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New Cases For the Week of July 24, 2000 - July 28, 2000
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July 28, 2000 |
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Case |
Court |
Holding |
| In re National Environmental Waste | 9th Cir. | So long as recovery of a debtor's malpractice claim will substantially benefit creditors, a State statute of limitations for malpractice is extended until two years after the petition date pursuant to 11 USC 108 even though the confirmed plan of reorganization did not specifically mention the malpractice claim, and the claim was not filed until nearly a year after the plan was confirmed. |
| Wallace Hardware Co., Inc. v. Abrams | 6th Cir. | Guarantors of
debtor's debt could assert debtor's claims or defenses as defensive
offsets even though debtor's trustee had previously settled with
guaranteed creditor and generically released all claims and defenses
debtor might have against creditor.
If guarantors were not permitted to retain and assert debtor's defenses despite debtor's prior settlement/release with guaranteed creditor, the independent nature of the separate creditor/debtor and creditor/guarantor agreements would be subverted, converting this independence into a one-way street favoring the creditor. However, if the debtor's prior settlement already took account of the value of the debtor's offsets that the guarantors now seek to assert, the bankruptcy court must value such offsets and the guarantors can no longer assert such offsets as offset defenses to guaranty claims against them. |
| In re Wintz Companies | 8th Cir. | Where bankruptcy court avoids a prepetition transfer of property as a fraudulent transfer and then authorizes sale of the same property to a third party, the finality rule of 11 USC 363(m) prevents the original transferee from seeking to overturn the sale even when the original owner (the transferee - defendant in the fraudulent transfer ruling) appeals the avoidance decision (without a stay) and prevails. |
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July 27, 2000 |
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Case |
Court |
Holding |
| In re Cedic Development | 9th Cir. | Bankruptcy
court did not abuse its discretion when it approved fee enhancement to
debtor's counsel over debtor's objection when: (i) counsel faced a real
risk of nonpayment, unrelated to the substantive merits of the
bankruptcy case and (ii) counsel's hourly rates were below prevailing
market rates.
Risk of nonpayment is a valid consideration in assessing whether fees should be increased beyond the lodestar amount when the risk of nonpayment is not created by any contingency in the merits of the litigation. Here, the risk of nonpayment was evidenced by the debtor's historical failure to pay its counsel. |
| In re Kemmerer | 8th Cir. BAP | Debtor's interest in a rollover individual retirement annuity is not an exemptible individual retirement account within the meaning of Iowa law. Iowa Code Section 627.6(8)(f). |
| Bateman v. United States Postal Service | 9th Cir. | Under Fed. R.
Bankr. P. 9006(b)(1), excusable neglect includes not only situations
beyond an attorney's control, but also negligence on the part of
counsel.
The determination of whether neglect is excusable is an equitable one that depends on at least four factors: (1) the danger of prejudice to the opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the reason for the delay; and (4) whether the movant acted in good faith. |
| In re Travelstead | D. Md. | When a plan of reorganization is ambiguous, the bankruptcy court is authorized to look to statements made on the record by counsel for debtor to aid in interpreting the meaning of the plan. |
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July 25, 2000 |
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Case |
Court |
Holding |
| In re Renshaw | 2d Cir. | College which continues to allow student to attend classes after student has failed to make tuition payments has not extended an "educational loan" that would be excepted from discharge. The debt arising from unpaid tuition is a "past-due account" rather than a "loan." |
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July 24, 2000 |
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Case |
Court |
Holding |
| Hollowell v.
Orleans Regional Hospital (not yet published online) |
5th Cir. | Bankruptcy prohibition on "lumped" time entries in professionals' bills does not apply to fees awarded under fee shifting statutes. |
| Fleming v. Fleming | Court of Appeals, Virginia | When one spouse files bankruptcy and discharges credit card and other debts that the filing spouse was liable for under a separation agreement, a divorce court may not enter a postdischarge order increasing spousal support in the amount of the discharged debts, as such an order would serve to circumvent the discharge granted by the federal bankruptcy court |
| Chanute Production Credit Corp. v. Schicke | Court of Appeals Kansas | Although a State court has concurrent jurisdiction with the Bankruptcy Court to determine dischargeability issues (except with respect to issues covered by 11 USC 523(c)), a State court does not abuse its discretion when it dismisses an action in which discharge is pled as an affirmative defense with instructions to the parties to file an action in the Bankruptcy Court seeking an adjudication of the dischargeability of a debt that was allegedly not accurately scheduled. |
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This page was last edited on 04/08/2002