In a very recent decision by the Court of Appeals for the Eleventh Circuit,In re J.H. Investment Services, Inc., the court held that a creditor must take an affirmative step to pursue an unsecured claim, and that section 506(a)(1) of the Bankruptcy Code does not automatically provide for a deficiency claim.  

In re The Colonial BancGroup, Inc., 2011 WL 2792477 (Bankr. M.D. Ala. July 15, 2011)

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In re Lehman Brothers Inc., Bankr. Case No. 08-01420 (JMP) (SIPA), 2011 WL 4553015 (Bankr. S.D.N.Y. Oct. 4, 2011)  

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Grossman v. Lothian Oil Incorporated, 650 F.3d 539 (5th Cir., 2011)  

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In a case of first impression in the Fifth Circuit, the court recharacterized a claim of a non-insider, declining to create a per se rule that recharacterization could only apply to insiders.

FACTUAL BACKGROUND

Effective December 1, 2011, a number of the Federal Rules of Bankruptcy Procedure were amended. Two of the amendments specifically address the information required on Proof of Claim forms.

The amendment to Rule 3001 (Proof of Claim) is expanded to require that additional supporting information be filed with proofs of claim in individual debtor cases. The amendment authorizes a court to impose sanctions against a creditor that fails to provide the required information.  

Northern Capital, Inc. v. The Stockton National Bank, et al. (In re Brooke Corporation), 2011 WL 4543484 (Bankr. D. Kan. Sept. 28, 2011)

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The U.S. Supreme Court has agreed to settle the dispute as to whether secured creditors can credit bid in connection with asset sales done pursuant to liquidating plans. The Third Circuit in the Philadelphia Newspapers case and the Fifth Circuit in the Pacific Lumber case held that secured creditors do not have a statutory right to credit bid their debt at a sale conducted under a plan of reorganization pursuant to which the debtor elects to provide the secured creditors with the “indubitable equivalent” of their secured claim.

Lehman Brothers Holdings, Inc. v. Bethany Holdings Group, LLC, et al., 2011 WL 3427013, (S.D.N.Y. Aug. 5, 2011)

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Sandburg Financial Corp. v. American Rice, Inc. (In the Matter of American Rice, Inc.), No. 11-40301 (5th Cir., Sept. 22, 2011)

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Official Committee of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), No. 10-4456 (3d Cir., Sept. 21, 2011)

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