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Case Roundup – Sanitized for your Production

2nd cir

Chartschlaa v. Nationwide Mutual Ins. Co., 05-5988 [Aug. 14, 2008] In action arising from insurer’s termination of relationship with former sellers of its policies, district court’s denial of defendant’s motion for judgment as a matter of law is reversed where the claims of former sellers belong to the bankruptcy estate of former insurance seller, and not to either of the plaintiffs.

5th cir

Matter of United Operating, LLC, 07-51074 [Aug. 12, 2008]

In a suit following a bankruptcy case alleging mismanagement of debtor’s property during reorganization, summary judgment against debtor is affirmed where debtor, in agreeing to the bankruptcy reorganization plan, failed to retain its right to bring a post-confirmation action, and therefore lacked standing.

Matter of Yorkshire, LLC, 07-20644 [Aug. 12, 2008]

Bankruptcy court’s order sanctioning debtors for filing two bankruptcy petitions in bad faith is affirmed where the bankruptcy court did not err in concluding that the bankruptcy cases had been filed with a bad motive and with no meaningful thought being given to the actual purposes of Chapter 11 bankruptcy.

6th cir

Winget v. JP Morgan Chase Bank, N.A., 07-1657 [Aug. 11, 2008]

In an action against defendant-JP Morgan raising claims of breach of guaranty and pledge agreements and requests for declaratory judgments, dismissal of the complaint and rulings against plaintiffs are affirmed where the district court: 1) acted within its discretion in dismissing the complaint without leave to amend; 2) correctly struck plaintiffs’ amended complaint; 3) employed the correct standard of review in examining the complaint; 4) acted without error in looking to bankruptcy court orders when dismissing the complaint; 5) did not err in ignoring the independence of plaintiffs claims as a guarantor; 6) correctly held that plaintiffs’ claims were barred by res judicata; and 7) correctly held that the claims were not reserved in a Sale Order, and thus should have been brought during the bankruptcy proceeding.

In re: HNRC Dissolution Co., 07-5894 [Aug. 13, 2008]

In a bankruptcy case involving an administrative expense claim filed by an insurer which provided insurance coverage to debtors during the pendency of their Chapter 11 bankruptcy proceedings, denial of the claim based on a holding that it does not constitute an “actual, necessary cost[] and expense[] of preserving the estate” as required by 11 U.S.C. section 503(b)(1)(A) is affirmed for the reasons stated by the district court judge.

7th cir

In re Comdisco, Inc., 07-1474//07-1484 [Aug. 13, 2008]

In a bankruptcy case, appeal of denial of claimants’ motion to terminate a trust created as part of the reorganization plan is dismissed for lack of jurisdiction where the denial of termination was not a separable dispute subject to appeal as a final order.

ND IL ED

In re Phillips & Walker, 06-04158//06-10762 [Aug. 11, 2008]

Judge: John H. Squires

view and download opinion in PDF format here

8th cir

In re: W. Iowa Limestone, Inc., 07-1968 [Aug. 13, 2008]

In a case involving a dispute between a secured lender, who held a security interest in its debtor’s inventory, and subsequent purchasers of that inventory, who left their purchased goods on the debtor’s premises, over whose interest took priority when the debtor filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code, a ruling finding that the buyers did not have constructive possession of the goods under Iowa law is reversed where the buyers satisfied the requirements of being buyers in the ordinary course of business under state law, and thus giving them priority.

Tri-State v. First Dakota Nat’l, 07-2438// 07-2480 [Aug. 14, 2008]

In a case arising out of the bankruptcy case of a former owner of an ethanol plant in South Dakota, which appellee purchased from the bankruptcy estate, bankruptcy court’s grant of bank’s motion for a prepayment penalty is reversed where: 1) bank failed to establish that South Dakota courts would decline to construe an ambiguity in a First Note against it; and 2) doing so, the note does not provide for the imposition of a prepayment penalty under any set of facts.

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