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case update … holiday style!

2nd cir

In re: Smith, No. 06-4450, 06-5323

Orders granting Chapter 7 trustee’s motion to remove special personal injury counsel and denying debtor’s motion to dismiss her bankruptcy action are vacated in part where the bankruptcy court exceeded the bounds of its allowable discretion in denying the debtor’s motion to dismiss.

5th cir

In The Matter of: Scotia Pac. Co. LLC, No. 07-40487

In a bankruptcy case involving debtor-limited liability company whose business was to derive maximum revenue from timber grown on certain lands transferred to it while maintaining sustainable forests, denial of noteholders’ motion to expedite the bankruptcy proceedings is affirmed where the bankruptcy court correctly held that the bankruptcy debtor was not a “single asset real estate” (SARE) debtor under section 101(51B) of the Bankruptcy Code and was therefore not subject to expedited reorganization procedures set forth in section 362(d)(3) of the Code.

In The Matter Of: Ahern Enters. Inc., No. 06-30986

In a bankruptcy case, a judgment in favor of mortgage-holder holding that appellant’s judgment lien was voided during the bankruptcy proceeding is affirmed as, upon confirmation of the reorganization plan, the lien was voided under 11 U.S.C. section 1141(c). Read more…

6th cir

Thompson v. Greenwood, No. 06-6430, 06-6519

In the bankruptcy context, the venue requirements of 28 U.S.C. section 1408 are mandatory, not optional. 28 U.S.C. section 1412 applies only to bankruptcy cases filed in a proper venue. 28 U.S.C. section 1406 applies to cases, including bankruptcy cases, filed in an improper venue. Federal Rule of Bankruptcy Procedure 1014(a)(2) must be interpreted as authorizing the transfer of an improperly venued case only to a district in which the case could have originally been brought, and only in the interest of justice, in accordance with the plain language of section 1406.

Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., No. 06-3767, 06-4190, 06-4301, 06-4492

In a dispute over an insurer’s obligations, which arose within part of multidistrict litigation resulting out of the collapse of plaintiff-bankruptcy debtor’s equipment leasing business in what was alleged to have been a Ponzi-type scheme, an order granting a 12(c) motion in favor of banks and against the insurer with respect to liability is affirmed. However, the award of damages is reversed and remanded as the insurer’s liability as surety should not exceed the principal obligation due to a bank as the intended obligee.

7th cir

In re: Cohen, No. 06-3396

In an appeal arising from an adversary complaint in bankruptcy proceedings alleging that a loan to debtor was not dischargeable in bankruptcy, summary judgment for the debtor is affirmed where: 1) the lower courts correctly determined that plaintiff failed to carry its burden of proof with regard to the alleged material falsity of a list of accounts receivable, which had been used in securing the loan at issue; and 2) there was no error in a conclusion that plaintiff failed to supply evidence that the debtor had an intent to deceive.

9th cir

In re: Lewis, No. 06-35255

In a bankruptcy case involving the dischargeability of a debtor’s student loan obligation to the government, a judgment for the U.S. Department of Education is affirmed as: 1) the district court correctly ruled that debtor’s student loans are governed by a retroactive 1998 Amendment to 11 U.S.C. section 523(a)(8)(A) which eliminated the dischargeability of his loan; 2) through its power to legislate on bankruptcies, Congress has the power to impair contractual obligations, even retroactively; 3) debtor’s claim to an absolute right to a discharge in bankruptcy is rejected; and 4) debtor has not been deprived of a property interest.

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