New Cases - Week of November 21, 2011

New Cases For the Week of November 21, 2011 - November 25, 2011

November 23, 2011
In re J.H. Investment Services, Inc. (DBN)	11th Cir.	A creditor must take an affirmative step to pursue an unsecured claim. § 506(a)(1) does not automatically assert a deficiency claim. An undersecured creditor is not required to pursue a deficiency claim. In fact, the Rules and Official Bankruptcy Forms suggest that when an undersecured creditor does not note an unsecured claim on its proof of claim, it has decided not to pursue that claim. If a creditor fills out the proof of claim form in a manner that indicates the creditor believes that it is fully secured, it has waived any unsecured claim.

November 22, 2011
SG & Company Northeast, LLC v. Good (DBN)	Bankr. ND IL	The Seventh Circuit interprets "related to" jurisdiction more narrowly than other circuits. It does so to prevent the expansion of federal jurisdiction over disputes that are best resolved by the state courts. A dispute is "related to" a bankruptcy case only if it "affects the amount of property for distribution [i.e., the debtor's estate] or the allocation of property among creditors. After confirmation of a chapter 11 plan, "related to" jurisdiction is "sharply reduced. Since the bankruptcy estate ceases to exist upon confirmation, "related to" jurisdiction is appropriate only to ensure that reorganization plans are implemented and to protect estate assets devoted to implement the confirmed plan. If a confirmed plan distributes the claims at issue in litigation to a creditors trust, there is no estate and the outcome of the litigation cannot affect the amounts distributed to creditors. Hence, the bankruptcy court lacks subject matter jurisdiction over such claims. Once the claims were transferred to the trust on confirmation, all questions about the allocation of estate property among creditors ended, just as questions ended about the amount of estate property to be distributed.