the other litigant. Resolution of the highly disputed issue would have taken many months, and this fact coupled with the expense and uncertainty of the litigation justified settlement. |
In re Mariner Post-Acute Network, Inc.
(DBN Subscription Required) |
Bankr. DE |
Where a debtor's confirmed plan discharged any claims other than for actual losses, a creditor's claim for statutory attorney's fees was not discharged. Although the American Rule does not treat attorney's fees as damages, statutory attorney fees are treated as actual losses. |
In re Bake-Line Group LLC
(DBN Subscription Required) |
Bankr. DE |
A utility is not required to receive a postpetition promise of administrative priority prior to providing utility service in order to achieve such priority.
A stipulation between a debtor and a lessor providing for retroactive rejection of a lease is not binding on a third party utility which is not a party to the stipulation. Moreover, a debtor is responsible for post-rejection use of leased premises where the debtor remains in possession.
A utility's claim for an administrative expense is however, limited to the reasonable value of the utility services provided. Where a utility provided services as a default "last resort" utility (due to discontinuation of service by the debtor's prior utility) the contract rate negotiated between the debtor and its prior utility was reasonable, but the PUC-approved "last resort rate" (which was nearly 30 times higher per day) was not. |
In re LaRoche Industries, Inc.
(DBN Subscription Required) |
Bankr. DE |
Actions based upon a debtor's postpetition contracts are core proceedings which are thus not subject to mandatory abstention.
Where a debtor's confirmed plan has been consummated and the case closed for over a year, adjudication of a pending postpetition State law contract action by the bankruptcy court will have no effect of creditors, and the overburdened court's "familiarity with the case" is an inadequate basis for adjudication. |
In re Eagleton
(DBN Subscription Required) |
Bankr. N.D. Tex. |
Where a bank was unable to produce a signed joint account agreement showing the debtor was a joint account holder on an account in the bank, the bank had failed to satisfy its burden of proof to subject the funds in the account to its claim against the debtor. The bank's computer records listing the debtor as a joint account holder were insufficient.
Moreover, even if the bank had been able to produce a signed joint account agreement, the bank was required to overcome evidence that the true owner of the account never intended to transfer any beneficial interest in the account to the debtor, but merely asked the debtor to act as signatory to the account as a convenience. |
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