New Cases For the Week of March 5, 2012 - March 9, 2012
March 9, 2012 |
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| In re Rothstein, Rosenfeldt, Adler, P.A. (DBN) |
SD FL | Although a literal interpretation of 28 USC 157 provides no statutory authority for bankruptcy judges to make proposed findings and conclusions for district court review in Stern-type core matters, this is surely not what the Supreme Court intended in Stern. Hence, the defendants' request for withdrawal of the reference in a fraudulent transfer action is denied. The case will remain with the bankruptcy court until ready for a trial by jury, as requested by the defendants. |
March 8, 2012 |
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| In re Market Center East Retail Property, Inc. (DBN) |
10th Cir. BAP | "In the world where bankruptcy judges labor, love does not make the world go `round." Discretion does. In awarding professional fees, a bankruptcy judge is not limited to the "lodestar method." The factors contained in § 330(a)(3) do not constitute a closed set. A bankruptcy court may look to factors not included in that list. The only prohibition upon a court's review of compensation is found when a court approves a contingent fee under § 328. It is well established that once a contingent fee has been approved under § 328(a), the bankruptcy court may not revoke such approval and award compensation upon something other than a contingent fee basis unless such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions. It is the approval of a contingent fee under § 328 that limits the inquiry of the bankruptcy court, not the mandate in § 330(a) that a bankruptcy court consider all relevant factors. Thus, a bankruptcy judge has the discretion under section 330 to award a contingency fee, rather than a lodestar fee, to a professional. |
| In re Oldco M Corp. (DBN) |
Bankr. SD NY | Settlements are entitled to no greater protection than any other requests for relief from bankruptcy courts. The fact that that public disclosure of settlement terms would undercut the settling defendant's leverage in negotiating with other claimants is insufficient reason to seal a settlement. There is a strong presumption and public policy in favor of public access to court records. |
| In re MF Global, Inc. (DBN) |
Bankr. SD NY | The court approved a proposed settlement between the trustee and a claimant whereby the claimant will receive the return of physical property (specifically, five gold bars and fifteen silver bars). Because the Trustee acknowledges that the property is not part of the estate, the settlement is reasonable. |
March 7, 2012 |
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| Technical Automation Services Corp. v. Liberty Surplus Insurance Corporation (DBN) |
5th Cir. | Due to pre-existing Circuit precedent, the Court declines to apply Stern v. Marshall to prohibit federal magistrate judges from adjudicating State-law counterclaims. The pre-existing precedent relied upon here is a 1985 5th Circuit opinion which holds that the Magistrates Act is saved from any constitutional infirmity by: (i) its requirement that all parties consent to the transfer to the magistrate judge and (ii) the power of the district court to vacate the reference to the magistrate on its own motion. |
| Klestadt & Winters v. Cangelosi (DBN) |
9th Cir. | A district court withdrew the reference to a bankruptcy case and imposed sanctions on several entities and law firms. The court also ordered the law firms to disgorge their $300,000 retainers. The court's sanction order is not an appealable final order. Although there is a "more flexible" standard of finality for bankruptcy appeals to the Circuit Court, that standard only applies to appeals to the Circuit from: (i) BAPs or (ii) district courts hearing bankruptcy appeals. |
| In re MF Global Holdings Limited (DBN) |
Bankr. SD NY | Under section 1102(b)(3)(A), an unsecured creditors committee shall provide access to information for creditors who—(i) hold claims of the kind represented by that committee; and (ii) are not appointed to the committee. Allowing a committee to not disclose confidential and privileged documents pursuant to its information-sharing responsibilities is appropriate. If a creditor is entitled to access to such a document, it can file a motion under section 1102(b)(3)(C). |
March 5, 2012 |
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| In re Tally One, Inc. (DBN) |
Bankr. ND CA | In a case converted from Ch. 11 to Ch. 7, counsel for the Ch. 11 unsecured creditors committee, who did not represent any individual creditor, took actions to solicit the election of a Ch. 7 trustee by creditors. Counsel knew the proposed trustee and expected to be hired by the trustee if the trustee was elected, although both the trustee and counsel denied the existence of any agreement to that effect. Counsel did not file a Rule 2006(e) verified statement, until ordered to do so by the court. The court declined to overturn the election of the trustee, finding that the freedom of the parties to select a trustee was important. However, the court further stated that it was "not inclined" to approve any employment of former counsel for the unsecured creditors committee as counsel for the Ch. 7 trustee or the estate. "[T]he need for things to look right as well as be right prevails here. The integrity of the bankruptcy system demands as much." |
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