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

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March 24, 2011

Case

Court

Holding

In re FPSDA I, LLC
(DBN)
Bankr. ED NY Where an unexpired lease is part of an integrated deal, a debtor cannot assume and cure the lease without assuming a curing defaults under other executory contracts that pertain to the integrated deal (here, a franchise). However, where there is an integrated deal, the time limits of 11 USC 365(d)(4) (requiring a lease assumption/rejection decision within 120 days) do not apply, and the debtor has until confirmation to decide on assumption or rejection of the deal.
Whyte v. PricewaterhouseCoopers LLP
(DBN)
ND OK

The federal district court had "related to" jurisdiction over removed pre-petition State-law claims against an accounting firm brought by a post-confirmation litigation trustee. Successful recovery by the trustee would benefit creditors, thus establishing jurisdiction. Federal statutory law establishes federal jurisdiction over civil proceedings that are "related to cases under title 11," and makes no distinction between pre and post-confirmation proceedings.

The court however, was required to mandatorily abstain from adjudicating the claims. There was no issue timely adjudication in State court. "Timely adjudication" relates to the potential effect that non-bankruptcy adjudication may have on the administration of the bankruptcy estate. Here, a plan was already confirmed. Hence, the administration of the estate would not suffer from the time landscape in State court.

     
March 22, 2011

Case

Court

Holding

In Re Don R. Kight
(DBN)
Bankr. SD SC A bankruptcy attorney cannot file personal bankruptcy in a district where venue is not proper based upon the theory that all judges and trustees in the proper district would have a conflict of interest in his case.
Jeffrey C. Stone, Inc. v. Greenberg Traurig, LLP
(DBN)
D. AZ A creditor which is sophisticated both commercially and legally cannot blindly rely on the putative good faith of its counsel's representations regarding the law and the facts. The creditor has an obligation to make at least a cursory inquiry into its counsel's representations in the pleadings and its failure to do so does not excuse it but rather suggests bad faith.
     

 

 
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