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New Cases For the Week of July 25, 2011 - July 29, 2011
| July 27, 2011 |
In re Quebecor World (USA) Inc.
(DBN) |
Bankr. SD NY |
As a result of the recent decision of the 2nd Circuit in In re Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V. (and as predicted in the dissent in that case), the bankruptcy court need no longer consider conflicting evidence about usage of the term "settlement payment" within the private placement sector of the securities industry or to decide whether the prepetition transfers of value to the defendants should be characterized as a redemption of private placement notes rather than a repurchase. Per the Enron opinion, the transfers are settlement payments and are unavoidable. |
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| July 26, 2011 |
In The Matter Of: Dorothy Chase Stewart
(DBN) |
5th Cir. |
The bankruptcy court issued an injunction requiring a bank to audit all proofs of claim filed in the district since 2007 after the bank's proof of claim in a particular case revealed potential large and pervasive problems with the bank's claim filing process. The bankruptcy court lacked authority to issue the injunction. The case involves only the estate of a single debtor, and the dispute is between the estate and the bank. There is no demonstrated likelihood that the debtor will ever again be subject to an incorrect proof of claim filed by the bank. The debtor filed no counterclaims on behalf of a class, nor does this case present any class claims by the trustee or by other creditors adversely affected by inflated proofs of claim. Nor does authority for injunction lie in "the inherent power of the court to protect its jurisdiction and judgments and to control its docket. Although deficiencies found in the bank's claim in the instant case do cast a shadow on its other claims, misdeeds in other cases can be addressed by the judges in those cases. If the case-by-case process, with the discipline of developed jurisprudence, is thought to be inadequate, there remains the rule making authority. |
In re XMH Corp.
(DBN) |
7th Cir. |
The universal rule is that trademark licenses are not assignable in the absence of a clause expressly authorizing assignment. |
In re Trikeenan Tileworks, Inc
(DBN) |
Bankr. NH |
Advances of balance sheet neutral debt and waivers of administrative/priority claims aren't new value to support a plan.
An unrelated party, including a competitor, can purchase claims for the sole reason of insuring standing to propose a competing plan of reorganization. |
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| July 26, 2011 |
In re Crescent Resources
(DBN) |
Bankr. WD TX |
The 5th Circuit requirement that a plan must must contain "specific and unequivocal" language reserving clams to be pursued post-confirmation allows use of the "Categorical Approach" in which claims are described by category rather than by the specific persons to be sued. |
In re Seda France, Inc.
(DBN) |
Bankr. WD TX |
An unsecured creditor is not entitled to post-petition attorneys' fees under a confirmed Chapter 11 plan that pays creditors in full, even if even if there is an underlying contractual right to such fees. |
In re Golf 255, Inc.
(DBN) |
7th Cir. |
Fraud on the court is fraud that ordinarily couldn't be discovered, despite diligent inquiry, within a year, and in some cases within many years—cases in which there are no grounds for suspicion and the fraud comes to light serendipitously. Examples are bribery of a judge or exertion of other undue influence on him, jury tampering, and fraudulent submissions by a lawyer for one of the parties in a judicial proceeding, such as tendering documents he knows to be forged or testimony he knows to be perjured.
A lawyer's perjury is deemed fraud on the court but simple perjury by a witness (perjury not suborned by a lawyer in the case) is not. |
In re Fountain Powerboat Industries, Inc.
(DBN) |
Bankr. ED NC |
A stay pending appeal issued under Fed. R Bankr. P 8005 is effective only through completion of district court appellate proceedings. |
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| July 25, 2011 |
In re The Colonial Bancgroup, Inc.
(DBN) |
Bankr. MD AL |
A plan which contains a provision stating that if the plan trustee decides not to pursue a claim the plan committee can pursue the claim, cannot be confirmed.
A trustee has a fiduciary duty to act in the best interest of the estate. Whether the trustee be a plan trustee or a chapter 7 trustee, that trustee will be tasked with the responsibility of analyzing all potential causes of action, the costs of prosecuting the actions, the likelihood of prevailing in the actions, and the chances of collecting any judgment. The trustee will then make a determination whether, in his best judgment, pursuit of that action is warranted on behalf of the estate. If a trustee, in the exercise of his fiduciary duty, determines that pursuit of a cause of action is not warranted on behalf of the estate, such litigation can only be deemed high-risk and speculative. Pursuit of the same cause of action by the plan committee using estate funds would constitute an additional layer of expense that would not exist in a chapter 7 case |
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