New Cases - Week of September 13, 2004

September 17, 2004
Case	Court	Holding

In re Mirant Corp.
(DBN Subscription Required)

Bankr. N.D. Tex.

Decision to allow recoupment are to be made on a case-by-case basis. As an equitable exception to the
normal rules of bankruptcy, the doctrine of recoupment should be narrowly applied. That claims arise under the same contract is not dispositive of the “same transaction” requirement for recoupment. An overpayment or something like it is required to trigger recoupment. Harm to a creditor or benefit to a debtor in excess of that contemplated by the Code is an element necessary to application of the doctrine of recoupment in a bankruptcy case.

Absent overpayment or some other countervailing equity, a party to an executory contract (a master gas purchase agreement) with a chapter 11 debtor, may not recoup from amounts due for that debtor’s postpetition performance a claim arising from that debtor’s rejection of that contract.

In re Mirant Corp.
(DBN Subscription Required)

Bankr. N.D. Tex.

A swap agreement counterparty who reasonably relied on an interim order that appeared to apply to the counterparty did not unduly delay in terminating the swap agreement under section 560 because it acted promptly after the debtor informed it that the debtor did not believe the interim order applied to the counterparty.

September 16, 2004
Case	Court	Holding

Stillwater National Bank and Trust Company v. CIT Group/Equipment Financing, Inc. (DBN Subscription Required)	10th Cir.	An agreement requiring a counterparty to a putative lease to repurchase the leased equipment at the end of the lease term revealed the agreement's true character as a financing vehicle.
In re CVEO Corp. (DBN Subscription Required)	Bankr. DE	Where two limitations periods are potentially applicable in a 544(b) claim under California law the court will not imply the shorter period (in order to dismiss the complaint) where the plaintiff has not specified in the complaint which California statute is at issue.
In re Sosnowski (DBN Subscription Required)	Bankr. DE	The res judicata effect of debtor's confirmed plan precluded a creditor from recording an unperfected mortgage.

September 15, 2004
Case	Court	Holding

In re Chubb (DBN Subscription Required)	Bankr. E.D. Tenn.	A debtor who is current on his secured debt cannot retain the collateral of a secured creditor simply by continuing to make contractual payments on the debt.
In re Park (DBN Subscription Required)	Bankr. N.D. Ill.	Selling cars out of trust is not inherently fraudulent.
Heavrin v. Nelson (DBN Subscription Required)	6th Cir.	Because statements in pleadings filed in judicial proceedings are absolutely privileged when material, pertinent, and relevant to the subject under inquiry, an allegedly false proof of claim cannot form the basis for a private action against the creditor for fraud or perjury.

September 13, 2004
Case	Court	Holding

In re Busetta-Silvia (DBN Subscription Required)	10th Cir. BAP	The bankruptcy court erred in holding that services performed prepetition by an attorney for a Chapter 13 debtor must be fully paid before filing or else be treated like any other prepetition claim.