New Cases - Week of February 28, 2011

New Cases For the Week of February 28, 2011 - March 4, 2011

Brought to you by BKINFORMATION.COM - The Source for Business Bankruptcy Information on the Internet

March 1, 2011
Case	Court	Holding

In re Grumman Olson Indus., Inc. (DBN)	Bankr. SD NY	A bankruptcy court has subject matter jurisdiction to adjudicate whether a free and clear sale order absolved a buyer of a debtor's assets from successor liability. Where an injured plaintiff asserted a successor liability claim against a buyer of a debtor's assets, the free and clear sale order did not protect the buyer from such claim. The basis for the plaintiff's claim was not the assets sold by the debtor. Instead, the plaintiff's claim was premised on the facts that the buyer had: "continued the product line since the purchase, traded upon and benefited from the goodwill of the product line, and held itself out to potential customers as continuing to manufacture the same product line." The sale order did not (and probably could not) give the buyer a free pass on future successor liability claims. Moreover, a person injured after the sale (or confirmation) by a defective product manufactured and sold prior to the bankruptcy does not hold a `claim'; in the bankruptcy case and is not affected by either the § 363(f) sale order or the discharge under 11 U.S.C. § 1141(d).
In re General Growth Properties, Inc. (DBN)	Bankr. SD NY	Although there is no question that the reasonable fees of a financial advisor and counsel for an indenture trustee are payable under a confirmed plan by the debtor, the advisor's filing of a State court lawsuit seeking payment of its full contracted fee raised the further question of whether unreasonable fees were also payable. When the action was removed, the bankruptcy court asserted jurisdiction, as the dispute involved the confirmation order as well as pending fee proceedings in the bankruptcy court.
In re Penrod (DBN)	9th Cir.	The Ninth Circuit has denied an en banc rehearing of In re Penrod, which held that a Chapter 13 debtor can bifurcate a "negative equity" loan (i.e., a loan where the debtor traded in an underwater car to purchase another car) into secured and unsecured components. Three dissenting judges issued a detailed opinion stating that the Court was turning the BAP{CPA amendment on its head.