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New Cases For the Week of October 16, 2000 - October 20, 2000
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October 19, 2000
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Case
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Court
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Holding
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In
re Shahid
(requires Adobe Acrobat Reader plug-in to view) |
10th Cir. BAP |
There
is no statutory basis for an award of attorney fees to the prevailing
party in a colorable nondischargeability action under 11 USC 727, and
cases awarding legal fees on acontract theory in actions under 11 USC
523(a)(2), cannot be extended by analogy to actions under section
727. The bankruptcy court erred by awarding legal fees to the the
prevailing plaintiff in a section 727 action. |
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October 18, 2000
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Case
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Court
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Holding
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In
re Rincon Island Limited
(requires Adobe Acrobat Reader plug-in to view) |
Bankr. C.D. Cal. |
If
applicable State law requires the filing of an action to enforce lien
rights as a predicate element to perfection of such rights, a creditor
claiming such rights against a debtor in bankruptcy must give notice to
the debtor (in lieu of filing a lawsuit, which would violate the
automatic stay) of the creditor's intention to claim such rights. 11 USC
546(b). However, the notice need not be filed with the bankruptcy
court or even be in writing. An oral notification to a debtor that
a statutory lien claimant intends to file suit and take the legal action
necessary to perfect his lien is sufficient. |
In
re Worldcorp. Inc.
(requires Adobe Acrobat Reader plug-in to view) |
Bankr. Del. |
When
a bankruptcy court approves a settlement agreement providing for
execution of a global mutual release (excluding obligations incorporated
in the settlement agreement) by and between the debtor and a defendant
in an adversary proceeding brought by the debtor, the defendant may not
thereafter offset putative pre-agreement claims against the debtor
against its obligations under the settlement agreement. |
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October 17, 2000
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Case
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Court
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Holding
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| In re Shubov |
9th Cir. BAP |
A
party who waits until after a frivolous motion has been denied cannot
request sanctions under Fed. R. Bankr. P. 9011. By that time it is
necessarily too late to send the "safe harbor" warning
required by the Rule. Sanctions under Rule 9011 can only be awarded
where the party requesting sanctions has sent a safe harbor warning and
the alleged violator of Rule 9011 has refused to withdraw the offending
pleading.
While a court, acting sua sponte, has the authority to
impose certain sanctions under Rule 9011, the court, when acting sua
sponte, does not have the authority to order a violator to pay the other
party's attorneys' fees.
It is questionable whether Rule 9011 applies to an
improper use of a subpoena for discovery.
When an attorney issues a subpoena under his own
signature on behalf of a Court in which the attorney is authorized to
practice (as allowed by Fed. R. Civ. P. 45), the attorney has a duty to
take reasonable steps to avoid imposing undue burden or expense on the
person subject to the subpoena. The Rule contemplates a liberal
construction of what constitutes a breach. When a subpoena should not
have been issued, literally everything done in response to it
constitutes "undue burden or expense" within the meaning of
Civil Rule 45(c)(1). It is similarly "undue" to have to
contend with a motion to compel compliance with an illegitimate
subpoena.
When an attorney in a bankruptcy case issued a third
party subpoena seeking document discovery when no adversary proceeding
or contested matter related to the subpoena, and no Rule 2004
examination had been requested, the attorney abused the subpoena power,
warranting imposition on the attorney of the respondent's costs to quash
the subpoena. |
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October 16, 2000
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Case
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Court
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Holding
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| In
re B.U.M. International |
9th Cir. |
Recognizing
that "there is no question that a bankruptcy court may not conduct
a section 330 inquiry into the reasonableness of fees and their benefit
to the estate if the court already has approved the professional's
employment under 11 U.S.C. 328," the court holds that when a
bankruptcy court specifically reserves the right to approve all fees and
costs of a professional when it approves such professional's employment
on a contingency fee basis, the court is not precluded
from subsequently adjusting or denying such contingency fees based on
reasonableness or benefit to the estate. |
| In re Vincze |
7th |
The
Federal Rules of Bankruptcy Procedure do not require that a
debtor/defendant served with process by mail actually receive such
process. Service is effective when the required documents are
mailed to the address last listed by the defendant on documents filed
with the court.
When debtors/defendants in a bankruptcy adversary
proceeding were out of the country when they were served by mail,
such service was nevertheless effective, and defendants could not
contest post-judgment collection on the grounds that they were
never effectively served with process. |
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