New Cases - Week of April 28, 2008

New Cases For the Week of April 28, 2008 - May 2, 2008

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May 1, 2008
Case	Court	Holding

In re: Strack (DBN Subscription Required)	4th Cir.	In Chapter 7 bankruptcy proceedings, a decision finding a particular debt dischargeable is reversed where: 1) the debt arose by reason of debtor's "defalcation," or nonfraudulent default, while he was acting in a fiduciary capacity; and 2) consequently, 11 U.S.C. section 523(a)(4) renders the debt non-dischargeable.
In the Matter of: Babcock & Wilcox Co. (DBN Subscription Required)	5th Cir.	There was no abuse of discretion in awarding attorney's fees at half the hourly rate for time spent traveling but not working, as opposed to the full hourly rate.

May 1, 2008
Case	Court	Holding

In re Stasz (DBN Subscription Required)	9th Cir. BAP	An order of civil contempt issued in a contested matter within a main bankruptcy case, unlike in an adversary proceeding, is a final, appealable order.
In re Findley (DBN Subscription Required)	9th Cir. BAP	Despite the State's amendment of its Business and Professions Code to denominate attorney discipline costs as penalties, such costs are not penalties excepted from discharge due to Circuit precedent suggesting that the intention of the State law is civil rather than punitive.
In re Wiegand (DBN Subscription Required)	9th Cir. BAP	A chapter 13 debtor engaged in business may not deduct ordinary and necessary business expenses from gross receipts for the purpose of calculating current monthly income as defined under § 101(10A). Rather, such deductions are authorized under § 1325(b)(2)(B) and, therefore, are to be subtracted from current monthly income when calculating disposable income pursuant to § 1325(b)(2). To the extent that Part I of Form 22C requires a business debtor to calculate current monthly income by subtracting ordinary and necessary business expenses from gross receipts, Part I of Form 22C is inconsistent with § 1325(b)(2).

April 29, 2008
Case	Court	Holding

In re: Penn Traffic Co. (DBN Subscription Required)	2nd Cir.	A non-debtor party to a contract which is executory at the time a bankruptcy case is commenced cannot, by post-petition tender or performance of its own outstanding obligations under the contract, deprive the debtor party of the ability to exercise its statutory right to reject the contract as disadvantageous to the estate.

April 29, 2008
Case	Court	Holding

In re Rush
(DBN Subscription Required)

Bankr. W.D. Mo.

Below-median debtors who have, according to the applicable formula, no disposable income have no projected disposable income and no applicable commitment period and therefore no requirement to commit any particular sum of money to the payment of their unsecured creditors pursuant to a plan.

The appropriate method for determining projected disposable income for below-median debtors is to deduct from their current monthly income, the reasonable and necessary expenses as reflected on Schedule J, with certain adjustments.

In re: The Brown Schools
(DBN Subscription Required)

Bankr. DE

Where defendants had an alleged fiduciary duty to a debtor, claims based upon their actions which deepened the debtor's insolvency are not subject to summary dismissal based upon the Trenwick decision (rejecting "deepening insolvency" as a Delaware cause of action).

The prepetition act of seeking a priority claim may evidence intent to hinder, delay or defraud other unsecured creditors, supporting a claim for an actually fraudulent transfer.

A trustee states a claim against a law firm providing pre-petition restructuring advice when he alleges that the firm aided and abetted a breach of fiduciary duty by other restructuring professionals when the firm advised regarding formation of a lien which the court previously determined to be unavoidable.

An averment in a disgorgement claim that a law firm providing pre-petiiton restructuring advice received fees from the Debtors knowing and intending that they were payment for helping one creditor hinder the Debtors' other creditors states a sufficient cause of action for pleading purposes.