New Cases For the Week of November 6, 2000 - November 10, 2000

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November 10, 2000

Case

Court

Holding

In re K.D. Co.
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10th Cir. BAP Because a confirmed Ch. 11 plan provided that any unpaid administrative claimants could seek disgorgement from professional administrative claimants who had been paid, the confirmation order was res judicata, and the bankruptcy court did not err in awarding an unpaid administrative claimant a $40,000 judgment against debtor's counsel.

While a confirmed plan has indicia of a "new contract" between the debtor and pre-confirmation claimants, it is also clear that such a plan, once confirmed by court order, is much more than a mere contract and cannot be defeated under contractual principles by a party in interest who claims to have not agreed, or to have been mistaken about the effect of the plan.

In re Van Tol
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10th Cir. BAP A dairy farmer/debtor's "capital retain account" with an agricultural cooperative is a general intangible.

An "account debtor," for the purposes of the UCC is "any person who is obligated on an account, chattel paper or a general intangible.

Under New Mexico law, a capital retain is a debt owed to the debtor/farmer (as opposed to an equity interest in the cooperative), distinguishing In re Bonnema, 219 B.R. 951 (Bankr. N.D. Tex. 1998).

Despite restrictions on pledging capital retains contained in the agricultural cooperative's bylaws, a lender's perfected interest in a debtor/farmer's general intangibles captured the debtor's future rights to payment from his capital retain account. Section  9-318 of the New Mexico UCC (voiding contractual restrictions on transfer between an account debtor and the account obligee) vitiated the cooperative's  transfer restrictions.

U.S. v. Pope 8th Cir. Although the federal Sentencing Guidelines indicate that in fraudulent loan cases the actual or expected  "loss" to the lender/victim should be offset against the amounts the lender has recovered, or can expect to recover from pledged collateral, the unencumbered assets of a defendant's bankruptcy estate are not "pledged assets" and thus cannot reduce the amount of the "loss" for sentencing purposes, even if the lender may recover in full as an unsecured creditor. 

November 9, 2000

Case

Court

Holding

In re CSI Enterprises, Inc. 10th Cir. Asset protection trust did not justifiably rely on alleged false financial statements of target company when trust settlor, who acted as investment advisor to trust, and could replace trustee at any time, made purchase decision and merely transferred purchased shares to trust after the fact as investment vehicle. 
In re Bell 2d Circuit The conversion of a case from Chapter 11 to Chapter 7 does not trigger a new period for the filing of objections to exemptions.

November 7, 2000

Case

Court

Holding

In re Cassell 6th Cir. BAP

 

The bankruptcy court abused its discretion when it sanctioned a claimant under Fed. R. Bankr. P. 9011 for failing to conduct an adequate prefiling investigation into the reasonableness of the factual allegations underlying the proof of claim.
In re Miller 10th Cir. The bankruptcy court did not err in refusing to modify an order approving a compromise and sale after it was discovered that a third party asserted an ownership interest in a substantial portion of the real property to be sold. 
In re Bentz Metal Products Co. 7th Cir. Employees' State law statutory lien claims for vacation pay under a collective bargaining agreement were preempted by the Labor Management Relations Act, such that the lien claims were trumped by the secured claim of the debtor's lender.

November 6, 2000

Case

Court

Holding

 
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