This page was last edited on 04/08/2002
New Cases For the Week of July 17, 2000 - July 21, 2000
Compilation copyright © 2000 [BKinformation.com]. All rights reserved.
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July 20, 2000 |
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Case |
Court |
Holding |
| Fogel v. Zell | 7th Cir. | Potential
product liability tort claimant does not have "contingent
claim" cognizable in bankruptcy when the act that would constitute
the harm has not occurred prior to the claim bar date.
When names and addresses of potential large product liability claimants (i.e., debtor's customers who purchased potentially defective pipe) are ascertainable, notice by publication of the claim bar date is insufficient. Knowledge of filing date will be imputed to be knowledge of claim bar date in Chapter 7 cases, but not in Chapter 11 cases. Although bankruptcy trustee has exclusive right to pursue derivative claims (such as fraudulent transfer claims), he does so as a fiduciary of the creditors. If he settles such claims to the detriment of a creditor entitled to participate in the estate, the settlement may not be binding on such creditor. Creditor with derivative claim (i.e., fraudulent transfer/looting claim) who is improperly excluded from the benefits of a settlement of such claims by the bankruptcy estate can make demand on trustee to pursue settling defendants to recover benefit denied to creditor. If trustee refuses, creditor can pursue such litigation in its own name
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| In re National Gypsum Company | 5th Cir. | When a plan of reorganization is arguably ambiguous, and parties in interest commence an action in the bankruptcy court seeking interpretation of the plan, the bankruptcy court should attempt to determine what the court's intention was when it confirmed the plan. Extrinsic evidence of the court's intention is admissible. However, an appellate court, reviewing the same record presented to the bankruptcy court, can reverse the bankruptcy court's interpretation of the plan and find that the bankruptcy court's original intention regarding the meaning of the plan is different than the court itself concluded. |
| In re Omega Environmental, Inc. | 9th Cir. | Secured creditor perfected its security interest in certificate of deposit by possession, based upon the definition of certificate of deposit as an "instrument" under the UCC. |
| In re Boggan | 9th Cir. BAP | A creditor who retains possession of collateral securing a statutory (mechanics') lien in order to maintain perfection of the lien does not violate the stay |
| In re Roussos | 9th Cir. BAP | State court
judgment for fraud and breach of fiduciary duty in which damages were
calculated pursuant to "benefit of the bargain" measure (as
allowed under State law) was nondischargable even though measure of
damages exceeded creditor's actual out of pocket loss.
There are two separate and distinct causes of action in a dischargeability proceeding: (i) an action on the debt and (ii) an action on the dischargeability of the debt. In fraud cases, the nondischargable debt must be the total liability of the perpetrator for the fraud. Debtor's attempt to challenge State court's determination of the amount of his fraud liability violated Rooker Feldman doctrine |
| In re Telectronics Pacing Systems, Inc. | 6th Cir. | Likelihood of
bankruptcy if "limited fund" class action settlement is not
approved is not a proper consideration is assessing the
settlement. Approval of class settlements on such a basis would
usurp the bankruptcy system under the rubric of settlement.
In addition, bankruptcy requires comprehensive scrutiny of administrative expenses, and "It is difficult to believe that administrative expenses in bankruptcy would amount to more than 25% of the total estate," the amount sought by the class action attorneys. |
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July 19, 2000 |
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Case |
Court |
Holding |
| Golman-Hayden Co., Inc. v. Fresh Source Produce Inc. | 5th Cir. | Individual
shareholders, officers, or directors of a corporation who are in a
position to control PACA trust assets, and who breach their fiduciary
duty to preserve those assets, may be held personally liable under PACA
Sole shareholder of produce corporation which filed bankruptcy was personally liable for difference between PACA claimant's pro rata distribution from Chapter 7 estate and total amount of claimant's PACA claim. Unless PACA claimant successfully sues to establish segregated trust res for benefit of multiple PACA claimants, award of attorneys fees to PACA claimant is improper, since PACA does not provide for attorneys fees, and claimant has not established a common fund warranting payment of attorneys fees under common fund doctrine. |
| In re Goldenberg | 11th Cir. | The following
question is certified to the Florida Supreme Court:
ARE THE CASH SURRENDER VALUES OF "ANNUITY CONTRACTS" EXEMPT FROM LEGAL PROCESS UNDER FLA. STAT. ANN. § 222.14 (WEST 1998)? |
| In re Cervantes | 9th Cir. | An absent parent who owes money to a County for child support payments made by the County prior to the entry of a child support order have that debt discharged in a Chapter 7 or 13 bankruptcy proceeding |
| In re Damaia | 4th Cir. | Revocation of
Chapter 7 discharge requires affirmative proof that creditor did not
know of fraud related to discharge before discharge was entered.
Creditor failed to carry its burden of proof in action to revoke Chapter 7 discharge when evidence showed that creditor's attorneys knew began investigating bankruptcy 3 months before discharge was entered. |
| U.S. v. Paradis | 1st Cir. | Absent evidence that creditors in a bankruptcy were not paid in full, an order of restitution is an improper sentence in a conviction for laundering money that was concealed from a bankruptcy trustee. |
| In re Cantu | 1st Cir. | Taken together, a loan agreement and a funds advance voucher constitute a signed security agreement |
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July 18, 2000 |
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Case |
Court |
Holding |
| Jowers v. Arthur | Crt. of Appeals, Georgia, Second Division | Judicial estoppel does not bar prosecution of personal injury claim omitted from bankruptcy schedules when bankruptcy petition is dismissed and second petition and schedules are filed which list personal injury claim |
| In re Read (unpublished) |
10th Cir. | State court default child support judgment entered pursuant to notice by publication was protected from collateral attack in bankruptcy court under Full Faith and Credit Act |
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July 17, 2000 |
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Case |
Court |
Holding |
| In re Tanner | 11h Cir. | Chapter 13 anti-modification rule of 11 USC 1322(b)(2) and Nobelman does not apply to wholly unsecured junior mortgages |
| In re Palmer | 6th Cir. | 3-year look-back period of 507(a)(80(A)(i) is not tolled by bankruptcy case and automatic stay pending during look-back period. 11 USC 507(a)(8)(A)(i) is plain and unambiguous |
| Olsen v. Floit | 7th Cir. | Asset transaction in which owner of debtor corporation receives large payment for covenant not to compete is not a breach of fiduciary duty to the corporation (i.e., a diversion of a corporate asset that should have gone to the corporation) when evidence supports finding that value paid for of covenant was reasonable and debtor corporation had no employment contract or noncompetition agreement with owner. |
| In re DiSalvo | 9th Cir. | Individual debtor in possession cannot avoid claim preclusion of effect of prior order on the basis that he was responding to the prior proceeding (involving dischargeability and validity of an ex-spouse's claim) as the "individual debtor" rather than the debtor in possession. |
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This page was last edited on 04/08/2002