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1st Circuit

Fields Station LLC v. Capitol Food Corp., No. 06-2327

Denial of motion to dismiss Chapter 11 petition is affirmed; Appellant made no prima facie showing that Appellee submitted its petition in bad faith. Read more…

2nd Circuit

In Re: Methyl Tertiary Butyl Ether Prod. Liab. Litig., No. 04-5974,04-6056

Denial of motion to remand is vacated; district court lacked removal jurisdiction under federal officer removal or bankruptcy removal statutes, and no alternative ground for jurisdiction was satisfied. Read more…

3rd Circuit

In re: Hechinger Inv. Co. of Delaware, Inc., No. 06-2166 and 06-2229

Debtor sought to recover sums paid to a creditor before filing as preferential transfers; bankruptcy court agreed, rejected defendant’s position that payments had been simultaneous transfers for value rather then preferential transfers, and denied prejudgment interest. All findings reversed by the Appellate Court. Read more…

5th Circuit

State of Texas v. Soileau, No. 05-20501

State of Texas determined to be subject to a Chapter 7 discharge of its debt against a bail bondsman. The State had moved the bankruptcy court to dismiss it out based on sovereign immunity — an argument that worked at the bankruptcy court level but was reversed by the Appellate Court based on Supreme Court precedent. Read more…

6th Circuit

In re: DSC, Ltd., No. 06-1813

Dismissal of involuntary bankruptcy petition due to lack of sufficient qualified creditors as prescribed under §303(b) is affirmed where debtor’s settlement did not moot the appeal; bankruptcy court properly established and enforced a joinder deadline; and bankruptcy court properly found that plaintiffs were not qualified petitioning creditors under §303(b)(1). While §303(c) allows joinder “before a case is dismissed or relief is ordered,” the statute does not prohibit a court from setting an earlier deadline based on its inherent case management authority. Read more…

Preferred Capital, Inc. v. Sarasota Kennel Club, Inc., No. 06-3063

State law, as opposed to federal law, controls the interpretation of a forum selection clause when the clause is raised as the sole basis for personal jurisdiction over the defendant. In an action brought to enforce a rental agreement between plaintiff’s assignor and defendants, dismissal of the claim for lack of jurisdiction is affirmed on the grounds that a forum selection clause in the contract violates the public policy of Ohio and is unenforceable. Read more…

In re: Glance, No. 06-1630

A security interest in a debtor’s property is a “noncontingent, liquidated, secured debt[]” under § 109(e) of the Bankruptcy Code. Read more…

In re: Barrett, No. 06-3519

An order discharging Chapter 7 bankruptcy debtor’s student loan debts on the basis of “undue hardship” pursuant to 11 U.S.C. § 523(a) is affirmed where: 1) the debtor was not required to provide expert medical evidence to establish that the circumstances underlying his inability to repay would likely continue for a substantial portion of the repayment period; and 2) in light of the significant tax consequences of enrolling in an Income Contingent Repayment Plan (ICRP) due to his inability to repay, debtor’s decision to forgo the ICRP was reasonable and was not grounds for finding bad faith. Read more…

8th Circuit

Liberty Mut. Fire Ins. Co. v. Scott, No. 06-1626

In an insurer’s declaratory judgment action against defendant seeking a declaration that its property insurance policy afforded no coverage for fire damage to her house and personal property, judgment as a matter of law for insurer is affirmed as: 1) no rational jury would be able to reconcile the difference between insured’s stated personal property in a bankruptcy and in an insurance claim less than one year later; and 2) the only reasonable inference on the evidentiary record was that insured made a material misrepresentation in submitting her claim, thus voiding her coverage. Read more…

Brown v. Pyatt, No. 06-3404

In a Chapter 7 bankruptcy case in which the bankruptcy petition did not list several checks which had been written prior to the debtor’s filing but not yet honored, a decision reversing an order for debtor to return to the estate money in the bank account that had not processed as of the date of bankruptcy filing is affirmed, as funds transferred by the checks were property of the estate, the debtor did not have control of money after the checks were honored, and consequently he could not be subject to a motion to compel turnover. Read more…

US v. Holthaus, No. 06-2843

A sentence and restitution order imposed for defendant’s knowingly and fraudulently making a false declaration or statement in connection with his bankruptcy petition is affirmed over claims of error regarding: 1) a finding that defendant intended to defraud his creditors of more than $30,000, which resulted in a six-level increase under the USSG; and 2) a conclusion that the bankruptcy trustee was a victim under the Mandatory Victims Restitution Act, and the district court’s order of restitution for the trustee’s uncompensated work as a result of defendant’s offense. Read more…

Lewallen v. Green Tree Servicing, L.L.C., No. 06-1925

In a Chapter 13 bankruptcy action brought to avoid foreclosure on debtor’s home, a denial of creditor’s motion to dismiss or, alternatively, compel arbitration is affirmed where: 1) the creditor waived its right to arbitrate by waiting eleven months to assert the right and acted inconsistently with its right to arbitrate by engaging in judicial proceedings and serving discovery requests; and 2) the debtor was prejudiced by the late assertion of the right. Read more…

9th Circuit

In re: Adbox, Inc., No. 05-55158

In a dispute between the primary financial backers of a start-up company in bankruptcy, involving backers’ counterclaim against the company’s bankruptcy trustee and the trustee’s preference action to recover a payment made by the company to backers, dismissal of the counterclaim and summary judgment for the trustee in the preference action are affirmed as: 1) the trustee was not an “opposing party” within the meaning of Federal Rule of Civil Procedure 13 and the counterclaim was properly dismissed; and 2) summary judgment in the preference action was proper as plaintiffs failed to meet their burden of proof on their earmarking defense. Read more…

10th Circuit

Rupp v. United Sec. Bank, No. 06-4014

In the context of a trustee’s power to avoid preferential transfers under §547(b), a company was held not to be an insider as defined in §101(31)(A) vis-/*-vis its director emeritus, now a chapter 7 debtor. Read more…

:: Bankruptcy Attorney in Illinois :: M. Hedayat & Associates, P.C. ::

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