In a decision approved for publication, addressing the intersection of New Jersey Court Rule 4:5-4 and 11 U.S.C. 524(a), the New Jersey Appellate Division recently held that a bankruptcy discharge precluded a creditor from obtaining a judgment of personal liability and debtor’s failure to plead that defense did not waive it. Vadim Chepovetsky and Svetlana Nashtatik v. Louis Civello, Jr. , No. A-0476-21 (App. Div. Jun. 16, 2022).

The United States District Court for the Western District of New York recently upheld the findings of a Bankruptcy Court, which held that the in rem tax foreclosure of the subject property was a fraudulent conveyance. SeeDuvall v. Cty. of Ont., 2021 U.S. Dist. LEXIS 216970 (W.D.N.Y. 2021). The matter arose from the tax foreclosure of property (the “Property”) for the non-payment of taxes arising in 2015. In October 2016, the County issued a foreclosure petition and notices, advising that interested parties had the right to redeem the Property on or before January 13, 2017.

In a split decision, the United States Court of Appeals for the Ninth Circuit recently determined that the Bank of New York Mellon (the “Bank”), as first deed of trust lienholder, could challenge a homeowner’s association’s (“HOA”) sale of a property as a violation of an automatic bankruptcy stay, giving the Bank superior title. SeeBank of New York Mellon as Tr. for Certificateholders of CWALT, Inc., Alternative Loan Tr. 2005-54CB, Mortg. Pass-Through Certificates Series 2005-54CB v. Enchantment at Sunset Bay Condo. Ass’n, 2 F.4th 1229 (9th Cir. 2021).

The Eleventh Circuit recently affirmed a Bankruptcy Court and held that dismissal of an underlying bankruptcy case did not divest the Bankruptcy Court of jurisdiction in related quiet title action. In re Lindsey, 2021 WL 1140661 (11th Cir. 2021). In 2015, the plaintiff filed a voluntary petition for Chapter 13 bankruptcy relief. In his schedule of assets, the plaintiff listed a fee simple interest in a commercial multi-tenant building and an adjacent vacant lot.

The Fifth Circuit recently affirmed a Bankruptcy Court’s order, finding that a bank's properly perfected security interest in a debtor’s assets had priority over oil producers’ unfiled, unperfected security interests in oil proceeds, but did not have priority over a statutory lien granted to certain producers under the Oklahoma Lien Act. SeeMatter of First River Energy, L.L.C., 986 F.3d 914 (5th Cir. 2021). In the case, First River Energy, LLC (the “Debtor”), a Delaware limited liability company headquartered in Texas, filed a petition for Chapter 11 bankruptcy.

This week’s TGIF takes a look at the recent case of Mills Oakley (a partnership) v Asset HQ Australia Pty Ltd [2019] VSC 98, where the Supreme Court of Victoria found the statutory presumption of insolvency did not arise as there had not been effective service of a statutory demand due to a typographical error in the postal address.

What happened?

This week’s TGIF examines a decision of the Victorian Supreme Court which found that several proofs had been wrongly admitted or rejected, and had correct decisions been made, the company would not have been put into liquidation.

BACKGROUND

This week’s TGIF considers Re Broens Pty Limited (in liq) [2018] NSWSC 1747, in which a liquidator was held to be justified in making distributions to creditors in spite of several claims by employees for long service leave entitlements.

What happened?

On 19 December 2016, voluntary administrators were appointed to Broens Pty Limited (the Company). The Company supplied machinery & services to manufacturers in aerospace, rail, defence and mining industries.

This week’s TGIF considers the recent case of Vanguard v Modena [2018] FCA 1461, where the Court ordered a non-party director to pay indemnity costs due to his conduct in opposing winding-up proceedings against his company.

Background

Vanguard served a statutory demand on Modena on 27 September 2017 seeking payment of outstanding “commitment fees” totalling $138,000 which Modena was obliged, but had failed, to repay.

The recent decision of the Court of Appeal of Western Australia, Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in Liquidation) (Receivers and Managers Appointed) [2018] WASCA 163 provides much needed clarity around the law of set-off. The decision will no doubt help creditors sleep well at night, knowing that when contracting with counterparties that later become insolvent they will not lose their set-off rights for a lack of mutuality where the counterparty has granted security over its assets.